(Ford CEO Mark FieldsFord)
The year 2010 seems like a long time ago. That was when a bold future for electric cars appeared to be opening.
Tesla was about to roll out its first original design for an EV, the Model S, which would go on to be named Motor Trend's Car of the Year for 2013.
There's were numerous electric-car startups aiming to join Tesla, and the major automakers were producing their first EVs since GM had killed it EV-1 in the 1990s.
Since then, the promise of an electric-car revolution hasn't just failed to materialize — it's actually retreated.
The reason is simple: consumers don't want electric cars. It's the D-word — demand. And demand isn't there.
This market reality has collided head-on with an increase in federal fuel-economy standards, mandated by the EPA. Automakers want the government to ease up on the timetable, so that they can sell as many profitable pickup trucks and SUV in the US as possible, while sales are running at historically record levels and gas is cheap.
This is purely good business — carmakers want to bolster their balance sheets now, while the bolstering opportunity is good, ahead of the inevitable downturn.
Trump to the rescue?
Auto industry leaders are now seizing a chance to get President-elect Donald Trump's administration to give them a break, while at the same time not completely backing off the EV aspects of their product portfolios.
Here's Bloomberg's John Lippert and Jamie Butters:
Ford Motor Co. plans to lobby President-elect Donald Trump to soften U.S. and state fuel-economy rules that hurt profits by forcing automakers to build more electric cars and hybrids than are warranted by customer demand. “In 2008, there were 12 electrified vehicles offered in the U.S. market and it represented 2.3 percent of the industry,” Mark Fields, chief executive officer of Ford, said in an interview at Bloomberg’s Southfield, Michigan, office Friday. “Fast forward to 2016, there’s 55 models, and year to date it’s 2.8 percent.”
Fields is as committed as anyone to making sure that Ford is part of whatever revolution in transportation occurs in the coming decades, but he doesn't have the luxury of being a starry-eyed visionary. His job is to make sure that Ford is profitable, that it's balance sheet is strong, that it maintains or grows market share in critical parts of the world, and that it doesn't fall behind on innovation, in all areas of the business.
(An electric Ford Focus.Ford)
If you look at the simple math that Fields presented, it's not hard to see why he wants the EPA's expectations to be adjusted. There's been a more-than-fourfold increase in the number of EVs for sale in US, and yet the market for those EVs has grown by a negligible 0.5%.