• / Free eNewsletters & Magazine
  • / My Account
Home>Detroit Rolls Ahead On Electric Vehicles -- WSJ

Detroit Rolls Ahead On Electric Vehicles -- WSJ

Detroit Rolls Ahead On Electric Vehicles -- WSJ

10/03/2017

 By Mike Colias 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 3, 2017).

Detroit's largest auto makers ramped up plans for electric vehicles in coming years, the latest push from traditional car companies to respond to tougher emissions regulations and the prospect that some markets across the globe could eventually ban internal combustion engines powered with fossil fuels.

General Motors Co. plans to introduce two more electric vehicles in the U.S. over the next 18 months and 20 globally within six years, the nation's largest auto maker by sales said Monday. At the same time, crosstown rival Ford Motor Co. said it had formed a new team to help direct investments toward new electrified vehicles expected in the next several years. The Detroit-based group, called "Team Edison," will explore partnerships with suppliers and other companies, the auto maker said.

The auto makers are investing billions of dollars in electric vehicles despite challenges turning a profit on them due to expensive technology costs that increase vehicle prices, and tepid consumer demand. GM and Ford are currently minting profits in the U.S. with fuel-thirsty pickup trucks and sport-utility vehicles that consumers find enticing amid low gasoline prices.

Electric vehicles account for less than 1% of U.S. sales, and a sliver of the nearly 90 million sold around the world. Infrastructure challenges remain, with additional charging stations needed to keep vehicles powered and avoid stranded motorists. Investors have bid up shares of Tesla Inc., pressuring traditional car companies, but the Silicon Valley electric-car maker consistently loses money.

Still, countries including China, the U.K., France and India have signaled plans to ban sales of vehicles powered with gasoline or diesel fuels in the coming decades. The head of California's Air Resources Board recently suggested the state could follow suit. That is on top of burgeoning negotiations among California, Trump administration officials and car executives over potentially relaxing tough future emissions standards that require companies to sell vehicles getting better mileage.

The upshot is car executives, even while highlighting challenges with market demand and lobbying for regulatory changes, are increasingly sounding bullish on electric cars and, in some instances, echoing statements from government officials.

"General Motors believes the future is all-electric," said Mark Reuss, GM's product-development chief, at the auto maker's suburban Detroit design center. He said GM's future electric vehicles would be profitable without further explanation.

©2017 Morningstar Advisor. All right reserved.