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