Everything we hear from Ford, GM, and Fiat Chrysler, has to do with EVs. But now it seems like the Detroit 3 were just kidding. Or something. Product plans reveal that for all of the hand wringing and electrification pronouncements, that through 2026 GM and Ford plan on cranking out big-gun trucks. And EVs? Not so much. Plans rolled out to 2026 show them building more than 5 million SUVs and trucks, but only 320,000 EVs. This according to production plans revealed to Reuters. As a comparison, Tesla made over 350,000 EVs last year.
EV commitment calls for fewer Ford and GM EVs combined in 2026 than Tesla made last year
What this all means is that Ford and GM expect to make fewer EVs combined in 2026 than Tesla made last year. So, that’s what all of this hype about an electric future is about? Put another way, GM and Ford plan on making almost 90% of their vehicles like SUVs, pickup trucks, and crossovers six years from now. The number forecasts show a stunning about-face from what has been projected.
As for Fiat Chrysler, its plans are murky due to the pending merger with PSA Group. Set to be finalized in early 2021, neither company has shown big strides in EV technology. It was expected the merger would kick off a wave of EVs. But if Ford and GM’s numbers are any indication then the merged companies don’t need to look at EV conversion as urgent.
It seems like companies don’t see EV conversion as urgent
This is all predicated on there being cheap gas and continuing good fortunes. With the introduction of the coronavirus and its unknown impacts, things will be very different in 2026. Even with cheap gas big trucks and SUVs may not be selling if the coronavirus has long term consequences on businesses and incomes.
Car company executives are now saying they are completely committed to EVs. The problem is will the market accept them in large numbers. Based on these projections car companies expect that they won’t. In fact, it almost looks like they’re leaving a lot of the EV market to Tesla.
GM EV commitment is mostly for China, not the US
Just a couple of weeks ago GM CEO Mary Barra said GM expects to sell one million EVs by the mid-2020s. She said that GM would have to spend $20 billion in development to get to that amount of production. But it looks like that projection is more from expected customer demand in China not in the US. It also looks like the production of those EVs would likely be in China, too.
Some analysts see the financial strains on companies from the coronavirus crisis making less development money available. Companies will have to pick and choose projects, and with less projected EV demand more traditional SUVs and pickups will be elected for capital investments.
Consumer demand for SUVs and big trucks won’t last forever
There has always been more profit in big trucks and SUVs than in smaller, more fuel-efficient vehicles. So all of the manufacturers love to predict this will drive consumer demand forever. But as we’ve seen with a fuel crisis or recession the good times don’t last.
Easing fuel economy restrictions by the current administration are taking some of the pressure off of the car companies for now. But with a new administration or if the economy fails to bounce back quickly from the current pandemic future projections by Ford, GM, and Fiat Chrysler will need to be completely rethought.