May 31, 2019

The future of big electrics

The Rivian SUV. Photo: Michael Brochstein/SOPA/LightRocket/Getty

When it comes to personal vehicles, Americans are pretty clear what they like — something large, muscular and gasoline-driven. Sedans were fewer than one-third of U.S. vehicles sold last year, and electrics just 2%.

Why it matters: Carmakers are betting that in the coming years, Americans will go electric in a big way. And behind that gamble are different electrics from those that consumers have been offered so far. Specifically, electric pickup trucks and SUVs.

The big picture: For the last few years, electric cars have been one of the buzziest tech items on the market, propelled almost single-handedly by the showmanship and design of Elon Musk's Tesla Motors. But Tesla, Ford, BMW and GM have offered up almost exclusively sedans, with the Tesla Model X SUV being the exception.

  • That has been a big mistake. Speaking with Axios, Morgan Stanley's Adam Jonas said the currently struggling Musk had "definitely" erred by first launching his mass-market Model 3 sedan, rather than the future Model Y crossover.
  • Tesla did not respond to an email.

Now, though, Musk and a crowd of other carmakers — Ford, VW, Volvo and a startup called Rivian — are on the verge of releasing a slew of SUVs, crossovers and electric pickup trucks.

Rivian is attracting a lot of the attention. Over the last three months, Amazon led a $700 million round of investment in the company, and Ford made a $500 million investment in it.

  • Late next year, Rivian says, it will start selling a $69,000 R1T pickup and a $72,500 R1S SUV, both capable of driving 400 miles on a single charge and going 0 to 60 in 3 seconds.
  • Ford said it will develop an electric vehicle with Rivian; and for Amazon, the investment is about building a vehicle using the Rivian chassis for last-mile delivery of its packages.
  • "Millions of people are buying pickup trucks for their daily driving. People like the image that comes with a pickup truck," Michael McHale, Rivian's director of communications, told Axios today.

The numbers back up this bet. For the first 3 months of 2019, 7 of the top-10 best-selling vehicles in the U.S., and 19 of the top 25, were either a pickup truck, an SUV or a jeep.

  • This is the 43rd straight year in which the Ford F-150 pickup is the most popular vehicle in the U.S.
  • Now, Ford says it will make an electric version of the truck. It has not said when, but prototypes have been photographed in Dearborn, Michigan.

For two reasons, few have been able to imagine an electric pickup. The batteries would be too heavy and expensive, and, it was believed, very few hard-core truck enthusiasts would be seen in a quiet, sissy electric.

  • Now that battery costs have plunged, pickups "should hit primetime over the next couple of years," says Venkat Viswanathan, a professor at Carnegie Mellon.
  • In my travels and speeches, when I am in pickup country, I often ask the audience whether anyone would own an electric F-150. What I get back is a mystified shrug and, "Why not?"

The bottom line: These bigger electrics will come onto the market gradually, but within 5 years, electric pickups and SUVs will be an intensely competitive market.

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