In a January 24, 2018, interview from the week of the 2018 North American International Auto Show (NAIAS), Paul W. Smith of WJR Radio in Detroit asked Keith Crane, editor-in-chief of Automotive News, about his view of the global automotive future. “Manufacturers are betting billions on electric drive vehicles that people don’t want,” Crane said, without hesitation.

Billions Indeed.

Organizations following the design and production intentions of global automotive manufacturers are estimating that $90 billion is being invested to develop electric drive platforms. Companies in the United States have earmarked $19 billion of that total with Ford leading the pack, dedicating $11 billion to develop both hybrid and fully electric vehicles by 2022.

“We’re all in on this and we’re taking our mainstream vehicles, our most iconic vehicles, and we’re electrifying them,” Bill Ford Jr., executive chairman of Ford Motor Company, said in an NAIAS interview, nothing that 40 vehicles in the company’s model line up with be electrified, with 11 full-battery electric vehicles.

Ford’s use of the term “most iconic vehicles” suggests that both the Mustang and the Ford 150 pickup will be go hybrid or entirely electric. According to industry talk, Ford increased the number of employees dedicated to electric and autonomous vehicle development from 70 in 2014 to more than 1,500 at the end of 2017.

California will help drive demand for electric vehicles in the U.S. In his final year in office, Governor Jerry Brown introduced an executive order mandating that the state deploy 5 million zero-emission vehicles by 2030. The plan, if successful, would mean that by 2030, more than 40 percent of new cars sold will be electric.

It Won’t Be Cheap.

California will invest $2.5 billion to increase the number of charging stations from 14,000 today to more than 250,000 in 2025. In that same time period, high-speed charging stations will increase from 1,500 to 10,000 and hydrogen filling stations from 31 to more than 200. Approximately $1.6 billion of the allocated funding in Brown’s plan will come from the state’s cap-and-trade auctions to fund vehicle rebates. A $2 fee on vehicle registrations will generate the other $900 billion. Automobile manufacturers need to watch California’s plans carefully, as more than 12 percent of all vehicles in the U.S. are sold in the state, according to the National Auto Dealers Association.

China’s automotive community is investing $21 billion in electric drive development to meet mandates from the Chinese government that call for 8 percent of all vehicles sold in China in 2020 to be electric drive. According to the GreenCarReports, 777,000 electric drive vehicles were sold in China in 2017, a 53 percent increase over 2016 volume. That represents 2.7 percent of the 28.9 million cars sold last year. As a reference point, total U.S. car sales were about 17.2 million in 2017, and 200,000 of them were electric drive.

China’s 2020 mandate will be managed much like Corporate Average Fuel Economy (CAFE) regulations in the U.S., with one twist – auto manufacturers will earn credits to sell their full range of vehicles, some of which are internal combustion vehicles, but they must also meet electric vehicle production percentage quotas. From 3 to 4 percent of sales must be electric vehicles by 2020, but to meet the fuel consumption mandate, estimates show that 7 to 8 percent electric vehicles may be needed. Two to 3 million electric vehicles will need to be sold in 2020 (up from 777,000 in 2017) to meet the 8 percent figure, and non-Chinese companies like Daimler, BMW, VW, Audi, GM and Ford will be competing with more than 25 Chinese manufacturers for share of that market. Those manufacturers also have designs on markets outside China. At NAIAS this year, several Chinese brands were openly soliciting North American dealer organizations to develop distribution channels in the U.S. for their electric vehicles.

Government mandates in China have led to overproduction of products such as steel, tires and appliances in the past, and some are concerned that having 25 Chinese automakers chase the 8 percent electric vehicle mandate will have a negative effects on the global prices of electric vehicles, which automakers cannot afford.

“I don’t know of a person or an entity that is making money on selling electric vehicles, unless you are selling them at the very high end of the spectrum,” said Sergio Marchionne, CEO of Fiat Chrysler Automobiles, during an NAIAS press event. “That’s rare anyway. If you are talking about basic means of transportation, they are not profitable. Whenever we go to auto shows, the intensity with which we make these proclamations goes up exponentially.”

Marchionne has been a consistent naysayer on electric vehicles but has quietly committed FCA funds to producing hybrid versions of the company’s popular Jeep Wrangler and Dodge Ram platforms.

European companies will spend the balance of the $90 billion electric vehicle investment with the vast majority invested by German automakers Daimler, BMW, Audi and Volkswagen. VW, fresh off their diesel-gate woes, stated in a November 2017 press announcement that its board had approved a $40 billion investment in electric drive by 2022. “With the planning round now approved, we are laying the foundation for making Volkswagen the world’s No. 1 player in electric mobility by 2025,” CEO Matthias Mueller said during VW’s press event.

Daimler Benz and BMW are also aggressively converting models to electric drive and are openly challenging Tesla for leadership in the premium end of electric vehicle sales.

There were all kinds of other announcements at NAIAS 2018, of course, but what was most impressive was the turn of the industry away from passenger cars and toward SUVs and light trucks.

• Ford is bringing back the Ranger pickup and investing heavily in Michigan plants to produce it.
• FCA announced that it will release a version of the 2019 Dodge Ram that includes a 48-volt battery for a motor generator that can provide stop/start, braking regeneration and increased torque.
• Arnold Schwarzenegger helped introduce an all-new version of the Mercedes-Benz G-Wagen.
• Other SUV introductions included the Lexus LF-1, Acura RDX, BMW X2 and X7 and, in perhaps the best example of Japanese engineers pushing the envelope, the Nissan Xmotion (bring back the suicide door!).