Why gas-powered vehicles aren't going away yet
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Illustration: Aïda Amer/Axios
Gas- and diesel-powered vehicles aren't going down without a fight.
Why it matters: As the presidential candidates engage in a political debate over electric vehicles, the two biggest American automakers are going big on old-school trucks.
Between the lines: Ford said Thursday that it will invest $3 billion to ramp up production of heavy-duty F-series pickups — including at a Canadian plant that was previously poised for a transformation into an EV powerhouse.
- Separately, General Motors revealed the 2025 Cadillac Escalade, a full-size SUV that will include an optional 6.2-liter, 8-cylinder, 682-horsepower engine.
The big picture: The EV revolution has slowed in 2024 amid lingering concerns about prices and charging availability
- EV sales represented 8% of U.S. vehicle sales in the second quarter, a new high but up only 0.8 points from a year earlier, according to Cox Automotive.
Friction point: Big, gas- and diesel-powered trucks and SUVs are footing the bill for the development of EVs.
- They cost less to make than EVs, yielding better margins.
- Of the top 10 best-selling models in the U.S., five are traditional pickups, and two are old-school SUVs, according to car research site Edmunds.
- The only two EVs on the list are the Tesla Model Y crossover and Tesla Model 3 sedan.
The intrigue: Ford CEO Jim Farley has become a more vocal proponent of hybrids as a stepping stone to EVs after years of auto executives pledging a swift transition to EVs.
- He recently told CNBC that "big, huge, enormous EVs" ... are "never going to make money. The battery is $50,000. … The batteries will never be affordable."
- The battery costs alone are too much for large vehicles, he said.
Yes, but: The automakers are still offering EV versions of some of their largest vehicles.
- Ford sells the F-150 Lightning, an EV version of the most popular vehicle in the U.S., though sales trailed the new Tesla Cybertruck in May.
- Even the Escalade comes in an EV version, the Escalade IQ.
The bottom line: Models like the Escalade — with an expected starting price of about $85,000 — are profit beasts, and that's not changing anytime soon.
Disclosure: Cox Automotive is owned by Cox Enterprises, which also owns Axios.
