Electric vehicles are still in their infancy in terms of the share of the market that they own here in the United States, peaking at 2.6 percent of sales in September 2019 according to the Edison Electric Institute. While almost every automaker has marketed themselves as pushing towards the electric future, the brands are still selling relatively tiny amounts of them compared to their other products. According to a report by Reuters, it appears that Ford and General Motors‘ short term plans have little to do with their growing EV lineups, and rather remain reliant on gas-powered SUVs and trucks.
The report states that the North American production plans for the two Detroit automakers paints a very different picture than their public positions. The two automakers will combine to produce some 320,000 electric vehicles for the 2026 model year, while also building more than five million SUVs and pickup trucks, a 14 percent increase over 2019’s figures. To put that number into perspective, Tesla Motors sold 367,500 cars across their lineup in 2019. These projected EV figures should equate to 5 percent of GM and Ford’s combined sales in North America at that time.
The two automakers are expected to sell only 35,000 EVs during the 2020 model year, nearly 10 times less than their projected mid-decade totals according to Reuters. As the companies ramp up their EV production, the number of SUVs and trucks that will hit the pavement will increase much more rapidly. Don’t get fooled by the Mustang Mach-E or the GMC Hummer into thinking that many these trucks will be electric themselves, as it’s projected that 93% of the trucks and SUVs coming out of Detroit and Dearborn will be petrol-powered.
So why are we all being told that the future is electric by executives if the automakers don’t have any real plans to get us there? There are a few reasons for that. For starters, the companies are trying very hard to appease both the bankers on Wall Street and the person stopping at the bank on main street. Investors are drawn to the Silicon Valley appeal of electric cars thanks to Elon Musk, but your average American buyer is still not likely to consider purchasing one. Furthermore, the expenses involved with developing and producing an EV remain high, while profit margins on trucks and SUVs have never been higher than they are today.
With the global economy in limbo as the coronavirus pandemic lingers on, gas prices have also plunged to levels not seen in over two decades. As history shows, the cheaper gas gets, then the bigger and more thirsty of a vehicle people are likely to buy. Should the coronavirus have lasting impacts on the economy in the coming years, automakers are going to chase what makes them money. That isn’t going to shift away from SUVs and trucks over the course of the next six years. Combine that with the lower fuel economy standards of the Trump administration’s newly passed SAFE Vehicle Rules, and EVs seem even less likely to take over.
Whether or not electric vehicles make sense for buyers at this point, there is no doubt that they will continue to grow in popularity around the globe. It is important to highlight again that these plans from Ford and GM specifically apply to the North American market, as EVs are going to be a huge part of the Chinese and European market by the end of the decade due to increasingly stringent regulations.