GM, VW Pivot from Hybrids to All-Electric Cars

General Motors and Volkswagen are phasing out work on future hybrid vehicles and going all-in on fully electric cars, says The Wall Street Journal.

Carmakers in general agree that hybrids are a stepping stone to the eventual dominance of all-electric powertrains. But the Journal says GM and VW have been particularly aggressive about pushing the changeover.

“If had a dollar more to invest, would I spend it on a hybrid?” GM President Mark Reuss asks the newspaper. “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?”

Scott Keogh, who heads VW operations in the U.S., concurs. He tells the Journal that VW’s strong preference is to “go all-in where the market is heading, as opposed to hybrids as a way to hedge our bets.”

Morgan Stanley auto analyst Adam Jonas at Morgan Stanley also agrees. “It’s time,” he declares, “to pick a path and commit to it.”

Many other carmakers, led by Toyota and Ford, see it differently. They predict years of sales growth ahead for hybrids and don’t want to force consumers who are skeptical about electrification into considering vehicles they don’t really want.

But the cost of pursuing both technologies simultaneously is huge. Consultants AlixPartners estimate that the global auto industry will spend $225 billion through 2023 on plug-in hybrids alone.

EVs have simpler powertrains. But they also cost consumers significantly more, mainly because of the large batteries required to give EVs sufficient range. Proponents of hybrids believe their strategy will better fit the pace of consumer acceptance of electrification.