“Profit before planet”: US car giants snub EVs for easy-to-sell fossil-fuelled SUVs

Future production plans of American auto giants Ford and General Motors (GM) reveal that 15 times more SUVs and utility trucks are planned than electric vehicles, according to documents seen by news agency Reuters.

Both legacy car makers have widely communicated their commitment to electric vehicles (EVs), which have the potential to greatly impact the world’s carbon emissions for which transport accounts around 20%.

On March 5 we reported General Motors’ unveiling of a $US20 billion ($A32.7 billion)  “ambitious” electric vehicle plan to introduce 10 new electric models by 2021 including a wide range of segments from passenger vehicles to SUVs, commercial vehicles and even advertised an all-electric Hummer at the US major sporting event, Superbowl.

Ford has also made much ado, partnering with Volkswagen and announcing a plan for 16 electric models, as well investing $US500,000 ($A820,000) in Michigan-based EV startup Rivian.

But the plans, seen and reported on by Reuters on Thursday, suggest that in 2026, both car makers combined have 5 million SUVs and utility trucks (known as utes in Australia and pickups in the US) but only 320,000 if these will have electric drivetrains.

Four out of ten vehicles sold globally are SUVs, according to a 2019 report by the International Energy Agency (IEA), and the growth in popularity of this segment has made it the second largest driver of emissions growth.

From 2010 to 2018 the market share of SUVs ballooned from 17% to 39% increasing emissions to more than 700 megatonnes of carbon dioxide. In the US, almost half of cars sold are SUVs, the report states.

If market demand for SUVs continues to grow at the pace of the last decade, global demand for oil will increase to 2 million barrels a day by 2040, putting the gains made by electrification of transport ever more at risk.

As Reuters points out, the decision by GM and Ford to continue to focus on selling high emissions SUVs and utility trucks that are cheaper to produce and sell, all the while with larger margins, is putting profits before the planet.

GM and Ford executives told Reuters that while electric vehicle plans put forward by the companies were serious, the concern was getting ahead of market demand.

“We’re trying to time this with the natural demand of consumers (so) we’re not forced to do artificial things and we don’t violate the laws of economics,” Hau Thai-Tang, Ford’s chief product development and purchasing officer, told Reuters.

“We want to meet customer demand with the best possible (carbon) footprint on the planet to help improve the CO2 (carbon dioxide) situation,” said Doug Parks, GM’s executive vice president of global product development, purchasing and supply chain was quoted as saying by Reuters.

Both Ford and General Motors are planning electric utility trucks – as mentioned above, GM is planning the electric Hummer while Ford has showed off an all-electric F-150.

But the larger footprint and weight of vehicles such as these demand larger batteries, making them far more expensive to make than their fossil-fuelled equivalents.

Although Rivian is planning to sell its premium R1T electric ute and R1S electric SUV in late 2020 from around $US70,000 ($A114,540 converted), and compared with GM’s $US80,000 ($A130,910 converted) high-end Cadillac Escalade which can generate 12x the profit of a compact fossil-fuelled car, the profits will be comparably less.

Auto giants such as GM and Ford also have electric car pioneer Tesla to contend with. In November, CEO and co-founder Elon Musk unveiled the revolutionary, although polarising, Cybertruck that will sell from $US39,900 ($A65,290 converted) in the US.

Part of the problem is the structure of US emissions standards, which separates SUVs and utility trucks from far stricter passenger vehicles rules.

The rules, which were introduced by the Obama administration, preceded the rise in popuarity of SUVs.

“We didn’t expect that SUVs would be so prevalent,” said Margo Oge, former head of the U.S. Environmental Protection Agency’s office of transportation air quality as quoted by Reuters.

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