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On the road to electrification, Detroit's big three are converging?

Publish Date: 2019.12.12

Although the electrified layout is different, the big three have all upped the ante by staying together.


For years, people have been skeptical about the potential demand for electric cars and their long-term profitability. Now, though, American automakers are coming to terms with the fact that electric cars will lay the foundation for the industry.


Last week, gm announced a $2.3bn, 50-50 joint venture in electric vehicle batteries with LG chem of South Korea. The companies plan to build a new battery plant in Lordstown, northeast Ohio. The plant, which is expected to start construction in mid-2020, will be one of the world's largest battery plants, with annual capacity of more than 30GWh and flexibility to scale up production as needed.

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The announcement comes just weeks after ford unveiled its first electric SUV, the Mustang Mach E, which is scheduled to hit the market next fall. In electrification, ford has fallen behind its rivals. Amid profit warnings and quality problems, it desperately needs a new model that can take on both the traditional giants and new powers like tesla. In an effort to catch up with its rivals, ford has decided to invest $11.5 billion to develop new cars that are all-electric and hybrid by 2022.


Fiat Chrysler (FCA) has been a laggard in electrification, with previously unsatisfying products such as the grand jetdragon and the fiat 500e. However, the FCA announced last year that it would invest $10.2bn between 2018 and 2022 to "introduce a range of electrification solutions".

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The Detroit three plan to spend tens of billions of dollars on electric cars over the next decade. While traditional automakers are responding to changing market trends, each is taking a slightly different route. In fact, it also reflects the fact that no one knows at this stage how electrification will develop or how consumers will adopt it.


General motors bet on pure electric


Gm was an early player in the development of electric vehicles, launching the ev-1 two-seater as early as 1996. But because of the high cost and the interruption of policy support, production of the ev-1 was halted after just over 1,000 vehicles were produced.


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In 2007, gm introduced the Chevrolet volt, a plug-in hybrid. The volt is a pioneering model, on par with the nissan leaf. Around 2010, the volt and leaf were among the first mass-produced electric vehicles.


Gm followed the volt in 2016 with the Chevrolet Bolt, an all-electric car that didn't fare well.


In 1998, ford introduced a pure electric pickup ford ranger; In 1999, ford launched the Think City, a small electric car, with a vision for the future of urban transport. After 2011, ford successively launched some new energy vehicles, such as focus pure electric version, mondeo PHEV, etc., but it failed to achieve satisfactory results.


In the early stages, ford and gm went down a similar road to electrification. But now the two motorised roads are diverging rapidly.


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For one thing, the Bolt has become the basis of what gm CEO Mary Barra calls the "road to pure electric power" as the company moves toward eliminating plug-in hybrids.


Last month, Rick Spina, vice President of electric vehicle programs, told CNBC on a phone that gm would launch a range of electric products in the next three to seven years. "We are leaning towards pure electric vehicles, and hybrid and plug-in will be phased out of their product lines.


Gm has said it plans to launch 20 electric cars worldwide by 2023. Spina said the goal was still "on track," a view reiterated by bora at a news conference.


The FCA and ford want everything


Edmunds senior analyst Jessica Caldwell said ford had been criticized for lagging behind in electric vehicles, but the new Mustang mach-e could be a comeback.


While gm is focusing on pure electric vehicles, ford will be sweeping the net and covering all types, including hybrids, plug-in hybrids and pure electric vehicles. Ted Cannis, ford's global head of electrification, suggested the carmaker would retain a "broader portfolio of solutions" until battery costs fell, range increased and public charging stations became common.


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Until now, the FCA has resisted new sources of energy. Mr Marchionne has long resisted electrification, arguing that profits from producing and selling electric cars are limited. He even warned consumers not to buy the fiat 500e, the FCA's only all-electric model, because it was losing money on every sale.


Since Mr. Marcione's unexpected death last July, his successor, Mike Manley, has focused more on the FCA's electrification program, committing $10.2 billion to electrification and hiring former Chevrolet Volt project manager Mickey Bly to develop the powertrain. In an exclusive interview, Mr McKay said the FCA would see a number of electrified products. "We are not leaders now, but we will soon change things."


The head of the FCA's powertrain division declined to give many details, but people close to the project offered hints that the company was developing a range of all-electric vehicles, including a version of the Pacifica minivan.

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That means the FCA's current path is similar to ford's, with plans to offer different powertrain options. But while there are obvious differences in the electrification routes of the Detroit three, there are also similarities.


Apparently, the Detroit three have realized the importance of group heating. This was demonstrated when gm teamed up with South Korea's LG chem, FCA with PSA and ford and Volkswagen Shared electric-car technology. There is no doubt that electric vehicles and autonomous driving are the two most important evolution directions of the automobile industry in terms of technology, and both of them are "money-burning pits". In the future era of smart electric vehicles, automakers are facing even greater pressure on r&d spending than in the days of fuel-powered vehicles. Even companies like Volkswagen and Toyota are increasingly feeling the need to cut back and stick together

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