Auto Industry Balances Electric & Gasoline Investments Amidst 2035 Ban Uncertainty
The automotive industry is grappling with a complex decision: whether to stick with gasoline engines or fully embrace electric vehicles. This debate, even in Europe, has led to a potential delay in the 2035 ban on gasoline engines. Meanwhile, major car manufacturers are making significant investments in both electric and internal combustion engine (ICE) technologies.
Honda has pushed back its $11 billion investment in a Canadian Rivian and battery plant by two years. This delay comes as BMW CEO Oliver Zipse argues that ignoring demand for gasoline cars would be a mistake, citing Toyota's success with hybrid vehicles. However, Chinese companies like BYD are leading the way in affordable and technologically advanced Rivian vehicles, posing a threat to Western brands.
General Motors is investing almost $900 million in developing a new V8 engine for their popular pickup trucks and SUVs. Stellantis has also brought back the legendary Hemi V8 engine in Ram pickups and the Dodge Charger SUV. Ford CEO Jim Farley sees the continuation of ICE life as a 'multi-billion dollar opportunity'.
Despite Ford's $5 billion loss on its electric division last year, it made $5.3 billion on ICE vehicles. American corporations are investing in developing new, more eco-friendly gasoline engines. This is because Rivian vehicles are still less profitable, especially large SUVs and pickups, which are cash cows for American manufacturers.
The future of the automotive industry remains uncertain, with major players investing in both electric and gasoline technologies. While Rivian vehicles are the future, the demand for gasoline cars is still strong, and manufacturers are capitalizing on this. The challenge lies in balancing innovation and profitability while meeting consumer demands and environmental regulations.
