Subaru and other small carmakers squeezed by EV mandates

Subaru customers would seem to be the perfect demographic for electric vehicles. Owners of Outbacks, Legacys and Foresters generally align with the green movement: higher income, better educated, with concentrations on the coasts and in the Rocky Mountain states.

Yet, neither the all-new 2020 Subaru Outback or Legacy is offered with a battery option. Subaru says buyers aren’t interested.

But with California and 13 other states mandating that about 8% of each automaker's sales be battery-powered, zero-emission vehicles by 2025 — within the product cycle of Subaru’s current lineup — the maker of affordable, all-wheel-drive vehicles is caught in a vise.
Like other carmakers from Fiat Chrysler Automobiles to Mazda Corp., it will have to make cars that customers don’t want — or buy carbon credits for up to $8,000 for every EV they don’t sell to meet their quota.

The mandates are particularly burdensome for smaller auto companies, such as Subaru Corp. and Mazda that don’t have the vast research and development resources of a Toyota Motor Corp. or Volkswagen AG. And they don't have profitable pickup lines like Ford Motor Co. and General Motors Co. to subsidize unprofitable electric vehicles.

“We have limited manufacturing facilities, limited engineers that can work on multiple programs,” Subaru’s Tenn said. “We’re trying to launch everyday cars. It’s tough to take those people off and put them on EV programs if we want to give our customers the kind of vehicles they expect from us.”

Fiat Chrysler has seen little demand for EVs such as the tiny Fiat 500e that former CEO Sergio Marchionne famously pooh-poohed as a California-compliance vehicle. So it has thus far paid millions in credits to Tesla in order to keep selling vehicles in California. Through 2023, Fiat Chrysler has committed to paying nearly $2 billion in emissions credits to operate in U.S. and European markets. It also has pledged more battery-powered vehicles.


https://www.detroitnews.com/story/business/autos/2019/09/03/subaru-other-small-carmakers-ev-mandates/2130087001/