Mazda’s Electrification Plan Insists On Big ICE Role.
“Electric cars are cool, but they are still profit killers, at least for most manufacturers”
As European automakers bow to the politicians and seek to rid themselves of carbon dioxide (CO2) spewing internal combustion engines (ICE), at least in their home markets, Mazda is doing its best to retain much of its traditional engineering while addressing the need for electrification and seeking more exotic solutions with the help of hydrogen and biofuel.
Mazda, with maybe a nudge from its partner the mighty Toyota which is also following a grudging embrace of battery electric vehicles (BEV) or a perceptive wait-and-see how the cookie-crumbles, according to your opinion, detailed its future product plans at an event in Glasgow, Scotland to launch a facelifted CX-5 SUV.
Mazda said it wants to plow its own furrow and build up its electric car portfolio but without trashing its ICE engineering prowess built up over many years. Nevertheless,
“We are about to embark on a fundamental shift in our product portfolio,” said Mazda UK managing director Jeremy Thomson.
The European Union has set tough CO2 emission rules which virtually dictate that most new cars built by 2030 are BEV. Britain has already banned the sale of new ICE sedans and SUVs by 2030. These vigorous attempts to force electric cars on Europeans are coming under pressure as eye-wateringly big increases in domestic energy prices aggravate voters. But there’s no concrete sign yet the plans could be reversed. Green lobby groups like Brussls-based Transport & Environment want the CO2 rules to tightened further.
Meanwhile, Mazda plans to have 25% of its global product line as full BEV compared with VW’s 70% target in Europe by 2030. Mazda says ICE will still power most of its cars by 2030, but all models will have some form of electrification. Mazda plans more hybrids, plug-in hybrids (PHEV) and all-electric cars, but it also wants to improve ICE engineering in a slow but sure transition to all-electric. It wants ICE vehicles to contribute to the drive for CO2 reduction. Mazda also sees a role for hydrogen, renewable fuels, and next-generation bio-diesel.
CX-60 comes next
Mazda’s next important product unveiling in Europe is the 2.5 liter CX-60 PHEV in early March, which could be related to another Toyota partner Suzuki, whose Across PHEV has a class-leading almost 50 miles of electric-only range (see my story).
Toyota has a 5.1% stake in Mazda. The companies produce cars for both brands in Huntsville, Alabama, while Toyota makes Yaris city cars badged Mazda 2 in Europe
After the CX-60 PHEV comes the CX-70, CX-80 and CX-90 which will be a mix of BEV, PHEV, mild hybrid, regular hybrid and ICE. The MX-30 electric car, much admired for its looks and build quality but seriously range-inhibited (link to my story) is getting a rotary engine-powered range extender. Mazda stuck with rotary engines when every other manufacturer lost interest.
Mazda has kept a steady market share in Europe, moving from 1.22% in 2000, gradually up to 1.61% in 2018, and 1.32% in 2021, according to JATO Dynamics data. Europe accounts for about 12% of Mazda’s global sales. Last year in Western Europe, which includes all the big markets like Germany, France, Britain, Spain and Italy, Mazda’s market share was 1.3%, with sales up 2.5% at 122,000, the European Automotive Manufacturers Association said.
Felipe Munoz, global automotive analyst at JATO Dynamics, said Mazda’s plans are risky in Europe, but less so globally. He said Mazda, as a small efficient, independent Japanese brand has survived despite relatively low sales of between 1.2 and 1.5 million because of its consistent focus on few products and markets
“As a Japanese brand, full electrification is a sensitive topic. Its ties with Toyota mean that producing only electric cars won’t be a reality as it is the plan for many European makes. Toyota’s global success with the hybrids is a referent in Japan, and an example for the rest of the Japanese (manufacturers). They don’t see why everything has to be electric, when you can improve the current technology,” Munoz said.
“It is actually an interesting approach because there’s room for improvement of the ICE. If it wasn’t because of the increasing regulation in Europe (in the rest of the world it won’t be that hard to sell ICE), it would make even more sense. Electric cars are cool, but they are still profit killers, at least for the majority of (manufacturers),” he said.
Dr. Kelly Senecal, co-author of the book Racing Toward Zero: the Untold Story of Driving Green, agrees the single-minded drive to force BEVs on to the market and the exclusion of ICE power can be wasteful and counterproductive.
“(Mazda’s) significant investments in spark-controlled compression ignition (SPCCI) ICE technology, for example, can be used along with electrification to provide consumers a choice of powertrain options while reducing the carbon footprint of their vehicles. Critics of this approach should not forget the significant environmental and social risks of going all-electric,” he said.
By abandoning the conventional wisdom and seeking to maximize ICE’s contribution, Mazda also runs the risk of alienating green investors who seek to penalize this obstinate/realistic direction, depending on your opinion. Toyota has been criticized already for daring to be different by investment funds, which declare the drive to net zero CO2 and the need to save the planet should override more narrow requirements.
JATO Dynamics’ Munoz reckons Mazda’s strategy is risky in Europe, but not so much around the world, and not for climate reasons.
“Therefore the bet is risky from a European perspective, but less so if we look at the global context. Nevertheless, its relationship with Toyota is an indication of how these two companies can cooperate to bring not only more efficient ICEs, but also BEVs,” Munoz said.