Automakers Wonder Where the Profit Is. Hydrogen? Hybrids? No, Finance.
Quick quote from a CBS Marketwatch article:
Last week, Nissan chief executive Carlos Ghosn lamented that while gas-electric hybrid cars are in vogue, their cost of production makes no economic sense.
He also dashed hopes for hydrogen-fuel-cell vehicles: "The cost to build one fuel-cell car is about $800,000. Do the math and you figure out that we will have to reduce the cost of that car by more than 95 percent in order to gain widespread marketplace acceptance," Ghosn said in a speech at the National Automobile Dealers Association annual convention in New Orleans.
That means gas-powered cars and trucks are where auto companies will have to stay to find profit from vehicle sales. But that isn't really the case either. Ford and GM make more money through their financing arms than the actual manufacturing of cars of trucks.
Well the good news for those looking forward to a hydrogen economy is that the vehicles have got about 20% cheaper, last thing I heard was they cost about one million dollars each. The bad news is that the infrastructure will costs HUNDREDS of billions and the energy & car companies are looking at you the taxpayer to pay for it. And then of course there's the small question of how to produce hydrogen economically using renewable energy. Seems like the much hyped hydrogen economy is still a few decades of at the very least.
So if selling cars isn't really that profitable any more (although I find it hard to believe selling giant SUVs and pick-ups which don't have to meet emissions or safety standards isn't profitable) then why not go after the giant emerging markets of China and India? And why not go after them with a truely innovative product like an electric vehicle. If most of the money is made through finance, why not expand your customer base with a zero emissions electric car.
Full CBS Marketwatch Article on the Future of the Auto Industry