Tesla? Nissan? Credit Policymakers for New EV Boom

Success has many fathers, and so too does today’s electric vehicle.

For proof look no further than the barrage of EV debuts at the Paris auto show that is drawing some self-congratulatory back-patting from a few of the pioneers.

Among unveilings at the late-September Paris salon was the ID concept CUV targeted for launch in 2020, the first of 30 new electric models Volkswagen plans to unleash by 2025. It debuted alongside the new battery-powered Mercedes Generation EQ CUV, one of 10 new electrics to come from the German automaker’s new EQ sub-brand beginning in 2019.

Also at the show were new entries from Opel, Renault and Citroen, which join a number of previously announced EVs on the way from Audi, Porsche and others.

All that EV clamor had Renault-Nissan CEO Carlos Ghosn crowing about his competitors eating crow.

“I am very glad today the same people who mocked us are the same people who say, ‘We have five (EVs) coming in the next five years,’” Ghosn tells reporters at the Paris show.

Tesla also wants to claim credit for cajoling the industry toward EVs.

Speaking in Michigan at the World Mobility Leadership forum, Tesla’s Diarmuid O’Connell, vice president-business development, says the industry is showing signs of moving further along the “Gandhi” curve.

“Part of our mission is to essentially de-risk the electric-vehicle category and attract others into it,” O’Connell says. “And that’s starting to happen. I feel like we’re going through the Gandhi curve here: First they ignore you, then they ridicule you, then they fight you and then we – and I mean we as a society – win.

“(The Paris debuts suggest) we may be in that third phase,” he adds. “And, frankly, that’s the fight we wanted. If there have been any disappointments along the way it is that we haven’t succeeded in inciting other competitors into this space as quickly as we hoped.”

Kudos to Tesla for making its patents public and even more so for showing the industry how to build brand from scratch, but policymakers really deserve the lion’s share of the credit for the recent flood of EV activity.

Automakers wouldn’t be rushing into the sector without carrot-and-stick mandates from governments around the world. There’s a reason Norway and the Netherlands, two of the tiniest markets for new-vehicle sales, are leaders in putting EVs on the road – and it’s not the EV business case.

Demand remains infinitesimal for battery-electrics. Less than 55,000 have been sold in the U.S. this year, accounting for just 0.4% of the market, according to WardsAuto data. It’s a similar story worldwide.

And profitability? Not even close.

The industry may covet Tesla’s brand image, and it even may be a little jealous of its retail model centered on company-owned stores, but it certainly isn’t envying its cash flow.

Go ahead and applaud Renault-Nissan for furthering the EV cause as well. It now accounts for about half the EVs sold worldwide. But it was the prospect of toughening carbon-dioxide emissions limits and fuel-economy bogeys that persuaded Renault-Nissan to get out ahead of the curve.

Ghosn said as much at the Detroit auto show in January, noting consumers won’t buy EVs in big numbers unless public policy steers them in that direction.

“Our industry isn’t driven only by what the consumer wants,” he said, advising his recalcitrant competitors to get with the program. “It’s also driven by what… the government signals as to where we are heading. Zero emissions is what many governments want to see happen.

“I agree it’s not going to be an easy shift, but I don’t see how we’re going to escape it.”

A case in point is China. With the world’s No.1 automotive market now hiking incentives on EVs and pushing policy to promote their sale, continued resistance may be futile.

Perhaps the one automaker worth acknowledging for the suddenly accelerating battery-electric movement is Volkswagen. Its emissions-cheating scandal may have put a fork in diesel engines and finally convinced European lawmakers and fence-sitting manufacturers it’s time to commit to EVs.

A study by AlixPartners predicts diesel-vehicle sales in Europe will slide from 50% of the market today to as low as 9% in 2030.

So, all involved take a bow.

“Things are changing,” notes O’Connell. “And that’s the great news; that the industry is now industrializing around this product.”

[email protected] @DavidZoia