DETROIT—For all of its other achievements in business, Honda Motor Co. holds one distinction that no longer has quite the pizazz it once did: Honda is, by its own reckoning, the world's largest producer of internal combustion engines.
Which made it all the more stunning last month when the Tokyo auto maker announced that by 2040, all of its cars and light trucks will be electric.
Honda, which also produces motorcycles, lawnmowers, power generators and airplanes, is joining a small group of auto brands that are going all-in on electric power. Honda, including Acura, joined Cadillac, Ford of Europe, Jaguar, Mini and Volvo in declaring intentions to sell electric vehicles only, taking a plunge into a future that many people today find alluring, but which still has others scratching their heads, wondering how it will all be possible.
Where will all the batteries come from? Where will battery-makers obtain enough lithium and other minerals from to make them? Will there be enough charging stations? And will EV owners be able to drive 450 miles on a dark, cold November night to see Grandma for Thanksgiving?
To a growing number of auto makers, those worries are simply details to be ironed out as the new market emerges.
To be sure, all global auto makers are developing EV portfolios. Tesla has been all-EV since it launched, and now it has a crop of startup followers, including Lucid Motors, Rivian and Nio. At the same time, industry goliaths everywhere are promoting plans to devote at least some of their global portfolios to EVs, including Volkswagen, Hyundai Motor Group, Mercedes-Benz, Stellantis, Nissan and Toyota.
"We can see where customer demand is going," Ford of Europe President Stuart Rowley told Automotive News Europe in March, shortly after the company announced its plans. "We want to put our capital in the growing parts of the market."
Electrification is unquestionably the industry game-changer of this decade. Even manufacturers that earn their daily bread from hardcore internal combustion engine parts are feeling the carpet move beneath their feet.
"Electrification is not only here today, it's accelerating in regards to the adoption rate," said David Dauch, CEO of American Axle & Manufacturing Inc. Dauch's company had $4.71 billion in sales last year from primarily axles, driveshafts and propulsion products. This month, American Axle accelerated its own shift to EVs with the announcement of a partnership with the Israeli technology company REE Automotive to jointly develop an electric propulsion system for battery-powered vehicles.
"I recognize we all need to be environmentally conscious, and we are, I think," Dauch said during an Automotive News Congress Conversations webcast this month. And even though efficiency gains can still be made on the internal combustion engine, he added, "I'm also not fighting electrification. I think we need to bring the future faster."
Consensus, anyone?
IHS Markit has endorsed that idea. In an April report on the outlook for battery-electric and plug-in hybrid vehicle acceptance vs. internal combustion engines, or ICEs, the forecaster concluded that EV "driving ranges continue to improve, and in most cases, are virtually no longer a restriction for consumers. Customers are used to a range provided by an ICE that is far beyond their requirements in most daily use cases. The last decade has brought significant cost reductions alongside lithium-ion battery technology advancements, and the next decade is expected to bring significant range improvements as solid-state batteries become the norm. As a result, IHS Markit believes that the 'range anxiety' problem will be solved by 2030."
The report projected that the cost of manufacturing an EV will reach parity with that of combustion engine vehicles in 2027.
But is there anything close to an industry consensus about which way to move or how fast to do it?
Hardly.
A common mantra across brands everywhere is that "The internal combustion engine will remain with us for many years to come."
The most recent spin of that reassurance came from Akio Toyoda, president of Toyota Motor Corp., one of the world's largest auto makers and a company that so far has been slow to embrace EVs as a full-on strategy. At a press conference last month to address a proposal in Japan to ban internal combustion engine vehicles by 2030, Toyoda warned that new technology should first be developed before there are attempts to restrict gasoline engines.
"What Japan should do first is to add to technological options," Toyoda said. "I think setting regulations and introducing legislation come next. A policy on first banning gasoline and diesel cars would only limit such options, which would in turn lead to a loss of Japan's strengths. That's why I am asking for the understanding of policy makers not to get the order of priority wrong."
Toyota said last month that it plans to introduce 15 electric models and a subbrand called Beyond Zero. But executives argue that more can done for the environment faster through hybrids than strict conformity to battery-powered autos.
Some auto makers are making more limited moves toward EVs — perhaps not convinced of the strategy or maybe simply lacking the deep pockets and operating scale to pay for the radical transition.
'Not sure'
Subaru Corp. is a case in point.
The Japanese champion of all-wheel-drive crossovers has been a steady market share climber in the U.S. for the past decade, earning a clubby following for its Outbacks and Foresters. But on the global stage, Subaru remains a relatively minor player, with just two assembly plants worldwide and little by way of a treasure chest to pay for advanced technology development.
Subaru is now promising that an electric crossover is coming through its pipeline. But Subaru is depending on Toyota—an investor and strategic partner—to develop it.
Subaru CEO Tomomi Nakamura told Automotive News at the end of last year that the EV is being created as a compliance car to meet California emissions regulations.
"For the U.S. market, we're not sure how rapidly the EV market will grow. ... We wanted to minimize our investment because we're not sure how much profit this project is going to make," he said.
But even among the most ambitious six auto makers now proposing a complete changeover in propulsion technology, there is not universal zeal.
While General Motors has laid out a path to an all-electric Cadillac brand by 2030, its further aspiration for all of its brands to be electric-only by 2035 is conditioned on the market being ready to leave behind gasoline-powered pickups, SUVs and large crossovers.
And at Jaguar, it remains unclear whether the company will develop its planned EV platform in-house or turn to others for the work.
Either way, as gung-ho as Jaguar is to move fully into EVs, its utility vehicle sister brand plans to follow a different path: Land Rover will keep internal combustion engines in its biggest and most profitable vehicles well into the next decade.
