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An EV future, paid for by gas

MARY LOUISE KELLY, HOST:

Automakers are moving toward electric vehicles, but the route many are choosing to get there, it involves a lot of trucks and SUVs that are not electric. Those cars are selling in droves today with big profits that are helping to bankroll battery plants. NPR's Camila Domonoske went to a recent auto show where the present and the future were both on display.

CAMILA DOMONOSKE, BYLINE: The Detroit Auto Show last month prominently featured an indoor all-electric test track.

(SOUNDBITE OF TIRES SQUEALING)

DOMONOSKE: Electric Teslas, Volkswagens, Chevys - the auto industry's future - silent motors and squealing tires.

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DOMONOSKE: You could hear them whizzing around as, right next to that track, GM exec Duncan Aldred unveiled the new GMC Acadia...

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DUNCAN ALDRED: Delivering a more commanding, yet entirely premium presence.

DOMONOSKE: ...A three-row row SUV that GMC just made bigger, more luxurious. And under the hood...

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ALDRED: The brand-new 2.5-liter turbo engine.

DOMONOSKE: It's definitely not electric. But there's actually a connection between the gas-powered SUVs on this stage and the electric vehicles in the background. Companies like Ford and GM are taking some of the money from big, gas-powered trucks and SUVs - the vehicles driving their profits - and pouring it into developing battery cars. And there's money to go around. Even execs like Aldred are surprised. He says a few years ago...

ALDRED: No one would have believed, you know, how much people would want to pay and spend on vehicles that we offer.

DOMONOSKE: Want is a strong word, maybe, but certainly people are willing. Kelley Blue Book says the average full-size pickup sells for 65 grand. Average full-size SUV - $78,000. So for many companies right now, their path to electric vehicles is paved with the combustion engine. Michelle Krebs is with Cox Automotive.

MICHELLE KREBS: That's always true of new technology. They take existing sales and profits and plow that back into redesigns of vehicles, new technologies.

DOMONOSKE: That part's not unusual, she says.

KREBS: What's unusual is that this is a transition like we've never seen before, probably since the moving assembly line of Henry Ford, where we're totally changing propulsion systems across the industry.

DOMONOSKE: Using big gas-powered vehicles to subsidize a switch to EVs muddies the benefits to the climate. And it's a complicated transition for established automakers compared to companies like Tesla that only make EVs. Colin McKerracher is with research firm BloombergNEF. He says when it comes to making EVs profitably...

COLIN MCKERRACHER: The groups that are really struggling are the ones that have to do this dance between phasing down very profitable internal combustion engine vehicles and phasing up electric vehicle production.

DOMONOSKE: There are lots of questions about how this dance plays out for companies, for the environment and for workers. But one thing is clear, says Elizabeth Krear of J.D. Power...

ELIZABETH KREAR: We know that EVs are coming.

DOMONOSKE: Twenty-two new models by the end of next year.

KREAR: And that's almost doubling what is available today - and most coming from legacy automakers.

DOMONOSKE: Back at the auto show, General Motors exec Duncan Aldred says that GM is going electric. Cadillacs and Buicks will be all electric by 2030. But at GMC - a truck and SUV brand...

ALDRED: It's more of a progressive and a more of a foot-in-both-camps type strategy.

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DOMONOSKE: As in sell gas-powered and electric vehicles side by side for years.

Camila Domonoske NPR News.

(SOUNDBITE OF LUPE FIASCO SONG, "I'M BEAMIN'") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Camila Domonoske
Camila Flamiano Domonoske covers cars, energy and the future of mobility for NPR's Business Desk.