Electric Vehicle Racing Heats Up As Detroit Takes Its Step
The electric car race is intensifying, both Ford F -0.08%
Motor Co. and General Motors Co.
highlighting new electric pickups and automakers are preparing to launch a flurry of new battery-powered models this year and next.
Auto managers have spent the past several years discussing their ambitions and allocating billions of dollars in new investments to add more electrics to their global product lines. So far, however, the transition has mostly been behind the scenes, with engineers and designers preparing the next generation of vehicles.
In the coming year, car buyers will find that these efforts are more evident at dealership points of sale. According to analysts at Bank of America, automakers plan to bring dozens of new electric models in different styles and at different prices to market over the next two years.
The introduction of these electric vehicles is shifting the pressure on automakers from developing to convincing consumers to buy them.
“A new world is coming,” said Carlos Tavares, CEO of global automaker Stellantis STLA -2.06%
NV at the electronics fair CES on Wednesday. “Now the machine is on and we are fast forwarding.”
On Tuesday, Ford announced it would almost double production for its upcoming electric truck, the F-150 Lightning, after receiving an unexpectedly high number of reservations. The truck will be launched in the spring in limited numbers.
The move rocketed Ford shares, rising their market value to $ 97.6 billion at Friday’s close, past GMs and via Rivian Automotive Inc., a hot, fledgling startup that recently launched an all-electric truck launched and went public in November.
GM unveiled its rival electric truck on Wednesday, a battery-powered version of its popular Chevy Silverado, and Chief Executive Mary Barra listed about 10 electric vehicles that will hit the market within two years, compared to just two today.
Stellantis, which owns Jeep, Ram, and other auto brands, announced last week that the nearly 100-year-old Chrysler brand would be entirely electric by 2028. The auto company also announced that it had a deal to sell electric vans to Amazon Inc.,
This makes it a competitor to Rivian, which also has an agreement to sell delivery vans to the e-dealer.
Rivian’s stock fell 11% on the news Wednesday, then briefly fell below its IPO price of $ 78 per share for the first time since going public. It closed at $ 86.28 per share on Friday.
A Rivian spokeswoman said the Stellantis deal was good news for the entire industry and that Rivian’s own Amazon partnership was intact, thriving and growing.
The move to electrical engineering is intensifying the battle between traditional automakers and newer players entering the more than a hundred-year-old auto business.
Old car companies like GM, Volkswagen AG
and Toyota Motor Corp.
have deeper pockets, well-established supply chains and the automotive manufacturing expertise to help redesign their product lines.
Until recently, however, investors have mainly relied on Tesla and other startups that focus solely on making electric vehicles. These companies have raised billions of dollars in funding over the past few years and don’t have the capital pressures to transform a business that is primarily gasoline-based. Tesla, worth more than $ 1 trillion at the close of trading on Friday, is now the world’s most valuable automaker.
Despite all the excitement, car companies – both new and old – still have a long way to go in convincing consumers to give up gasoline.
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Electric vehicle sales are on the rise, rising 88% year-on-year in 2021, but still only account for about 3.2% of the total US auto market, according to research company Motor Intelligence.
Tesla holds a solid lead over competing auto companies. Worldwide deliveries rose by 87% to around 986,000 last year.
In the United States alone, Tesla will sell around 352,500 vehicles or around 72% of all battery electric vehicles purchased in 2021, Motor Intelligence estimates. Tesla does not split deliveries by region.
In contrast, Ford sold around 27,000 electric vehicles in 2021 and GM sold around 25,000 last year. For both companies, this represented less than 2% of their total US sales.
For many car buyers, an electric vehicle remains a tough selling point, in part because there aren’t many charging stations and gasoline-powered models are more affordable despite tax breaks aimed at making electric vehicles more attractive to consumers.
“We have a lot of conversations about electric vehicles,” said Ryan Gremore, president of the O’Brien Auto Team in Illinois. “But it didn’t get consumers to come in and say, ‘I have to have one.'”
That sentiment did little to dampen the auto industry’s ambitions, as executives said they need to add more zero-emission vehicles to their showrooms to meet stricter air pollution regulations around the world.
And as more options come, the calculation for buyers changes. A survey conducted in August by consulting firm AlixPartners LLP found that 19% of US respondents say they are more likely to buy an electric vehicle the next time they buy a car, up from 5% in 2019.
“Electric vehicles are currently much less about demand than supply,” said Dan Levy, an analyst at Credit Suisse.
Brad Sowers, a Missouri auto dealer, said the drumbeat of the electric vehicle news is generating more interest among its customers. Mr Sowers said he received 30 orders for the new electric Silverado within an hour of his introduction. The new truck will not go on sale until the beginning of 2023.
Weston Wellington, a finance manager with a horse ranch and farm, said he was ready to go electric for his next truck and said the performance was superior to internal combustion engine pickups. He said he leaned towards Rivian’s new R1T electric truck, but the new battery-electric Silverado intrigued him.
“I’m not sure which one,” said Mr. Wellington. “I just expect there will be plenty of choice.”
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Write to Ben Foldy at [email protected]
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