Electric Vehicle Holdout Mazda Comes In from the Cold

Mazda Motor is shifting direction to make its own hybrid and battery-electric vehicles, according to a report today in Automotive News (requires subscription). The move, if confirmed, would mark a rapid retreat from the “trend-bucking” EV skepticism that has long been a staple of Mazda’s message.

Mazda R & D chief Seita affirmed late last month that Mazda would achieve mandated fuel economy savings by improving engines and transmissions, and by redesigning vehicles to reduce their weight. The Detroit News quoted president and CEO Takashi Yamanouchi echoing that sentiment at last week’s New York International Auto Show, promising release of a brand-new engine next year.

However, Seita had also admitted that Mazda lacked the cash to finance development of its own EV power trains. And this weekend’s Automotive News report directly contrasts the old strategy, quoting Yamanouchi as saying that hybrids and battery-powered electric vehicles developed in house will contribute to its plan in order to “boost the average fuel economy of its cars globally 30 percent by 2015.”

Mazda’s conclusion that it must find the financial capacity to develop EVs is in keeping with recent statements by the new Obama-approved CEO at General Motors, Fritz Henderson. Henderson is pushing forward with heavy spending on advanced technology even as GM desperately seeks to stave off bankruptcy. Radical increases in fuel efficiency are needed to deliver what consumers will soon demand, explains Henderson in a recent interview with Automotive News: “We actually think oil prices are going to go up. That’s what our entire plan is based on. So we’re going to make the bets.”

Gaining a stake in advanced technology means accepting the losses that GM will suffer on early generations of its Chevy Volt plug-in hybrid, says Henderson:

You don’t get to skip Gen-1, you’ve got to do Gen-1 and 2 to get to Gen-3. And what we want to do is make sure we launch the car well, that we get the maximum learning from it, that it’s successful in the market, so that when we get to Gen-2, we’ve got the most cost out that we can. And when we get to Gen-3, get the most cost-out we can, and that’s how I look at it.

In other words, the sooner such companies bite the bullet, the sooner they’ll be in a position to compete with Toyota, which is just months away from sales of its third-generation Prius.