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Electric vehicles have been around for some time, but global automakers have been reluctant to migrate because doing so represents the biggest technological revolution since the Ford Model T.

This revolution entails scrapping a century of incremental investments in the internal combustion engine and replacing it with a 100 per cent different set of propulsion technologies, along with all the requirements to design their vehicles differently. This means it would take many years for automakers to recover their investments in electric vehicles (EVs), all while there are big profits to be made on conventional pick-ups and SUVs.

While North America’s automakers have been sluggish to respond, manufacturers elsewhere are prepared to comply with Chinese and European Union requirements for a migration to zero- and low-emission vehicles.

Big 3 need to partner up

For the Big 3 North American manufacturers (Ford, GM and Fiat Chrysler) to make up for lost time and compete with foreign counterparts on electric vehicles, partnerships with Chinese and European automakers, turning to Big 3 Chinese divisions and/or an alliance in a start-up appear to be viable options. Fiat Chrysler has taken this route in a 50/50 deal with Groupe PSA, the makers of Peugeot, Citroen, Opel and Alfa Romeo, to, among other things, develop electric vehicles. And Volkswagen will share its electric vehicle platform, MEB, under a co-operative agreement with Ford. Ford and GM are both seeking input from their Chinese subsidiaries and partners.

This industry-wide makeover is timely in terms of the climate emergency. According to a 2019 International Energy Agency analysis, between 2010 and 2018, SUVs became the second largest contributor to an increase in global emissions and associated with 3.3 million barrels per day of additional petroleum demand from passenger vehicles.

China a spellbinding EV force

China, as the largest vehicle market in the world, has single-handedly changed the global paradigm. Forcing automakers to put aside the amortization procrastination reflexes, China has an incrementally rising quota system for zero- and low-emission vehicles that took effect in 2019. This year, electric vehicles were expected to reach 8 per cent of new vehicle sales or two million vehicles, but this may be an overestimate due to a June 2019 decline in China’s EV rebates. This blip aside, EVs may rise to half of new vehicle sales in China by 2025.

The range of EV offerings on the Chinese market now and to be introduced in the next few years by Chinese brands is spellbinding. Global automakers have many models in the works destined for the Chinese market as well. Many of these Chinese models or their technologies will find their way to the North American market.

And the European Union, beginning in 2020, will charge automakers penalties per vehicle sold when not in compliance with new corporate average emission standards. Non-compliance could run into billions of dollars. In December 2018, the European Parliament upped the pressure on vehicle manufacturers for a migration to zero- and low-emission vehicles approving a 37.5 per cent reduction in vehicle emissions by 2030, compared to 2021. European automakers claimed this would force them to focus on electric vehicles.

Volkswagen and Tesla competing for top spot

Volkswagen, with 40 per cent of its sales in China and just under half in Europe, has decided to be the world’s No. 1 EV manufacturer. The most recent goal announced is to sell 15 million EVs by 2025, producing at least three million vehicles per year by then, or 25 per cent of global sales. By 2028, Volkswagen intends to offer 70 all-electric models.

Add to this the Tesla phenomenon. While Volkswagen has the advantage in scaling up, Tesla remains No. 1 in electric vehicles with a 2019 estimate for global production at 360,000 units, boasting 75 per cent of EV sales in the United States. Time will tell whether Tesla fulfils the estimated global demand of 700,000 to 800,000 Model 3s per year. The upcoming sub-compact Model Y may rival the Model 3 in sales.

In China, Tesla’s new Shanghai facilities were completed ahead of schedule in October 2019, will start production late in 2019 and, five years from now, hope to achieve a production rate of 500,000 vehicles per year.

Already in the plans for Europe is the next Tesla Gigafactory in Brandenburg, near Berlin, likely to begin production of the Model 3 and Model Y SUV/crossover in 2021. When full production is reached in a three-phase process, the German facility will turn out 750,000 vehicles per year.

The Tesla CyberTruck pickup concept presented in November (and mentioned in a National Observer article in December) will rattle a few cages too. Though a fully refundable $100 US pre-order deposit does not translate into credible sales projections, the 250,000+ pre-orders do indicate substantial interest. The most current information is that the dual-motor and tri-motor variants will be put on the market in 2021 and the single-motor version will follow in 2022.

Yet Tesla’s success and automakers overseas putting the pedal to the metal to comply with Chinese and European legislation seem to have caught the U.S.-based Big 3 off-guard. Once again they seem have been sleeping at the wheel.

Ford playing catch-up

Back in February 2017, then-CEO of Ford Mark Fields argued that the pre-Trump, increasingly stringent U.S. fuel-economy standards would cost the industry a million jobs. Months later in December, to address the China challenge, new CEO Jim Hackett shifted attention away from the North American market to indicate that Ford’s China division, along with its Chinese partner Zotye, would have the global lead for Ford “electrified” vehicles.

Perceptions have changed. Why else would Ford invest $500 million in the U.S.-based start-up Rivian, which will put the all-electric R1S pick-up and R1T seven-passenger SUV on the market within the next two years? This is clearly an expedient way for Ford to catch up and become instantly competitive.

To date, Ford’s intentions — which seem to change with every update — are to share Rivian EV components for an SUV with a distinct Ford body on top, under the Lincoln brand, fabricated by Rivian in Illinois for market introduction in 2022. Other Ford “electrified” models to come will likely be built on the Rivian chassis. An electric F-150 pick-up, possibly sharing Rivian technology, appears to be in the works for 2021. Rivian plans on having six EV models of its own by 2025, in addition to models for other automakers.

Ford’s investment, part of a $2.8-billion investment in Rivian, is in addition to a $700-million funding round led by Amazon, and support from T. Rowe Price, BlackRock, Cox Automotive, Japan’s Sumitomo Corp. and Saudi auto distributor Abdul Latif Jameel Ltd. Amazon has pre-ordered 100,000 Rivian trucks for between 2021 and 2030.

Ford’s first full venture into electric personal vehicle segment is the 2021 all-electric crossover Mustang Mach E, which is meant to compete with the Tesla Model 3. This may represent a risk for Ford by distracting interest in its other models — scary for a company with $100 billion in debt — with the rest of the lineup dedicated to internal-combustion-engine vehicles. Technology transitions can happen much quicker than companies can expect, sometimes with the new players displacing the traditional ones, as was the case with digital cameras and Kodak.

The aforementioned Ford co-operative agreement with Volkswagen for the VW electric platform should help accelerate the migration to EVs. Volkswagen is leveraging its investment in its electric MEB chassis by licensing its design to other manufacturers and hopes to make $10 billion from the agreement with Ford.

Interestingly, Ford boasts of an $11-billion push for “electrified” vehicles (including hybrids). The $10 billion for the arrangement with Volkswagen and $500-million investment with Rivian comes close to that amount.

GM double-speak

GM, meanwhile, is still in the stage of double-speak. The manufacturer rationalized the closing of its Oshawa, Ont., plant, as a necessary step in preparing for the advent of electric vehicles. Yet GM president Mark Reuss has indicated that the ducks are not yet lined up for EVs.

According to his analysis, to pave the way for the financing of the EV rollout, GM will have to rely on the profits of selling more and larger SUVs (profits for SUVs reach up to 30 per cent or $15,000 US each). For Reuss, charging-station infrastructure would have to be significantly increased and purchase-price parity would have to be achieved before the demand becomes a game changer.

All this raises the questions why GM is not taking Volkswagen and Tesla more seriously and is not working on charging infrastructure.

GM’s only current battery EV on the North American market is the Bolt. Mary Barra, GM’s CEO, said the company will offer a North American electric pick-up in 2021. This GM pick-up — and other GM electric vehicles to come to North America — will make use of the “building blocks” of GM’s Chinese electric vehicles.

Fiat Chrysler's big deal

As for Fiat Chrysler, they don’t really have an EV game plan, having invested little effort in the domain. The pending $50-billion US deal to merge Fiat Chrysler with Groupe PSA will render the new company the third largest automaker in the world. This will help establish the economies of scale for heavy investments in developing electric vehicles, putting both companies in a better position to level the playing field with competitors.

Complacency no longer an option

The longstanding complacency of the Big 3 on the migration to electric vehicles is no longer viable in the context of Chinese and European Union legislation, the impacts of these legislative initiatives on the competition and Tesla’s success. Agreements with foreign manufacturers and turning to Chinese divisions have become the favoured antidotes for the laggards. Another expedient path is to partner with a start-up.

I'm surprised this article makes such minimal passing reference to the importance of fast-charging infrastructure networks. Not only is Tesla the only company truly interested in selling people an EV right now, they are the only company which has heavily invested in providing a fast-charging network throughout now North America, Europe and Asia. This is still growing and must pick up quickly because of the pace of Model 3 sales, but all of the other companies are doing nothing, or next to it, to help people address range anxiety, and to buy an EV that will suit all their needs, and replace their perceived need for a back-up internal combustion vehicle. No matter what cars, trucks or SUVs the other automakers come out with, if there isn't a well-distributed fast-charging network for me to use when on the road between cities, I'm not buying it.

Maybe this will change when a next-generation battery type provides vastly longer range than the current 400-500 km range, but in a country like Canada, assured ability to travel without being stranded, perhaps waiting for someone else to finish charging at the sole publicly-supplied charger in town, is critical. A lack of supercharging might be okay in a small densely populated country, or one with great train travel alternatives. In Canada, Tesla remains the only game in town, as far as I'm concerned.

Last week Tesla has massively extended its lead in Canada by turning on a series of 27 V3 Supercharger (250 kW) locations across Canada (from Southern Ontario to Calgary) thus completing Canada’s coast to coast Trans Canada Supercharger network. These locations have added more than 160 Supercharger locations which can add range at a peak rate of up to 1,600 km of range / hr and has made cross Canada travel by Tesla as easy as in a gas car.

After years of in-house prototypes, GM hired Aerovironment to build an EV, and then fought them all the way. When the EV-1 run of 50 cars turned out popular despite an already-obsolete battery, it was recalled and crushed. There are just too many unimaginative engineers at the big three for them to tackle a new project.
The electric cars we are offered are, once again, a trickle-down from what the rich can afford, rather than being designed for efficiency and real needs. There is no excuse for a land vehicle to weigh more than its payload. We are just used to 1/10 of that standard because we have been willing to buy gasoline to boost our status, and the corporations have milked that for all it is worth. We need more imagination before we go shopping, too.

Following the Trudeau governments announcement last spring of a $5000 rebate on the purchase of an electric vehicle, we test drove Hyundi's all electric Kona and were sold.......it took over 6 months to arrive, a wait that got us thinking about dumb investments like bitumen pipelines as opposed to smart new technologies like an Oshawa electric factory staffed by expert Canadian workers......but this Nov the wait was over.

We love it, and can't imagine why anyone with disposable income would fly their ass to the tropics, when they could use the money to put some solar on their roof, a charger in their driveway or garage, and a vehicle that will cost them 0 to drive for the next 10 plus years, in the carpark. Short term thinking should perhaps not be called thinking at all......the future, if we have one, has to include electric. And with a little investment, the sun can fuel much of it.

Back in the day, little "wife" cars began appearing in North America. Mid-60s, as I recall. The first Toyota in our neighbourhood was a real attention-getter. Now, mind you, they were just for "the wife" to go pick up groceries, or laundry, or whatever the family needed. The "real" car was still the behemoth that dad drove.

Fast forward. Gas prices go through the roof, environmental costs as well as bang-for-the-buck increase, and those little cars take over more and more and more of the market.

Do the Big Three look around to see what's happening, and adjust their product, marketing, etc.? Yeah--no.
So do North American governments at various levels bail them out, repeatedly, with more and more expensive "loans", attached to promises of job security for the line workers (which promises are almost never fulfilled)? "North American governments" by the way, is an indication of who made the decisions, but the actual costs, and money lost, landed on taxpayers, who had no voice in this idiocy.

Is this starting to look familiar?
Are we going to do this again?
Are we going to let this happen again?
Are we going to see corporations sink parts of our economy, again, and walk away (the top dogs) with nice fat pensions and perks and packages?

Any bets?

The US Big 3 are hardly idle. They are doing everything in their power to slow down the change to using renewable energy to power their vehicles. Every car sold today has a 20 year lifespan, during which time they can continue with their present business model. Each passing year pushes that lifespan one more year into the future. Servicing fossil fuel powered vehicles represents 50% of their income over the life of a vehicle; servicing electrically powered vehicles will be a fraction of that. Thus, they resist as much as possible, whilst appearing to be interested.