True North: Why Automakers are Still Betting on Electrification – The Big Picture

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A tale of two worlds: As President Trump attempts to kick-start America’s coal mining industry, rolling back regulations and gutting environmental protections, Britain revealed its carbon emissions were the lowest since Grover Cleveland was in the White House—since 1894, to be precise—thanks to policies explicitly designed to discourage coal use.

Another tale of two worlds: While automakers petition the Trump administration in Washington to rescind fuel economy standards that would require their U.S. vehicle fleets to average 54.5 mpg by 2025, at the annual Geneva show they proudly touted fuel-efficient hybrids, cars that run on near CO2-neutral synthetic methane gas, and electric vehicles.

The line between hypocrisy and hard-nosed business savvy is often thinner than a politician’s promise. Automakers don’t make policy, however. Politicians do. And automakers are navigating political worldviews heading in fundamentally different directions.

Capitalizing on the Trump administration’s anathema toward environmental regulation is opportunistic and likely driven by a desire to save spending R & D dollars on ultra-fuel-efficient vehicles Americans now say they don’t need or want. (You can partially thank cheap gas prices for the current consumer psychographics.) But although the U.S. remains an important and lucrative market, it’s no longer the true north for the world’s automakers. That much was clear at the 2017 Geneva show.


In 2011 Rolls-Royce unveiled the 102EX concept at Geneva, a giant Phantom sedan with two electric motors developing a total of 390 hp and 589 lb-ft of torque. A year later, the project was dead. Extremely wealthy Rolls-Royce customers simply weren’t interested in a car with a 100-mile range and an eight-hour charge time. Six years later, Bentley’s EXP 12 Speed 6e Geneva concept put the ultra-luxury electric car back on the agenda. What’s changed? Battery performance, for a start: If a production version of the EXP 12 Speed 6e were built, it would have a range of at least 300 miles, says Bentley’s engineering chief Rolf Frech.

But technological advances are merely part of a bigger story: “I think the environmental situation has changed a lot,” Frech says, noting large, compressed cities are contemplating curbs on vehicles with internal combustion engines in order to improve local air quality. The mayors of Paris, Mexico City, Athens, and Madrid have already announced a ban on diesel vehicles from 2025. Persistent, choking smog in Beijing and New Delhi has also prompted restrictions on vehicle use in those cities.

Even though many electric cars are automotive muesli—vehicles designed to look like they’re saving the planet—the glittering, extravagantly proportioned EXP 12 Speed 6e, which previews design elements of the next-generation Bentley Continental GT, is hedonism on wheels. Underneath the glamour, though, is a pragmatic response to a coming trend. “We want to make it possible for our customers to go wherever they want,” Frech says. And that includes cities. “What is important is that even if they are only driving 10 miles or at 10 mph, customers should feel they are driving a Bentley.”

In America, in the context of cheap fracked gas and Trump’s environmental policies, the Bentley EXP 12 Speed 6e would seem doomed to the same fate as the Rolls-Royce 102EX. But that’s not necessarily how the rest of the world will see it.

More than a half-million electric vehicles were sold in China last year, a 50 percent increase on 2015 sales that effectively doubled the number of EVs on the world’s roads. The Chinese predict a total of 5 million EVs will be in service by 2020, which explains why they are also spending billions on lithium-ion battery raw materials and manufacturing plants. In three years China will be producing almost three times the lithium-ion battery capacity as the U.S., and that’s assuming Tesla’s Gigafactory in Nevada meets its ambitious targets.

America once set the agenda for the global automotive industry, but by 2020 emerging markets such as China and India are expected to account for two-thirds of the auto industry’s global profits. And if those markets demand luxury electric vehicles, they’ll get them. The development of those EVs, ironically, might well be paid for with the money automakers saved by not having to meet tougher 2025 American fuel economy targets.

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