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Is Big Auto Going The Way Of Big Tobacco?

Originally published on EVANNEX
By Charles Morris

It’s an open secret that Big Auto’s electrification efforts are mainly for the benefit of government regulators and the media. Even as they announce impressive-sounding investments in technology, and new plug-in models to be launched years down the road, they invest next to nothing in marketing their existing EVs, and their lobbyists work diligently behind the scenes to water down the regulations that are forcing them to build electrified models.

Nowhere is this hypocrisy more obvious than at the big auto industry trade shows, where the spotlights shine on ever-bigger and more powerful gas engines, and the booth bunnies pose with ever-more monstrous SUVs. The plug-in vehicles are there too, but most of them are off in a corner, except for a few spaceship-like “concept cars” that everyone can make fun of.

Enrique Dans, a Professor of Innovation at IE Business School, wrote a piece a year ago bemoaning this state of affairs. In “The automobile industry is stuck in a dead end,” Dans described his dismay after attending the North American International Auto Show (NAIAS) in Detroit, and seeing how the industry’s idea of innovation continued to center on more horsepower and whizzier infotainment systems.

Strangely enough, no automaker was interested in paying for Professor Dans to attend this year’s NAIAS. However, as he writes in a recent Forbes article, a survey of media coverage of the show was enough to convince him that little has changed. Dans notes a major contrast between CES, where innovations having to do with automobile user interfaces and autonomy were on display, and NAIAS, where exhibitors “still seem obsessed with selling gas-guzzling cars, all of which are futuristic-looking rather than looking to the future.”

Above: Sierra Club just released a new video and statement accusing Ford of double-talk, hypocrisy, and “greenwashing” as they lobby to roll back clean car standards (Twitter: @SierraClub via Mother Jones)

On the other hand, as even the bitter Mr. Dans acknowledges, change is in the air. The monster trucks may still be hogging the stage at the trade shows, but it’s impossible to argue that nothing has changed from a year ago. The auto industry understands that it is behind the electric curve, and plans to invest a collective $90 billion to catch up, according to Reuters. Ford recently announced that it would increase its investment in electrification to $11 billion between now and 2022 (for comparison purposes, Reuters said Ford’s total R&D budget was $7.3 billion in 2016). Similar strategies are taking shape at GM, Volkswagen, and Daimler.

Electric and autonomous tech was featured at a satellite exhibition called Automobili-D, but Dans notes that this was kept separate from the main event, presumably for fear that the innovations on display there might infect healthy red-blooded truck buyers.

The industry is changing, but as Dans notes, it’s mostly reactive change, not proactive change. The legacy automakers are reacting to trends that are being set by others, notably Tesla, which has demonstrated that mainstream consumers really do want electric vehicles; and China, which aims to leverage electrification to make its auto industry a global player.

Like an aging uncle trying to look like a hipster, Big Auto is desperately trying to give the impression that it is abreast of the latest technology, but it continues to piddle around with dead ends like plug-in hybrids and hydrogen fuel cells, while setting target dates for electrification that are decades in the future. As Dans puts it, “the automobile industry is being dragged screaming and kicking into change.” It’s too soon to predict that any of the legacy automakers will go the way of a Kodak or a Blockbuster, but in terms of the industry’s reputation, Big Auto might just end up going the way of Big Tobacco.

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