Roughly three months ago, I wrote a commentary that it was time for GM’s CEO to retire. If you missed that one, click here:
Car Pro Commentary: It's Time For GM's CEO to Retire →
In the commentary, I talked about how GM went “all-in” on electric vehicles without listening to their customers. I also pointed out the success that Toyota and Honda have had by concentrating on fuel-efficient hybrids and both automakers are enjoying tremendous success. In particular, Honda is on fire, but there are plenty of others, like Kia and Hyundai also selling all the hybrids they can build.
The Light Finally Appears To Have Gone On
So, finally General Motors is taking another look at the technology it largely passed over while betting heavily on electric vehicles. With higher gasoline prices helping drive demand for hybrids, CEO Mary Barra says gas-electric models will join GM’s lineup in multiple vehicle segments.
According to Bloomberg’s Chester Dawson, Barra confirmed the plans during GM’s Oct. 20 earnings conference call. “We will have hybrids,” she told analysts. “We’ll talk more about them as we get closer to the launch.” That establishes the direction, but shoppers will have to wait for the details. GM has not announced which U.S. models will get hybrid powertrains, their prices or firm arrival dates.
Bloomberg reported that GM’s renewed interest comes after years of emphasizing conventional gasoline vehicles, diesels and fully electric models while largely sitting out the growing U.S. hybrid market. The company already offers some hybrids in China and has previously sold them in the United States, so this is familiar technology. The change is in how prominently it could figure in GM’s American product plans.
As recently as January, Barra told Bloomberg Television that GM understood hybrid technology and had it available in other regions, but its focus remained on having the right internal combustion and electric vehicle portfolios. Bloomberg reported that she referred then to offering only a handful of hybrids. Her latest comments suggest a broader role across the segments where GM competes.
GM’s chief financial officer, Paul Jacobson, acknowledged the competitive pressure in an Oct. 20 CNBC interview, according to Bloomberg. He said the success of manufacturers offering hybrids was difficult to ignore and that GM was adapting to both hybrid growth and an evolving regulatory environment.
The sales numbers help explain why the subject keeps coming up. Toyota Motor North America reported third-quarter electrified vehicle sales of 363,367, up 28.5% from a year earlier and representing 57.4% of its total U.S. volume. Toyota’s electrified category includes conventional hybrids, plug-in hybrids, battery-electric vehicles and fuel-cell vehicles, so those figures should not be mistaken for conventional hybrid sales alone. Nevertheless, they illustrate how large a role electrified powertrains now play in a major competitor’s business.
GM, meanwhile, reported third-quarter U.S. sales of 670,974 vehicles, down 6%. The company attributed that decline to a smaller electric vehicle market and discontinued vehicles, while saying sales of its highest-volume products remained strong. Its affordable small SUVs, led by the Chevrolet Trax and Buick Envista, delivered their best quarterly sales ever. The results show a company with successful products, even as its overall volume slipped.
Barra also defended the strength of GM’s existing lineup during the earnings call. According to a transcript published by Stock Analysis, she said production of the Chevrolet Equinox compact SUV was already at capacity without a hybrid version. She also indicated the planned hybrids were already incorporated into GM’s plans and would not require additional capital spending and engineering beyond those plans. That does not mean developing hybrids is free; it means she was not announcing an extra spending requirement on top of the company’s existing program.
For consumers, the appeal of a conventional hybrid is easy to understand. It combines a gasoline engine with an electric motor and battery, improving efficiency while retaining familiar gas-station refueling. It does not require plugging in. A plug-in hybrid adds a larger rechargeable battery that allows some driving on electricity before gasoline power is needed. Those differences matter, and buyers will need to know which approach GM chooses for each future model.
From a car-shopping standpoint, this could fill an obvious opening in GM’s lineup. Someone who wants better fuel economy but is not ready for an all-electric vehicle can already find numerous hybrid choices elsewhere. Adding competitive hybrids would give participating GM dealers another way to keep those customers shopping within the family.
Of course, there is considerable distance between announcing a strategy and parking a vehicle on a dealer’s lot. Until GM provides model names, fuel-economy ratings, prices and launch dates, shoppers should treat this as a confirmed direction rather than a reason to expect an immediate arrival.
GM sees a place for hybrids after spending years giving other powertrains priority. Buyers have been voting with their wallets, and gasoline prices have a way of making those votes considerably louder.
The question is: By the time GM hybrids go on sale in America, will the hybrid-craze be over?