When will electrification become profitable without tax credits?
Millions of plug-ins need to be sold every year to become sustainable
How many tax credits will it take to make plug-in vehicles a sustainable and profitable business for automakers? That was a focal point at the recent Fortune Brainstorm Green conference.
While the answer to that question depends on which automaker is asked, automakers will, minimally, have to sell far more plug-in vehicles per year than even Toyota sells hybrid cars per year today – FAR more.
Ford’s top electrification guru Nancy Gioia claims that Ford will need to sell at least 1 million plug-in vehicles per year to achieve profitable sustainability. Nissan believes the number is more like 500,000, while high end luxury makers such as Fisker believe just 100,000 sales per year will do.
Inevitably, the key problem holding back plug-in profitability is “substantial” battery costs. However, even if these numbers are achieved, plug-ins will probably still be less profitable than other vehicles according to Henrik Fisker, CEO of Fisker automotive.
Considering that US automakers, for instance, have perpetually chosen the most profitable vehicles as their focus, do plug-ins have any chance – even with tax credits – of achieving sustainable profitability without a major battery breakthrough?
Source: CNNMoney