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Analysis

Automakers’ Electrification Targets

By Alejandro Enríquez | Thu, 09/30/2021 - 15:15

Electrified vehicles are at the core of ambitious goals toward a more sustainable auto sector. Over the last two years, many light-vehicle manufacturers have announced and updated their goals regarding electrification and the role that EVs will play in their long-term strategies. Some automakers have set clearer targets than others and some have broader plans regarding Mexico’s participation in this green transition. “Electrification is not coming, it is already here. Globally, there are more than 3 million vehicles powered by alternative energy sources and 75 percent of them are electric,” says Elias Massri, CEO of Giant Motors Latinoamérica.

Sales of electrified vehicles in the country continue to gain strength despite the pandemic. As a percentage of total vehicle sales, electrified vehicles represented only 0.26 percent in 1Q16. Only five years later, in 1Q21, they represented 3.81 percent of total sales with expectations for over 5 percent in 2Q21. NPHVs account for most of the sales, followed by PHEVs and then BEVs. According to the International Energy Agency, Mexico had the third-largest ratio of public chargers per EV units in 2020. As for production, only Ford is trusting heavily in the country's manufacturing capabilities for electrified powertrains. Since 2017, Ford has produced its Fusion hybrid in Mexico, followed in 2018 by the Lincoln MKZ hybrid. Both stopped production in 2Q20 to make room for the production of the Mustang Mach-E, the first BEV from a major automaker produced in the country. “The potential for producing these vehicles in Mexico is enormous; the challenge is to set the stage to make the most out of that potential,” says Luis Lozano, President of Toyota Motor de México.

OEMs' specific targets for electrified vehicles include battery electric vehicles (BEVs), fuel-cell electric vehicles (FCEVs), non-plug-in hybrid vehicles (NPHV) and plugged-in hybrids (PHVs). To read more on carbon neutrality here.

GM: All-Electric Future

The US giant has quickly deployed ambitious targets for zero crashes, zero emissions and zero traffic. Its shift toward more ambitious electrified vehicle development accelerated over the last year and the company has agreed with US President Joe Biden's plans to accelerate EV infrastructure. GM’s goals include 30 new global electric vehicles by 2025, of which more than two-thirds will be available in North America. The electrified models will arrive to the Cadillac, GMC, Chevrolet and Buick brands "with EVs at all price points for family, work, adventure and performance purposes," states the company. By mid-decade, the company expects to sell a million EVs per year in its two largest markets: North America and China. Notably, the company's ventures in developing its own Ultium battery packs make it confident that "battery costs will be 60 percent less than the batteries used today,” which is expected to drive EV prices down.

Ford

Although the company has announced more than US$22 billion in investments toward its electrification strategies through 2025, it has not yet announced clear long-term targets. The company has said that it would begin electrifying its most iconic products, such as the Mustang. This new e-version of Ford’s flagship model is already in production in Mexico, along with the F-150 and Ford Transit.

Stellantis: Intensified Electrification

The fourth-largest auto group, created earlier this year after the merger between PSA and FCA, has set a different path for each of its brands, including Alfa Romeo, Chrysler, Citroên, Dodge, DS Automobiles, Fiat, Jeep, Lancia, Maserati, Peugeot and Ram. The group unveiled the first steps of its strategy early in July. Overall, electrified vehicles, including light trucks, are expected to represent more than 40 percent of Stellantis’ sales by 2030 in the US, supported also by an expected decrease of 40 percent in battery costs between 2020 and 2024, plus an additional 20 percent by 2030.

Stellantis is also the only automaker setting a clear goal for total cost of vehicle ownership, setting 2026 as the year in which "total cost of ownership of EVs will be equivalent to that of ICE vehicles." This is an important point, says Manuel Montoya, president of the Global Cluster Network. “If the battery technology is not sufficiently advanced to provide a similar cost to an ICE vehicle, EV will remain a niche market.”

Volkswagen Group: Zero Emission Future

Although the Volkswagen Group encompasses several brands in the light- and heavy-vehicle segment, the Volkswagen and Audi brands have presented clearer targets toward electrification. The group expects the ICE market to decline by more than 20 percent over the next 10 years, while BEVs are expected to rise by 50 percent. The group expects that by 2040, nearly 100 percent of all new vehicles in major markets should be zero-emission.

Volkswagen brand will have Europe, China and North America as its primary focus. In North America and China, the share of EV sales is set to be at least 50 percent by 2030. Meanwhile, Audi is set to electrify its entire model range by 2025.

"Electric mobility is also a must for Volkswagen and we are advancing quickly. We launched the electric SUV ID.4 in the US, for example. But EVs do not arrive alone; they do so hand-in-hand with the sufficient infrastructure for safe and trustworthy mobility, which requires significant investment from both the public and private sectors," says Edgar Estrada, Volkswagen Brand Managing Director.

BMW Group: New Era, New Class

The German automaker, home to BMW, MINI and Rolls Royce, earlier in the year announced its strategy for "A New Era, a New Class.” The company detailed how the three brands will contribute to the future of mobility and introduced some of the clearest targets for the luxury segments. As soon as 2023, 90 percent of all of the group’s vehicles in different market segments will have an electrified option. Two years later, by the end of 2025, deliveries of fully electric models will grow by over 50 percent annually on average and the brand expects to have delivered around 2 million fully electric vehicles. By 2025, the group will also have a fully electric vehicle for all market segments in which it participates, while in some segments, brands will solely focus on electric models. By 2030, the MINI brand will become fully electric, while half of the group’s deliveries will be fully electric.

Toyota: Leadership in Electrified Models

Toyota is perhaps the automaker with the greatest share of sales coming from electrified vehicles. Just in Mexico, the company has reported that more than 20 percent of its sales come from these vehicles. The company’s performance is reflected in its ambitious targets. By 2025, the company will have 70 electrified models, including 15 BEVs. In North America, Toyota expects electrified vehicles to represent 70 percent of its sales by 2030, the majority of which are expected to be hybrids. Notably, BEVs and FCEVs combined will make up 15 percent of the company’s total sales by 2030.

The Japanese giant is betting on a wide range of electrified powertrains with a portfolio that features all four EV technologies. Lozano says Toyota believes it should offer different electric options to customers. “Toyota now has four electrified vehicles. First, there is the hybrid-electric vehicle (HEV). It is now in its third generation and serves markets that may lack charging infrastructure, such as Mexico. We also have a plug-in hybrid (P-HEV) similar to the regular hybrid, which can be more efficient in reducing emissions. We have a battery-electric vehicle (BEV), which is the most popular in the media but will not necessarily dominate global markets. Finally, our Mirai model introduces a hydrogen-based fuel-cell electric vehicle to the market." 

Honda and Mazda

Japan’s Honda and Mazda have also set electrification targets. Honda expects that by 2040, 100 percent of its sales will come from electric vehicles and fuel-cell vehicles. Major milestones should be reached in 2030, with EVs and FCVs representing 40 percent of its sales and 80 percent by 2035. The goals are driven by Honda's major markets, including North America and China.

For its part, Mazda set its electrification goals early in 2020. By 2030 the brand will equip all of its models with "some form of electrification technology.” ICE vehicles combined with electrification technologies will represent 95 percent of the vehicles produced by the company and BEVs will account for the remaining 5 percent.

Nissan

Japanese automaker Nissan, the leading brand in Mexico, has presented the vaguest of all of long-term goals. However, that does not undermine the brands' strong electrification efforts and innovations, such as its ePower technology, a special type of non-plug-in hybrid vehicle. Nissan expects 100 percent of "all-new vehicle platforms" will be electrified in Japan, China, the US and Europe by the early 2030s.

José Román, President of Nissan Mexicana and NIBU, says that electrification will arrive differently, depending on the market. "There are two different markets for electrified vehicles. In developed markets, such as the EU or the US, electrification will advance rapidly. Fully electric vehicles are a reality for them, while vehicle autonomy continues to increase. In emerging markets, electrification will arrive in a different way. We have the technology and there is a clear need for these kinds of vehicles but governments are not ready to massively invest in electrification," he says.

Hyundai Motor Group

The South Korean holding Hyundai Motor Group, featuring Hyundai and Kia, has introduced a full EV brand called Genesys that is focused on fully BEV electric models. The group is also betting strongly on FCEVs. Regarding the Hyundai brand, the group plans to sell 560,000 EVs per year by 2025, which is half of what the Mexican market expects to sell this year. As for Kia, the brand revealed its first steps toward electrification, targeting 25 percent of global vehicle sales from BEVs.

Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst