National Post (National Edition)
Detroit show has horsepower, but electrics are few
Cheap gas fuels rise of trucks, SUVS Governments ‘new allies’ in fight to save GM plant
DETROIT • Automakers have promised to start selling hordes of electric cars in the next few years, but only two will be unveiled at the big Detroit auto show that kicks off this week — and those aren’t even ready for production.
Meanwhile, there will be plenty of SUVS and highhorsepower sports cars on display as cheap gasoline helps SUV and truck sales continue their dramatic climb.
So how credible is the industry’s pledge to move toward fuel-efficient vehicles when it keeps cranking out more lucrative trucks and sport utilities?
Some environmental groups contend that companies aren’t really interested in efficiency because they’re making tons of money from the sales of less-efficient SUVS and pickup trucks. These groups also say that without government fuel economy requirements, automakers won’t make progress toward electric vehicles that could reduce greenhouse-gas emissions.
Auto executives, however, say they’re already moving to more fuel-efficient trucks and SUVS, some now coming with gas-electric hybrid power systems. Soon there will be many electric SUVS, they say.
“Every one of our SUVS has hybrids somewhere in thefuture,hybridsorelectrified vehicles of some sort,” says Craig Patterson, Ford’s SUV marketing manager.
Patterson will help show off a new version of the Ford Explorer big SUV at the auto show starting Monday, and it will have an optional hybrid power system. It is Ford’s first hybrid SUV in six years, and the company also has plans for a fully electric SUV based on the Mustang sometime next year. Seven battery-powered vehicles are planned for the U.S. by 2022, evenahybridpickuptruck.
General Motors plans a Cadillac electric vehicle in 2021, and more than 20 that run on batteries or hydrogen in four years. Volkswagen, the world’s largest automaker, wants to increase the number of electric models from six to over 50 by 2025. Other brands such as Audi, BMW and Porsche and Jaguar are rolling out electric vehicles.
But in December, almost 72 per cent of new vehicles sold in the U.S. were SUVS and trucks, up from 49 per cent at the end of 2012. Because of the shift, Ford, Fiat Chrysler and GM are cancelling some or all of their sedan lines. At the same time, they are hedging their bets by planning electrics and hybrids to give people fuel-efficient SUV options should gas prices rise from the current national average of around US$2.24 per gallon.
Design work on the Explorer and other vehicles being introduced at the North American International Auto Show began more than three years ago, when automakers thought their new vehicle fleet had to average about 36 miles per gallon by 2025 under U.S. fuel economy standards. That’s about 10 mpg more than the current standards.
But the Trump administration has proposed freezing those standards at 2020 levels, a move that will spark a court challenge and a fight with California, which can set its own gas mileage and greenhouse-gas standards. A decision on freezing the standardsataround30mpg is expected later this year.
Simon Mui, a senior scientist at the Natural Resources Defence Council who works on clean vehicles, said if the standards are frozen, years of improved efficiency will come to a halt.
“Itendtotreattheseautomaker promises to roll out electric vehicles kind of like New Year’s resolutions,” he said. “There’s often a gap between what they promise and what they actually deliver.”
The government requirements are needed to make sure each automaker does their part, Mui said. Stable requirements bring down technology costs, and consumers benefit from using less fuel, he said.
But auto executives say they’ve been working to squeeze more efficiency out of the internal combustion engine, to the point where there isn’t much else they can do except add electric power.
Ford’s Patterson says even though gas is cheap, the company will sell the higher performance of hybrids, with gas engines boosted by instant electric power for acceleration. Consumers, he says, will be willing to pay for that. Also, Patterson says hybrids no longer cost much more than standard engines.
Ford plans to keep working as if the government won’t freeze fuel economy standards because it doesn’t know what will happen. “You have to meet it at some point, and you’re going to have to build (for) California,” he said.
Still, selling hybrid and electric vehicles is tough in an era of cheap gas. In the U.S., fully electric vehicles amounted to less than one per cent of new vehicle registrations through August last year. Yet globally, Navigant Research predicts huge growth in the next sevenyears,fromjustover1 million sales this year to 6.5 million by 2025. The surge is expected because of government incentives in China.
Even so, automakers could get stuck with slowselling electrics in the U.S. because of concerns over their limited range, and because it will take three to five years for battery and other costs to fall to about the same as gasoline engines, said Asutosh Padhi, co-leader of the automotive unit at the Mckinsey consulting firm. U.S. consumers always want more utility and performance for less or the same price, he said.
Another problem is a US$7,500 federal tax credit for EVS is starting to expire for some automakers, Padhi said. “It’s yet another headwind for electric vehicles in the near term, until the performance picks up, until we get to cost parity,” he said. DETROIT • Unifor Canada said the Ontario and federal governments are new allies in its fight against General Motors Co.’s decision to close its assembly plant in Oshawa, Ont.
Unifor national president Jerry Dias met with Ontario Premier Doug Ford and federal Innovation, Science and Economic Development Minster Navdeep Bains on Monday as auto industry and politicians gathered at the North American International Auto Show in Detroit.
Premier Ford has previously said the closure was a “done” deal, but Dias said the premier is “starting to take a different tact.”
“I was quite pleased when he said that he would roll up his sleeves, and in his meetings that he was to have with General Motors he would be very aggressive in having them change their position,” Dias told reporters at the auto show, going on less than a couple of kilometres from GM’S headquarters.
“There’s no question, they are new allies. The bottom line is I expect that they will be there if General Motors is looking for a solution,” Dias said. “I don’t believe our levels of government will just walk away.”
The premier attended the auto show Monday, where he met with industry executives. His office described the meeting with the union as constructive, but it didn’t make specific pledges.
“Workers are the backbone of our economy and Ontario has the very best in the world,” Ford said in the statement. “Creating good-paying jobs for the hardworking people of Ontario will continue to be my top priority as I engage with the auto industry in Detroit this week.”
Bains, who is trying to convince GM to stay in Oshawa, met with GM CEO Barra on Monday afternoon.
GM spokespeople have repeatedly said the planned closure is a done deal, part of a wider restructuring that includes the closure of eight plants around the world, including the century-old Oshawa facility and four plants in the U.S., including one in Detroit.
The changes are expected to save GM US$6 billion annually, which it plans to invest in electric and automated vehicles. Days before the auto show, Barra revealed that GM is working on an all-electric Cadillac.
But Unifor “will do whatever is necessary to get General Motors attention,” Dias said in response to a question about whether it planned protests or strikes.
His denunciation of GM took some shine off the display at the auto show, where GM’S vehicles gleamed on the showroom floor. Earlier in the day, U.S. representatives were also questioned about GM’S slated closures in Michigan.