As the path toward electric vehicles becomes murkier, automakers are no longer prioritizing zero-emission vehicles. Instead, they are ensuring customers have powertrain options.
Automakers are committed to building gasoline, hybrid and electric vehicles amid softer-than-expected EV demand and a slew of potential policy changes by the Trump administration.
Over at least the next decade, “having that flexibility will be very important,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.
The transition to EVs will continue, but automakers must cater to “consumers who want the product they understand, with a gas engine,” he said.
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The shift to electrification is transformational for the industry, Bob Nelson, executive vice president of American Honda Motor Co., told Automotive News Feb. 4 at the grand opening of the Ionna charging network, a joint venture of eight major automakers.
“In an ideal world, policy [and] regulation would be moving together to make this transition,” he said. “We still believe in the technology. … It’s a marathon, not a sprint, and we’re still optimistic on our path forward.”
Manufacturing flexibility has always been part of Honda’s plan, Nelson said. The automaker can build EVs and gasoline-powered vehicles on the same line “very efficiently.”
“We believe that’s important to adapt to the market as we move along,” he said.
Most automakers agree that building EVs, gasoline-powered vehicles, conventional hybrids and plug-in hybrids — or some combination of the four — is necessary through the transition to electrification. But it is costly, uncharted territory for much of the industry.
Kia, for example, sells all four vehicle types as it grows its EV business.
“Depending on a specific customer’s needs, we have a solution. That was basically the idea going in,” said Orth Hedrick, executive director of car product management at Kia. “It’s not the least expensive way of approaching the market.”
The number of plants that will build vehicles with three propulsion systems — internal combustion engine, hybrid and EV — will nearly double from 11 in 2023 to 21 in 2029, according to a July report by The Chicago Fed, which cited S&P Global Mobility data.
The most efficient plants have the same type of vehicles on an assembly line, Fiorani said. But consumer demand will shift from gasoline vehicles to hybrids to EVs.
“Holding onto flexibility today is key for the profitability of these companies,” he said.
Consumer demand drives automaker lineups
Most automakers said consumer demand has influenced their EV plans more than evolving federal regulation and incentives.
“The best technology always wins,” said Shawn Domeracki, vice president of Lexus sales and dealer development. “Our goal always is to reduce as much carbon as quickly as possible” with hybrids, EVs and eventually hydrogen fuel cells.
Automakers continue to invest in the EV ecosystem, despite an uncertain adoption timeline. They are building domestic supply chains for EVs and batteries and expanding public charging infrastructure.
Eight automakers — BMW, General Motors, Honda, Hyundai, Kia, Mercedes-Benz, Stellantis and Toyota — created the Ionna charging network, which aims to install 30,000 chargers by 2030.
“All of us have a great [electric] car line portfolio ahead of us,” said Nico Dettmer, COO of Mercedes-Benz Charging Solutions. “We need chargers — a lot of them.”
