Market churn and vehicle costs are making a big difference on program launches

By Gary S. Vasilash

Pity the product planner.

Pity the consumers of vehicles near the end of the decade.

The first is one of the things that John Murphy, senior U.S. Auto Analyst for Bank of America Securities, in effect, said at an Automotive Press Association meeting held yesterday in a BoA facility in Farmington Hills, Michigan.

Or, in Murphy’s words, “The unprecedented EV head-fake over the last three years has wreaked havoc on product planning. The prior acceleration in EV launches is doing a U-turn in favor of extending ICE programs and new hybrids. However, while there is a lot of talk about hybrids, there isn’t much action. The next four+ years will be some of the most uncertain and volatile in product strategy ever.”

So while it wasn’t all that long ago that people talked about how EVs had it the “tipping point” and henceforth they would be the powertrain of choice, comparative consumer indifference has led to a reconsideration of what had thought to be fait accompli.

Pity the product planner who has to explain why what was to be a winner is just doing OK—at best.

As part of the BoA Car Wars proprietary analysis, which Murphy has been working on, it is determined that looking ahead—from model years 2025 to 2028—the rate of alternative powertrain launches—which includes hybrids—is being trimmed back a bit, with what had thought to be 79 launches in MY 2025-26 being reduced by one and launches in MY 2027-28 being down from 123 to 112.

Remember: there only seemed to be upside in that space not all that long ago.

Enjoy your opulent interior while it is still there

As for the consumers: Murphy explained that Tesla has figured out how to build cost-effective EVs in a way that the traditional OEMs haven’t. Unless the traditional can design and engineer vehicles that are just as cost effective, then while they will eat into Telsa’s market share, they won’t impact Tesla’s profitability.

Murphy said the place where the traditionals really need to focus their cost-cutting efforts are on things like the structure of the vehicle and the creature comforts (or lack thereof).

Consider: you’re unlikely to hear someone tout the comfortable cabin experience in a Tesla, but there have been plenty of thumbs-up for the interior of the Cadillac Lyriq.

But if Cadillac really wants to compete with Tesla, then that interior needs some significant change—which may not be beneficial so far as the customer is concerned.

What does Murphy recommend the traditional domestic OEMs do while they try to figure out how to get those costs out of EVs?

Go to where the money is.

Concentrate on pickup trucks with internal combustion engines.

In order to get change, thing evidently also have to stay the same.

Yes, Murphy said, the trend is still going EV. But not quite as rapidly as seemed to be the case.