By Mike Colias and Mike Spector
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 10, 2018).
It took six years for Ford Motor Co. to sell 8,700 electric
Focus small cars. It takes just three days to sell as many
gasoline-powered F-Series pickup trucks.
Americans may not be lining up to buy electric cars, but that
hasn't stopped Ford from pushing ahead with plans to spend $11
billion to develop more compelling battery-powered vehicles. Ford's
rising commitment underscores a willingness among big car companies
to experiment with the types of sexy electric cars that give Tesla
Inc. its appeal.
Ford's push, announced at the Detroit auto show in January, is
part of more than $70 billion in planned investments into electric
vehicles and batteries that global car companies have announced
since the beginning of 2017. This year, Jaguar is expected to offer
an electric SUV via U.S. dealerships, to be followed by new
battery-powered offerings from brands as diverse as Audi, Porsche,
Volvo and Toyota.
American buyers have shown little interest; the vast majority of
vehicles leaving U.S. showrooms have gasoline engines under the
hood. While deliveries of pure electric and plug-in hybrid vehicles
are on pace to top 200,000 for the first time, that represents
slightly more than 1% of the market even with a $7,500 federal tax
credit.
One reason for the slow adoption is that auto makers have long
made electric cars with staid designs unappealing to consumers.
They did so believing the vehicles were in low demand, developing a
collection of automobiles detractors often labeled "compliance
cars" meant to assuage regulators rather than sell in large
numbers.
"We will be converting our traditional, most iconic vehicles to
all-electric," said Jim Farley, Ford's global markets chief, in an
interview, adding he even sees a potential market for pickup trucks
like the F-150 fully powered by batteries. The choices at
dealerships for electric vehicles, now paltry, are "going to
explode," he said.
Among Ford's planned vehicles is a high-performance electric SUV
coming to showrooms in 2020 called the Mach 1, a name the company
once used on its powerful Mustang sports cars.
The new strategy comes as battery costs are falling, promising
to cut prices of electric vehicles, which are typically thousands
of dollars more expensive than comparable gas-powered models.
Stricter environmental regulations in markets such as California
and China are mandating electric vehicles. An emissions-cheating
crisis at Germany's Volkswagen AG has soured many customers on
diesel. The U.K., France and India have all weighed banning
internal-combustion engines for environmental reasons.
Volkswagen, which pleaded guilty to criminal wrongdoing in the
U.S. for evading emissions requirements, has committed $40 billion
to electric vehicles through 2022. The German auto giant's plans
include a battery-powered version of its iconic microbus called the
Buzz.
Mercedes-Benz parent Daimler AG plans to invest as much as
roughly $12 billion in electrified vehicles. GM plans 20 new
battery and fuel-cell electric vehicles by 2023, though the Detroit
auto giant hasn't revealed an investment figure.
"The die has been cast," said Mike Jackson, chief executive of
AutoNation Inc., the largest dealership chain in the U.S. He
predicts electric vehicles will represent up to 20% of U.S.
automobile sales by 2030, up from around 1% today.
"This has never happened before: The three biggest markets in
the world are mandating electric vehicles," he said, referring to
China, Europe and the U.S., where California and other states
require increased electric sales.
Industrywide electrification isn't assured. While the distance
electric cars can travel on a single battery charge is increasing,
there is a lack of widespread charging stations needed to ease a
driver's fear of becoming stranded. For now, many EVs remain too
expensive for most buyers -- Jaguar's new I-Pace SUV will start
around $70,000.
In the U.S., tax credits that eventually expire have propped up
electric-car sales, and car companies became nervous when lawmakers
weighed eliminating them in the recent GOP tax-reform legislation.
GM has called for an expansion of those credits.
"If it does not gain acceptance in the market, then everybody --
industry, employees and politicians -- have a big problem," Peugeot
Chief Executive Carlos Tavares recently told reporters.
It could take several years for the prices of electric cars to
approach those of current gas-powered vehicles. Mass-market brands
lose money on their current electric offerings. Fiat Chrysler Chief
Executive Sergio Marchionne once quipped that he hoped customers
would eschew a Fiat 500 electric car because "every time I sell one
it costs me $14,000."
The new wave of vehicles should represent a departure from cars
such as Ford's electric Focus of 2011, capable of traveling only 76
miles on a single charge, and even less when owners used their
heaters in the winter. Its $40,000 price tag was nearly twice its
gasoline-powered counterpart.
GM contends the Chevrolet Bolt released in late 2016 "cracked
the code" for adoption of electric cars, boasting a range of 240
miles on a charge and a price around $37,000 before rebates. Still,
the hatchback remains too small for most customers, so GM plans
larger vehicles with similar electric underpinnings.
Jim Sepe, of Glendale, Calif., was driving a Ford SUV before
leasing a Bolt, which he described as "snappy and nimble." Mr.
Sepe, a 57-year-old chief technology officer at a consumer
electronics company, said operating the car "feels like I am
driving the future."
--William Boston contributed to this article.
Write to Mike Colias at Mike.Colias@wsj.com and Mike Spector at
mike.spector@wsj.com
(END) Dow Jones Newswires
March 10, 2018 02:47 ET (07:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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