Slow sales haven't deterred others from charging into what may prove to be the auto industry's biggest growth story in decades. Volkswagen AG is in front, with 17 battery-powered models available right now, followed by BMW's 13 plug-in vehicles. Even a more cautious U.S. automaker such as General Motors expects to have 20 all-electric options by 2023, including seven different crossovers/SUVs.
A slow roll to electrification can make sense. An automaker gets to save in the near term by allowing rivals to pay for electrification r&d. In a few years, when the costs of batteries have dropped drastically, a latecomer can then try to hammer out deals with the best suppliers and be right back in the electric race.
"That is the bet," said BNEF analyst Colin McKerracher. "Basically, they think they can wait and see."
FCA boss Sergio Marchionne went so far as to beg customers to not buy the all-electric 500e, noting in 2015 that his company was taking a $14,000 loss on every one that silently coasts out of a dealership. More recently, he questioned the wisdom of EV production under current circumstances: "I don't know of a [business] that is making money selling electric vehicles, unless you are selling them at the very, very high end of the spectrum," Marchionne told a crowd at the Detroit auto show.
While skipping the infancy of electric vehicles has advantages, there are risks to being late. Subaru, for instance, could tarnish its halo among the environmentally sensitive drivers now placing hundreds of thousands of reservations for emission-free Teslas. Latecomers also risk missing out on recruiting top electric engineers and establishing vital battery-supply deals.
Battery prices have fallen by 79 percent in the past seven years, a pace that will make electric vehicles cost-competitive with internal combustion cars by 2024, according to BNEF. "Once this happens, things will shift quite quickly," McKerracher said. "Even now, you're starting to see more and more automakers say, 'Yes, we can actually make money on these things.'"
No less a skeptic than Marchionne foresees demand accelerating quickly. He expects that by 2025, more than half of all vehicles sold will be powered, at least in part, by batteries or fuel cells, and he recently gave the greenlight to build hybrid drivetrains on all models of Ferrari, another company he helms. Fiat is also steering its Maserati brand squarely into Tesla Inc. territory, with plans for a sinuous, all-electric sports car that will zip up to 196 mph.
The thesis that an electric laggard can just order the right package of parts and quickly get back in the race has one glaring weakness: Back in 2003, Tesla filled the lonely role of startup automaker; today, a rash of companies is trying to sell electric vehicles as a way to break into the industry. The commodification of batteries and efficient, reliable electric motors is lowering the industry's barriers to entry.
Workhorse Group, a Cincinnati-based manufacturer, is now taking orders for what it bills as the first "plug-in range extended electric pickup." The rig, which took three years to develop, is largely an exercise in parts shopping: The gasoline engine comes from BMW, the battery from Panasonic Corp., the chassis from Detroit's own Quality Metalcraft Inc., and the differentials from Dana Inc., an Ohio-based supplier that sells similar parts to GM.
Workhorse CEO Stephen Burns said the all-in cost to design and bring the truck to market was a number "that a traditional car guy would laugh at." The hybrid pickup will retail for $52,500.
The most popular truck in America, Ford's F-150, won't have battery power until 2020. "It's just one of those classic things where the incumbents have such a thing to protect," Burns said of Ford's slow-roll to battery-powered trucks. "Honestly, we're much more worried about Tesla coming out with a pickup."
Subaru, meanwhile, will make its late debut as the manufacturer of a battery-powered vehicle by co-opting hybrid technology from Toyota, which owns almost 17 percent of its shares. That partnership and Subaru's relatively small size enables company leaders to believe they can afford to be patient.
"I'd rather be last in and get it right," said Doll, Subaru's U.S. chief, "than be first in and destroy my brand image and reputation."