Automakers from every major industrial market all see an electric future.
That was the theme of separate announcements by Volkswagen, Cadillac, Nissan’s Infiniti division and China’s GAC at the North American International Auto Show in Detroit this week.
Volkswagen AG, which says it will invest $50 billion through 2023 toward the development and production of electric vehicles and digital services, plans to send a chunk of that cash to Tennessee.
The German automaker will spend $800-million on its Chattanooga factory to make it the North American base for manufacturing electric vehicles. VW will add 1,000 jobs at the plant to start EV production in 2022. The factory will build all-electric vehicles that use VW’s modular electric toolkit chassis, or MEB, starting with the production version of the I.D. Crozz SUV.
“It will be one model initially, but the plan is to have more,” said Mark Gillies, VW’s spokesman.
Gillies said it made sense for VW to use capacity in Chattanooga.
“It’s also important under the various trade deals that we produce a large percentage of our vehicles locally in the North American region, and Chattanooga was the perfect place to put the MEB production,” he said.
The larger EVs coming to market in the near term are being driven partially by automakers needing to offer these products for regulatory needs, said Stephanie Brinley, an analyst at IHS Markit.
“But in the longer term, there is the expectation that market demand will be there,” Brinley said.
In 2018, electric vehicles accounted for less than 1 percent of vehicle sales in the U.S. Brinley said sales will improve as more models come to market and charging infrastructure is built up.
Other automakers showed electric crossovers and discussed their plans but didn’t set production dates.
“The announcements for this particular show were really about future product and trying to build up some enthusiasm,” Brinley said.
Cadillac to lead EV charge
Cadillac, the luxury division of General Motors, will be the electric vehicle division for the Detroit automaker, officials said at the show. Cadillac showed a teaser photograph of a future electric crossover but didn’t provide much detail about the vehicle.
The drive units and battery cells for the yet-to-be named SUV are being designed for use throughout GM vehicle lineups in different countries, the automaker said. They will fit into front-, rear- or all-wheel drive vehicles, and the output of their battery systems will be adjustable based on vehicle and customer needs.
Meanwhile, Guangzhou Automotive Group, or GAC, used the show to introduce the Entranze, a seven-passenger vehicle designed in California.
The Entranze concept crossover is a highly stylized but believable execution that GAC plans to produce as an electric vehicle in the second half of 2019.
Infiniti, part of Japan’s Nissan, unveiled its QX Inspiration electric crossover in Detroit. It said every model the brand will launch starting in 2021 will have some electrification component, either a pure electric or hybrid powertrain.
“We’re going full speed ahead (with electrification), and I think what you see today is really the promise or the illustration of what the design language will be, both external and internal,” said Christian Meunier, Infiniti’s global president.
While the QX Inspiration is just a concept, Meunier said it “showcases the future of Infiniti very, very clearly.”
The Infiniti and Cadillac EVs might arrive late to the party, said Sam Abuelsamid, an analyst at Navigant Research. He expects the Cadillac EV to not reach the market until the latter half of 2021, or perhaps 2022.
“By that time, everyone else in the premium crossover segment is going to have products in market for a couple of years,” he said. The Jaguar I-Pace and Audi E-Tron are already on sale, with the Porsche Taycan, Tesla Model Y crossover and Ford’s upcoming battery electric crossover coming in the near future.
Expect many of the new electric vehicles to be larger than first- and second-generation EVs on the market now, Brinley said. The industry started with small EVs like the Chevrolet Bolt and the Nissan Leaf, but in order to expand that market, it needs more body styles.
“If you don’t put it into a package that the consumer wants, it’s going to be really hard to sell,” she said.