Tesla Model X Missing Out On SUV Craze

Registration data compiled by IHS Markit shows that sales of the Tesla Model X SUV in the US have declined in the past two quarters. “Luxury SUVs are really hot right now, and the Model X should have been a big hit and broadened Tesla’s audience,” said Michelle Krebs, an analyst with Autotrader.com. “You don’t hear a lot of buzz about the Model X, and when you do, it’s the negative stuff.”

The Model X is “the best car ever built,” claims Elon Musk. So why is it not a beneficiary of the luxury SUV craze? There are several reasons, not the least of which is that the Model X is an SUV only because Elon says it is. Compared to a Chevy Tahoe or Acadia, it fails one important test — carrying lots and lots of stuff.

Model X Not Really An SUV

Thanks to Elon’s insistence that the Model X have low aerodynamic drag to maximize range, the rear of the car slopes steeply down from the roof to the rear bumper. That’s great for making a car that looks good. It’s not so great for a vehicle that is supposed to be able to take a family up to the lake house with all their fishing gear, camping stuff, and lots of suitcases. Tesla got the Sport and Vehicle parts right but forgot about the Utility component.

In its rankings of 15 luxury midsize SUVs, the Model X comes in next to last according to Consumer Reports. “SUVs are popular because of utility, and this is an SUV that doesn’t have a lot of utility,”  says Jake Fisher, director of automotive testing at Consumer Reports. “The X was a big science experiment to say, ‘How far can we go?’ And they went too far.”

Elon Musk confirms what Fisher says. He told an audience of investors during an earnings call earlier this year, “Model X became kind of like a technology bandwagon of every cool thing we could imagine all at once. That is a terrible strategy.” He even let a large part of the blame fall on his shoulders, calling himself an “idiot” for allowing hubris to take the place of common sense.

Where The Model X Went Wrong

The Model X was supposed to be a spinoff of the Model S sedan, but as things went along, it got further and further away from its roots. The Model X cars coming off the line in Fremont today share less than 30% of their parts with the Model S. It is expensive to produce, which makes it expensive to buy. Other than the “cool” factor, many owners are less than thrilled with their Model X ownership experience. Tesla says some of the reasons for lower US sales of the Model X include working through a backlog of overseas orders and building up a fleet of vehicles for customers to test drive at Tesla stores.

Toni Sacconaghi is an analyst for Sanford C. Bernstein & Co. He wrote a report recently that summarized his ownership experience with his Model X as “not good.” His car needed to go to the nearest Tesla service facility, 60 miles away. four times during the first 4 1/2 months he owned the car. “Like many (most?) Model X owners, we had repeated technology issues with our car,” Sacconaghi wrote on May 19 report.  Not everyone is as negative as Toni Sacconaghi. 88% of Model X owners tell Consumer Reports they would buy another one.

Model 3 Buyers Will Expect More

J.D. Power and Associates says many Tesla customers see the company through “rose-colored glasses.” In focus groups, it says many people are hard pressed to admit a car they spent so much money for has so many problems. It thinks buyers of the lower priced Model 3, due to go into production in July, may be less tolerant of shortcomings in their cars.

“Model 3 buyers will not be as accepting of body panel gaps or misalignment,” Kathleen Rizk, director of global automotive consulting at J.D. Power, told Bloomberg during a phone call. “As millennials step into the Model 3, they are expecting it to work perfectly.”

Musk, to his credit, seems to have learned from the mistakes made with the Model X, especially the ultra-cool falcon wing doors, which have suffered from numerous glitches. “We’re making the simplest Model 3 first, like we did with S,” Musk wrote in a Tweet recently. “Didn’t do it with X, because I was an idiot.” Mistakes are the best teachers and Musk is an excellent student.

Source: Bloomberg

BMW Motorrad Concept Zero Electric Scooter (w/Video)

Electric motorcycles, scooters, and bicycles all suffer from one common problem. Batteries are inherently heavy. Carrying that weight high up it the chassis diminishes the handling of any vehicle, but it is particularly worrisome in one with only two wheels.

At the Concorso d’Eleganza at the Villa d’Este in Italy last week, BMW introduced a new zero emissions electric scooter called the Motorrad Concept Zero which the company says represents its “vision of zero-emission urban mobility on two wheels.” The first thing people notice about the concept is that is carries the battery pack as low to the road as possible for nimble handling, a big plus for a scooter designed for fighting its way through traffic.

“The BMW Motorrad Concept Zero is not based on today’s concepts, but rather meets the basic functionality needs, the technical architecture and the digital reality of today’s users,” says Alexander Buckan, the chief of vehicle design at BMW Motorrad. “The technical realities of electric drive — such as the flat energy packs in the underfloor and the compact drive on the rear wheel — allowed us to create a highly distinctive design which shapes a new segment.”

Everything about the Concept Zero scooter is as futuristic as BMW engineers could make it. Although it is not intended for production, some of its features could show up on BMW products in years to come. There is no traditional gauge cluster, for instance. Instead, information about speed and range are displayed  directly onto the windscreen via a heads up display. All other features of the bike are controlled by a touchscreen.

A special connected “rider’s jacket” allows communication with the scooter using hand gestures. The Concept Zero also knows what is in a rider’s calendar and will choose music for the journey it considers appropriate for the rider’s mood and tastes. Is it possible it could play Born To Be Wild by Steppenwolf once it breaks free of traffic and gets out of the city and onto a two lane road?

What Is The Cheapest Electric Car In The States?

Are you looking for the cheapest electric car you can buy in the US? If so, the first thing you need to do is define your terms. There is great debate about whether a plug-in hybrid like the Chevy Volt is truly an electric car. To purists, anything with a gasoline range-extending engine is not really an electric, even though it may have enough range to meet the driving needs of 90% of Americans 90% of the time. Rather than add fuel to that debate, this article will simply focus on cars that operate exclusively on battery power. Look for a subsequent story on plug-in hybrid car prices in the near future. But first a few caveats.

Neighborhood Electric Vehicles

Neighborhood Electric Vehicles are very popular and there are dozens of models available, but they are limited by law to roads with a speed limit of 35 mph or less and are banned from use on highways. While they fit the needs of many people and there are whole communities built to accommodate them, they are really glorified golf carts. In fact, some actually ARE golf carts! Since they are not designed to leave the area where they are used most frequently, they are not included in this article.

Compliance Cars

Many of the electric cars sold in the US are so-called “compliance cars” intended to meet the requirements for zero-emissions vehicles established by the California Air Resources Board. The Fiat 500e is a perfect example. It is available only in California and one or two other states. Availability of other cars like the Ford Focus Electric may be extremely limited in most states. You can probably buy one in Oshkosh, but don’t expect your local dealer to have any in inventory.

The Cheapest Electric Car Will Presumably Be The …

Electra Meccanica Solo16.1 kWh battery, $15,500, 100 mile range

Priced at $15,500, the Electra Meccanica Solo is basic transportation for one person. This all-electric trike has an 82 horsepower electric motor and top speed of 80 miles per hour. The manufacturer claims a range of 100 miles. It has a 16.1 kWh battery, which is enough to qualify for a $5,000 federal tax credit. 0–60 acceleration is said to be under 8 seconds.

The Solo is no-frills transportation, but it does have 10 cubic feet of cargo space behind the driver. To put that into perspective, the soon-to-be released Tesla Model 3 has only 14 cubic feet available to haul stuff around.

There is a catch, however. The Solo is not yet in production. Although, the company says it will begin building cars early in 2018. It is accepting advance reservations now. A $250 refundable deposit is required.

Is it worth waiting a year to get the cheapest electric car on the market? Is a single seat vehicle adequate for your needs? Will the car really be produced? Only you can answer those questions.

Until Then … The Cheapest Electric Car Is …

The 2017 Smart ForTwo Electric Drive — $23,80068 miles of range, 107 MPGe, 55 kW motor

The Smart Fortwo electric coupe goes the Solo one better. It seats two people, but has a smaller battery and less range. Still, it is available now and wins the award for the cheapest electric car you can buy in America today. Having the extra seat is a big plus, but the Smart Fortwo is still a diminutive vehicle that may not be suitable for all drivers. If you want cheap, you have to make some sacrifices.

What Is The Cheapest Real Electric Car?

So far, this article has focused on precisely what it says in the title — the cheapest electric car you can buy. The Solo and the Smart Fortwo Electric Drive qualify, but each has drawbacks that may make them unsuitable to mainstream drivers. When it comes to “real cars” that real people can drive in the real world, here are the cars you should be looking at. Keep in mind that not all of them will be available in all areas.

2017 Hyundai Ioniq Electric — $29,50028 kWh battery, 124 miles (EPA), 136 MPGe, 88 kW motor

The Hyundai Ioniq is the cheapest electric car in America with room for 5 passengers. It is also a 5 door hatchback design, which means people can bring their stuff with them when they go places in it. Sales have just begun in the US, so availability may be limited in some areas, but the Hyundai Ioniq Electric will be offered in all 50 states. A version with a larger battery and more range is in the works but won’t be here until next year.

2017 Volkswagen e-Golf — $29,81535.8 kWh battery, 124 mile range, 119 MPGe, 100 kW motor

The e-Golf comes with a larger battery for more range. It is the electric version of the tried and true VW Golf, one of the most successful car models of all time. The e-Golf can be had with emergency braking and parking assist. The price, as you can see, is practically the same as the Hyundai Ioniq Electric.

2017 Ford Focus Electric — $29,99533.5 kWh battery, 115 miles, 107 MPGe, 107 kW motor

The Ford Focus Electric is comparable to the two models above and priced almost the same as well. It may be difficult to find outside of California, but that’s the case for the e-Golf as well and also for the Ioniq Electric until production ramps up.

2017 Nissan LEAF — $31,54530 kWh battery, 107 miles, 112 MPGe, 80 kW motor

The LEAF also got a larger battery for 2017. That increased the price, but the extra 30 miles of range should give drivers more peace of mind and freedom. The LEAF is not the most stylish of vehicles, but people who own them are quite pleased with the ride and handling — and the generous amount of interior room. More LEAFs have been sold worldwide than any other electric car in history. With a great balance between size, range, price … and availability, it’s no surprise that the LEAF continues to see solid sales. That said, much of that is claimed to be due to handsome discounts Nissan has been offering, discounts that may well make the car the cheapest electric car on the market in many regions.

2017 Fiat 500e — $32,78024 kWh battery, 84 miles, 112 MPGe, 83 kW motor

The electric version of the fun-to-drive Fiat 500 is strictly a compliance car available only in California and Oregon. Fiat often has special promotions on the 500e, like ultra-low lease rates designed to move them off dealer lots in order to make the people at CARB happy. This is the car that FCA head Sergio Marchionne once begged people not to buy because he says his company loses over $14,000 on every one it sells. That’s a dubious claim as production/sales ramp up and the R&D expenses get spread beyond more models, but you get the point — Sergio doesn’t want to sell EVs. That’s why it’s been a surprise that the 500e is sometimes the cheapest electric car on the California market (with discounts).

2017 Kia Soul EV — $32,80027 kWh battery, 93 miles (EPA), 105 MPGe, 81 kW motor

The Kia Soul is not available in all states, but it is the same cute, cuddly vehicle that Kia introduced to the market several years ago with a highly successful ad campaign featuring hip, happy hamsters. If the Kia Soul is your cup of tea and you can live with limited range, it may be just the car for you.

2017 Chevy Bolt — $37,49560 kWh battery, 238 miles, 119 MPGe, 150 kW motor

Photo by Kyle Field | CleanTechnica

The first all-electric car from Chevrolet with long range is wrapped in an attractive 5 door hatchback crossover-style body. It has almost as much range as a base Tesla Model S and has won several awards for its advanced engineering. Base models lack many safety systems and high-speed charging capability is an $800 extra, but for the money, it is a very attractive package. It is considered the first long-range, fully electric “affordable” car.

2017 Mercedes-Benz B250e — $40,82528 kWh battery, 87 miles, 84 MPGe, 132 kW motor

The battery-electric version of the Mercedes B-Class, the B250e, is overpriced for what is has to offer. It is an example of another compliance car where the manufacturer tried to shoehorn an electric battery and powertrain into an existing gas model to save money. It shows. Although it is a 5 door hatchback vehicle, the battery takes up much of the available cargo space behind the rear seat.

2017 BMW i3 — $43,39522–33 kWh battery, 81–114 miles, 118–124 MPGe, 125 kW motor

Photo by Jose Pontes | CleanTechnica

The BMW i3 is a miracle of modern technology and engineering. It features a carbon-fiber chassis that provides a safety cell around the occupants. It also is the only non-Tesla car that currently offers customers a choice of battery size. Pick the version (and the price) that fits your needs. The i3 is also available with a two-cylinder range extender to eliminate range anxiety. Its styling is offbeat and it drives like a BMW should.

What About Tesla?

Photo by Kyle Field | CleanTechnica

The Tesla Model S sedan and Model X SUV cost too much money to be included in this discussion. The midsize Model 3 is supposed to go into production in July of this year, but if you don’t already have a reservation, you probably won’t be able to buy one and have it delivered until late 2018 or early 2019. The company has about 500,000 reservations for the Model 3 worldwide. Although the base price is $35,000, the expectation is that the average selling price with options will be closer to $42,000, according to Mr. Elon Musk. But that’s just a rough guess, and we don’t know what the average selling price of any other electric cars is.

Conclusion

“You get what you pay for” has never been more true than when it comes to electric cars. The least expensive models come with few options and limited range. Many are only available in California and a few other states. The good news is that there are now two “real” electric cars that are available nationwide with prices starting under $30,000. Both are eligible for the full federal tax credit of $7,500. That means a careful shopper like you could park a brand new electric car in your driveway that has a net cost to you of $22,500 … before other incentives, like California, Colorado, and a few other states offer.

But be aware, you only get to take full advantage of that federal tax credit if you have a federal tax liability of $7,500 or more. If your total federal tax bill is $4,000, that’s all the credit you can get and you cannot carry any unused portion over to subsequent years.

Shop carefully and make sure you are getting all the car you need for the price you are willing to pay. A Solo or Smart Fortwo may be cheap, but if you need to transport three or more people on a regular basis, that low price is not going to leave you feeling happy about your buying decision.

Public Trust In Autonomous Car Technology Is Eroding

In 2016, the MIT AgeLab, in cooperation with the New England Motoring Press Association, conducted a study to determine public attitudes about autonomous car technology. It found that younger drivers were more accepting of the idea that cars could drive themselves without human input than were older drivers. The more mature people who took the survey liked the idea of active safety systems that help keep a car within its proper travel lane, issue side collision warnings, adapt to the speed of other cars on the highway, or brake automatically in an emergency.

Credit: MIT AgeLab 2017

This year, in advance of NEMPA’s seventh annual technology conference, the AgeLab repeated its survey. The results showed that over the past year, trust in autonomous car technology has eroded. Most surprisingly, the largest decrease occurred among younger drivers. In 2016, 26% of respondents aged 16-24 reported they were comfortable with full autonomy. This year, that number dropped to 14%. Among those 25-34 years old, 40% were comfortable with full autonomy in 2016. For 2017, that number plunged to only 20%.

Professor Bryan Reimer is an associate director of The New England University Transportation Center at MIT, an organization is whose mission, according to its website, is to “understand, manage, and creatively exploit the strategic implications of disruptive change on the future of the transportation system.” He is also the head of the MIT AgeLab that conducted the 2016 and 2017 surveys. He told the NEMPA conference the change in consumer attitudes is a danger signal for an industry that is spending billions to rush autonomous driving systems into production. The issue, said Reimer, is a lack of trust.

Part of that is a reflection of technology issues everyone experiences on a daily basis. All of us are familiar with cell phones that suddenly lose their signal, internet sites that crash, or stories in the press about hackers who have stolen millions of identities from online retailers. Certainly hacking and trouble with internet security played a significant role in the last US election. Another part of the lack of trust is the innate understanding that building systems that can perform perfectly in Boston traffic in the middle of a blizzard is an extremely difficult challenge.

Even though 42,000 Americans died in highway accidents in 2016, the press focused on two fatalities that took the lives of drivers who were driving Teslas in Autopilot mode — one in Florida and one in China. Professor Reimer told the NEMPA conference, “I could write a 50 page dissertation on why Tesla Autopilot should be banned and another 50 page dissertation on why it shouldn’t.”

Another issue the MIT survey revealed is that people are confused about how autonomous systems work. In general, drivers learn about the systems through trial and error more than any other way. Reading the owner’s manual is a close second. Dealers come in a distant third and are the subject of much criticism. When the MIT team, headed by Hillary Abraham, one of the co-authors of this year’s study, went to various dealerships and asked questions about autonomous driving technology, she and her colleagues found the sales staff was often just as confused as the customers.

Abraham falls into the “younger people” category. When I asked her if she would feel comfortable getting in a self driving car with no pedals and no steering wheel to take her to the airport, she demurred and her body language suggested the idea was not very appealing to her. When I changed the question to ask if she would trust an app that could summon a self driving car, her body language became much more receptive. She told me she would trust the app more than the car itself.

Reimer said the decline in trust of autonomous car technology by younger people should worry automakers. It’s all well and good to develop advanced systems, but if people don’t trust them, they won’t spend their hard earned dollars to buy cars that have them. In fact, in this year’s survey, when people were asked how much they would spend for cars with such miraculous technology, 49% said they would never buy an autonomous car at any price. There were many reasons for that and the most common ones are summarized in the graph below.

Any good sales person will tell you that people usually won’t buy a new product so long as they have questions about it. The chart above shows people have lots of questions about autonomous car technology. Manufacturers would do well to take Reirmer’s data to heart and figure out how to answer those questions if they want autonomous cars to do more than gather dust out behind showrooms.

Customer confusion about new technology is not limited to autonomous driving systems. Surveys show that people are just as confused about the differences between hybrid, plug-in hybrid, and electric cars. Chrysler is so afraid of raising the issue that is refuses to to tell people its new Pacifica Hybrid minivan is a plug-in hybrid vehicle. Questions about charging procedures and how to find charging stations abound. In general, many dealers are doing a poor job of educating people. In fact, sales representatives often give conflicting or inaccurate information when asked.

Readers of Gas2 have left comments about dealers trying to switch them from an electric or plug-in car to a conventional car, actually bad mouthing the newer technology in the process. One Chevrolet dealer didn’t know his Chevy Volt cars needed to charged and got into an argument with a customer who asked why the car he was test driving didn’t have a full battery charge.

Mark Fields, the former CEO of Ford Motor Company, famously told the press earlier this year that “nobody wants to buy electric cars.” Fields was fired this week and will be replaced by the former head of Steelcase, an office furniture manufacturer. Hopefully the new guy will know enough about sales to focus on educating potential buyers instead of making fun of them.

On Again, Off Again BMW i5 Off The Table — Again

Few concept cars have gotten as much press attention as the long rumored BMW i5. The German luxury car maker burst upon the electric car scene in 2011 with two highly innovative models that married electric powertrains with advanced carbon fiber manufacturing techniques. The i3 sedan, with its funky styling, became a cult darling, but suffered from modest range. The plug-in hybrid i8 sports car coupled an electric motor for the front wheels with a turbocharged 3 cylinder engine driving the rears.

It was widely assumed an i car would come along eventually to fill in the model range. In fact BMW often suggested it was working diligently on an i5. But somewhere along the line, BMW lost the thread of the conversation. Here are just a few of the Gas2 titles about the i5 unearthed from the archives: BMW i5 Under Consideration As Tesla Model S Competitor (2013), BMW i5 Could Be Powered By Toyota Hydrogen Tech (2015), Rumor: BMW i5 Will Be An SUV Arriving In 2021 (2016). Whew! That’s a lot of news for a product that never materialized.

Now, the well respected BMWBlog says the whole i5 idea has gotten the kibosh from management. In a blog post dated May 23, it wrote, “According to several sources, BMW has scrapped their i5 plans and will focus on electrification of other series models — like the X3 and 4 Series GT — and on the high-tech iNEXT model. This move will leave the i sub-brand with two models, i3 and i8 this year before the i8 Spyder is being added to the lineup.” The iNEXT is the all singing, all dancing BMW concept car the company wants to be its signature vehicle as it moves into its second century as an automaker.

BMWBlog says the carbon fiber chassis used in the i3 and i8 is not flexible enough to accommodate the large variety of automobiles in its product lineup. Instead, it will focus its energy on cars that can be powered by a variety of powertrains —  both electric and plug-in hybrids. BMW is following the example of Korean companies Kia and Hyundai, both of which now offer customers new models that can be had with their choice of hybrid, plug-in hybrid, or electric powertrains.

The future of the automobile is murky at best. It’s OK for Tesla to be a battery electric only car company, but the rest of the industry is trying to remain as nimble as possible so it can build the tens of millions of cars each year the world craves that are not pure electrics.

“The all-electric MINI and the all-electric BMW X3 will mark the beginning of the second wave of electrification for the BMW Group, benefitting from the ongoing technological progress we are making in this area,” said BMW CEO  Harald Krüger last week. “i NEXT sets out our strategic course for further electrification and the direction of project i over the coming decade. We will incorporate all-electric, battery-powered mobility into our core brands, as we have already done successfully with our plug-in hybrid vehicles. By using highly flexible architectures we can avoid duplicate investments in plant and equipment and will be able to adapt our range of electric and conventional vehicles to changing demand both quickly and efficiently.”

Source: BMWBlog  Image credit: Autocar

Volvo Parent Company, Geely, Buys Lotus

Li Shufu, the Chinese billionaire who purchased Volvo from Ford and oversaw the company’s successful resurgence seems to have acquired a taste for turning around car brands. I say that because he’s just acquired another storied, troubled, European car brand to turn back from the brink of extinction: Lotus.

That’s the same Lotus whose versatile chassis launched both Tesla Motors and Detroit Electric (to name just two). The same Lotus, too, that brought Kimi Raikkonen back to the top step of an F1 podium a few years back (before reverting back to Renault ownership, anyway). We’re big fans.

Being big fans, it was big news when Li’s Geely Holding Group announced, yesterday, that it would buy a 51 percent stake in Lotus Cars. For Geely, the brand could act as a prestigious “halo” brand to help grow the company’s eponymous core products. “Like Volkswagen has Porsche and Toyota has its Lexus,” explains Tian Yongqiu, an independent auto consultant who tracks Chinese car maker acquisitions.

Li Shufu Now Owns Both Volvo and Lotus

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Lotus has a history of using other car makers’ engines in its lightweight sports cars. If that history is a guide, we could see a featherweight Elise or Evora model powered by Volvo’s super-efficient, twin-charged T6 engine in the near future. There’s even talk of an ultra-sporty SUV coming hot on the heels of Geely’s expected cash injection into the British car brand. Could it be based on the all-new Volvo XC60? Should it be based on the new XC60?

Let us know what you think of Geely’s new acquisition- and whether or not you think Lotus and Volvo will make good partners in an eco-friendly- in the comments section at the bottom of the page.

Sources | Images: Bloomberg, LotusTalk

SCE $450 EV Rebate Applies To New And Used Cars

Southern California Edison is offering people who drive a plug-in or electric car a one time cash rebate of $450. What makes it different from other EV rebate programs is that it applies to second and third owners and those who lease cars as well. Typically, an EV rebate like the federal tax credit only helps new car buyers. If someone leases a new EV, those rebates go to leasing company (which is often a division of the manufacturer). Although that may help lower the customer’s lease payment, it puts no cash in the driver’s pocket.

“We hope that making second and third car owners eligible for a rebate will help stimulate the market for used electric vehicles,” said Laura Renger, SCE principal manager for Air and Climate Policy. “Not only will customers get a payment, they will also save because electricity is a low-cost fuel. Average fuel costs for an electric vehicle are 50 percent less than a car that runs on gasoline.”

Customers don’t need to jump through hoops to claim the rebate. It can all be done online at the Clean Fuel Rewards website. All that is required is that the name and address on the registration match up with an established SCE residential account. Once all the information is submitted an verified. SCE sends the customer a check.

The Clean Fuel Rewards Program is part of the state of California’s Low Carbon Fuel Standard Program, which combats climate change by encouraging the use of low and zero emissions vehiucles. SCE earns credits when customers use electricity at home to charge their electric vehicles. The value of these credits funds the Clean Fuel Rewards program.

SCE is also its Charge Ready program to promote driving on electrons instead of molecules by expanding the EV charging infrastructure in its service area. The expansion will add about 1,000 charging stations at workplaces, hospitals, destination centers, and apartment and condo complexes. Charge Ready targets places where vehicles are normally parked for a period of 4 hours of more. The first Charge Ready EV charger is located at the Lynwood City Hall and became operational in April.

Source: Electric Cars Report

Subaru Will Add Electric Cars To Its Lineup

Subaru and Mazda are like twin sons of different mothers. Both are small players in the auto business who have carved out a niche of devoted followers by doing a few things really well. Both are happy to play at the margins while the big boys fight over the middle. Over the years, Subaru has gained a reputation for building reliable cars that offer a high degree of occupant safety. But to keep up with changes in the marketplace, particularly in China, it needs to add electric cars to its offerings.

To make that happen, the company’s CEO, Yasuyuki Yoshinaga, told the press last week that his company will focus first on adding electric motors to its current models rather than creating a separate electric car division as Volkswagen and Mercedes Benz are doing. “If there’s already an attractive Subaru model, for example the XV crossover, and if a customer in Beijing wants one but is only allowed to buy an electric vehicle, if there’s no electric version then he can’t buy it,” Yoshinaga said. “Providing the choice of an EV means the customer can still desire the same Subaru.”

Subaru will invest $1.2 billion in research and development during the next 12 months, most of it aimed at getting a plug-in hybrid version of one of more of its cars into production by the end of 2018. Suppliers like GKN are already building complete EV powertrain components to speed the adoption of electric vehicle technology in the global marketplace and eliminate the need for each manufacture to design, test, and build its own hardware.

General Motors used to have a large stake in Subaru, but sold its shares some years ago to Toyota, which is also behind the curve when it comes to offering electric cars to its customers. It is likely some cross fertilization will take place between the two companies as each seeks to get in on the electric car future. Toyota will invest almost $9 billion in its research and development program in the coming year.

Yoshinaga also said his company expects to have a battery electric car to sell to customers by the beginning of the next decade. He did not indicate whether the BEV Subaru would be an entirely new model or based on an existing car in the company’s lineup. Building a car designed from Day One for electric power is the preferred approach, but developing completely new models takes about 5 years. Subaru may not have time to wait, as it is already late to the cars with plugs party.

Source: Bloomberg