Is the Auto Industry in Denial? Why EVs Were Thin on the Ground in Detroit
Electricity is widely touted as the car fuel of the future, but you wouldn’t know it based on this week’s Detroit Auto Show. As the industry gathered to show off its upcoming launches, the headline acts were gas-guzzling performance cars. Bar concept releases from Cadillac and factory plans from Volkswagen, all-electric vehicles were few and far between.
The event captured, in a nutshell, the double-speak that’s become incredibly common in the auto industry which desperately wants to innovate while still doing the things it does best, explains David Reichmuth, a senior engineer in the Clean Vehicles program with the Union of Concerned Scientists.
“There is a disconnect between what they say the future is and what they’re doing today” Reichmuth tells Inverse. “They’re telling investors, ‘Don’t worry we’re ready for the future!’ But right now, they want to sell as many gasoline SUVs as they can, because that’s what they have at the lot.”
The show was dominated by big-name launches that had little regard for the environment. Ford’s final reveal was the 2020 Mustang Shelby GT500, with a 5.2-liter V8 engine with over 700 horsepower. Toyota unveiled its GR Supra, with 340 brake-horsepower and a jump from 0 to 62 mph in 4.3 seconds. Though they were all cool, some of these concepts weren’t even that innovative, Top Gear noted that “the previous Supra […] made similar numbers back in 1993.”
Reading the Room?
It’s important to note that another, lesser industry trend is that there are simply more big conferences where big companies are expected to show their latest. And in some ways, battery range improvements and strides toward autonomy feel more at place in a tech show like CES, which is basically morphing into an auto event anyway. With CES and the Detroit Auto Show happening within days of one-another, it makes sense that Detroit would have a more old-school kind of vibe.
“The focus on Mustangs and Supras plays to a particularly large crowd that isn’t yet ready for EVs,” Scott Shepard, senior research analyst at Navigant Research, tells Inverse. “Both OEMs here, Ford and Toyota, do have significant EV developments underway –- my bet is simply that they have nothing to show for it yet. I expect they make similar moves to GM’s rebranding of Cadillac, and begin to showcase all-electric crossovers this year.”
Promises of future cars don’t exactly get the blood pumping like a revved-up hot rod the crowd can see and hear. Shiv Patel, research analyst with ABI Research, tells Inverse that most major automakers will be releasing electric platforms in the coming years, like the Mercedes EQ, the Volkswagen MEB and the General Motors BEV3. Many of these have set sales figures somewhere around 15 to 50 percent of total vehicle sales somewhere around 2022 to 2025.
“OEMs also realize that the push towards electric vehicles won’t happen overnight, there are still consumer concerns around: charging infrastructure, range anxiety and initial vehicle purchase costs that need to be overcome,” Patel says. “These problems will start to alleviate only as the technology starts to gain scale and wide spread adoption among consumers, which will occur over time.”
Tesla would perhaps beg to differ. The firm has cemented itself as a giant of the industry with its all-electric lineup, achieving the fourth-largest market cap in terms of automakers and earning the most revenue from a single car in the American market in 2018 with the Model 3. CEO Elon Musk expects Model 3 demand to reach somewhere around 500,000 to one million cars per year as it goes global this year, but Volkswagen only expects to sell that many electric cars annually by 2025.
Volkswagen and Tesla are worlds apart in terms of output, though. While Tesla built its business entirely around electric, it only produced around 100,000 cars in 2017. In that same year, Volkswagen sold 10.8 million cars worldwide with a business built almost entirely around the internal combustion engine. Traditional automakers face tough challenges as they steer the business equivalent of a Titanic in a new direction.
“I can’t think of an OEM that does not have a full electrification strategy in development,” Shepard says. “Right now it may not look that way because most are more concerned with figuring out how 90-plus percent of their business can become efficiency standards compliant in the period before full electrification is at cost parity without subsidization.”
As the crowd gathered around the Supra to get a closer look, Chinese automaker GAC was sharing details about its all-electric Entranze concept car. The show captured an industry in slow, lumbering motion, limited to concept visions of the future even as it delivered the swan song of gas-powered cars.
“Relative to some three years ago I’d hesitate to say the industry is in denial,” Shepard says. “Perhaps struggling to catch-up, or have been caught flat-footed.”
Related video: Volvo’s Stunning Polestar Plug-In Hybrid Takes on Track Performance