The decision to scrap hybrids – which have a gasoline engine and an electric motor – is a gutsy move on the part of the two automakers, especially when everyone else is depending on hybrids as a way to enable compliance with fuel consumption and emissions standards.
Electric vehicles will account for $225 billion in spending by all automakers through 2023, Alix Partners, a global consulting firm, estimated.
At the same time, the move is also a clear sign that it’s important to get to fully electric vehicles sooner – rather than later. “If I had a dollar more to invest, would I spend it on a hybrid? Or would I spend it on the answer that we all know is going to happen, and get there faster and better than anybody else?” GM President Mark Reuss said in an interview, according to the International Business Times.
For General Motors, this means the company will focus on its plans to launch 20 all-electric vehicles globally over the next four years, including plug-in models in the U.S. Volkswagen has also committed millions to producing more battery-powered models, including the introduction of a small plug-in SUV in the U.S. next year and an electric version of its minibus around 2022.
China is a growing market for EVs and both GM and Volkswagen want in on the market. However, automakers need to comply with a specific number of zero-emissions vehicles allowed in the country to avoid monetary penalties, and this is another good reason to focus on EVs.
“Our strong preference is to go all-in where the market is heading, as opposed to hybrids as a way to hedge our bets,” Scott Keogh, VW’s U.S. chief told The Wall Street Journal.
