While the coronavirus has created an enormous challenge for the auto industry, it isn’t likely to derail plans to roll out new electric vehicles in the coming years, industry experts and automakers told Business Insider.
Emissions and production regulations, particularly in Europe and China, will give auto companies little choice but to sell more EVs, said Maryann Keller, the principal of Maryann Keller and Associates.
Volkswagen, Toyota, and four other automakers told Business Insider the coronavirus will not impact their EV plans.
But there are still questions about how much demand there will be for EVs.
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The coronavirus has threatened the automotive industry like no event since the 2008 financial crisis. Temporary factory closures, falling demand, and the prospect of a yearslong recession have put automakers in a bind as they balance major investments in electric vehicles and autonomous-driving technology with a near-term business model increasingly reliant on gas-powered SUVs and pickup trucks.
“The easy money that they made in the last few years has basically come to an end,” said Maryann Keller, the principal of the automotive consulting firm Maryann Keller and Associates. “They never could have envisioned that they would be in this position right now.”
A handful of EV-related delays announced in April raised the prospect that the coronavirus pandemic could derail the auto industry’s plans to ramp up the production of new electric models in the coming years. That isn’t likely to happen, industry experts and automakers told Business Insider.
“In the long term, it doesn’t change anything,” David Whiston, an analyst at Morningstar who covers the auto industry, said of the coronavirus’ impact on electric-vehicle investments. “It just slows the inevitable.”
Regulations will boost EV production
While the coronavirus may force automakers to push back some EV rollouts by a few years, government-mandated emissions standards and production quotas — particularly in Europe and China — will give them little choice but to sell more electric vehicles in the long run, said Maryann Keller, the principal of the automotive consulting firm Maryann Keller and Associates.
“The challenge that all the auto companies have is that their governments are pushing them in this direction, and they have no idea whether or not it’s going to be a profitable transition,” Keller said.
Some auto companies, like Volkswagen, have made large investments in electric vehicles that would be difficult to roll back, said Lea Malloy, the head of research and development at Cox Automotive Mobility. Both Volkswagen and General Motors have unveiled EV platforms developed with the assumption that they will one day power a large number of electric models.
Representatives for Hyundai, Subaru, BMW, Fiat Chrysler, Volkswagen, and Toyota told Business Insider the coronavirus will not impact their electric-vehicle plans. A General Motors representative said the production timelines for its upcoming Cadillac Lyriq and GMC Hummer EV electric vehicles are still on track, while Tesla CEO Elon Musk said during an April earnings call that the electric-car maker was continuing to invest in new products …read more
Source:: Business Insider