Published on December 10th, 2018 | by Steve Hanley0
Ch…Ch…Ch…Changes — How GM, Ford, & Volkswagen Are Reacting To The Electric Car Revolution
December 10th, 2018 by Steve Hanley
Conventional wisdom says the only constant in life is change. Those who create change often think their innovations will be permanent, but they never are. The auto industry has enjoyed a long and successful history of building vehicles powered by internal combustion engines. Many car company executives assumed the merry go round ride would never end. Then along came Tesla and suddenly everything changed.
Traditional auto manufacturers are seeing their comfortable worldview upended by the approaching revolution in electric and autonomous cars. According to some, the action in the future will not be in building cars but in operating fleets of self-driving transportation pods that specialize in TAAS — transportation as a service. According to theorists, we won’t own cars any more. We will simply summon a vehicle to service our immediate mobility needs, whether they consist of a ride to work or towing a boat to the lake for the weekend.
GM’s EV Pivot
There was a time when General Motors was leading the electric car revolution. Its EV1 was the first mass produced battery operated car of the modern (or semi-modern) era, but that experiment ended abruptly. Years went by, and then The General brought out the Chevy Volt, a plug-in hybrid that stood the automotive world on its ear.
At a time when other PHEVs struggled to travel more than 10 miles before switching over to a gasoline engine, the Volt could go 5 times as far. For the first time, people could drive on electrons instead of molecules during most of their daily driving without worrying about range anxiety.
But GM refused to promote the car, preferring instead to build more and more pickup trucks and gargantuan SUVs. At the corporate level, it was almost as if the company was at war with itself — one part of its management team focused on the future and another part looked longingly to the past. In the end, the business as usual faction won. The Volt will officially go out of production on March 1, 2019.
Meanwhile, the Chevy Bolt electric car is limping along. While Tesla is taking the world by storm with its Model 3, Chevrolet is watching the world go by, content to sell a few Bolts here and there. Once again, it has no credible marketing campaign for the Bolt. Many Chevy dealers are disinterested in selling it and are doing nothing to promote the car.
But fear not, EV fans. General Motors has a plan! A great and powerful plan that will once again propel it forward into prominence as an electric car manufacturer to be reckoned with. And what it this amazing plan? Simple. Take Al Oppenheiser, currently the chief engineer in charge of the Camaro, and make him the head of a new Electric Vehicle Group. Huzzah! Problem solved.
GM spokesperson Michael Albano tells Car & Driver that electrification is of vital importance to the future of General Motors and that’s why the company is moving “some of our best talent” to the new division. Oppenheiser’s responsibility will be “broader than one specific vehicle,” Albano says. He will be working on a variety of EVs with a range of different body styles.
Whoopee. Regular CleanTechnica readers may find this announcement somewhat underwhelming. Whereas Volkswagen is talking about investing more than $50 billion in the next 10 years to develop electric and connected cars, GM is transferring one of its chief engineers from one program to another. It is reminiscent of Toyota’s approach. Back in 2016, it created an electric vehicle group and staffed it with four engineers. No wonder Elon Musk has trouble sleeping at night!
Ford & Volkswagen Propose A Pas De Deux
Ford and Volkswagen signed a memorandum of understanding last summer. The essence of the agreement was the two companies would explore ways to work together that would be mutually beneficial. VW CEO Herbert Diess was in Washington last week to meet with Donald Trump. The Donald has been fuming about imposing tariffs on German automakers for some time now, either oblivious or pretending to be oblivious to the fact that all of them have significant manufacturing facilities in the US and are among America’s top employers in the automotive sector.
Following the meeting, Diess told the press, “We are in quite advanced negotiations and dialog with Ford to really build up a global automotive alliance, which also would strengthen the American automotive industry.” CNBC reports a new, far reaching cooperation agreement between the two companies is expected to be signed before the end of January next year.
One focus of the expanded partnership could be Ford’s expertise building pickup trucks and commercial vehicles. Volkswagen would dearly love to get a piece of the US pickup truck market, a segment that foreign companies like Toyota and Nissan have never been able to crack. Here are other potential areas of cooperation according to CNBC:
- Sharing of assembly plants in the U.S. and other markets.
- Combined marketing and distribution operations that would leverage each company’s strengths in the US, Europe, and China.
- Working jointly on products in other market segments, such as pickup trucks.
- Development of autonomous and electrified vehicles.
Staying ahead of the curve on electric and autonomous vehicles is going to require boatloads of cash. It makes far more sense to share those costs than for every vehicle manufacturer to develop its own proprietary technology. One can only wonder if Volkswagen’s diesel emissions cheating scandal — which cost it $30 billion in the US alone — made it necessary for the Wolfsburg based company to seek out partners rather than forging its own way forward.
Nevertheless, there are still people at Ford who remember when an alliance between the two companies in South America fell apart and Ford got the short end of the stick during the divorce. On the other hand, Toyota thought it had a deal with Ford a few years ago to jointly develop a hybrid pickup truck but wound up being left at the altar when Ford decided to go in a different direction at the last minute.
Business is like a giant game of Risk. Alliances can form and then dissolve in a heartbeat. The only thing for certain is that some traditional automakers will be out of business soon. Based on the current news, General Motors certainly seems to be a prime candidate for extinction. It spends more time and money fighting Tesla than it does building cars to compete with Tesla. That seems to be a poor long-term strategy choice.