Mazda will invest nearly $11 billion in a bid to catch up to domestic and foreign rivals in the battery-electric vehicle market.
The Japanese automaker has been slow to embrace electrification, with significantly fewer hybrid models than most other major brands. And it offers only one pure battery-electric vehicle, the MX-30. And that model has generated relatively little enthusiasm due to its limited range.
The new spending plan sees Mazda give a significant boost to its sales targets for EVs. It previously expected them to account for just 25% of its global volume by 2030 but now says they could reach as much as 40 percent.
“We will promote the full-fledged launch of battery EVs and consider investing in battery production. We estimate Mazda’s EV ratio in global sales to rise to a range between 25% and 40% as of 2030,” the automaker said in a statement released Tuesday from its headquarters in Hiroshima.
A slow start
Japanese automakers, in general, have been slow to embrace battery-electric vehicles, most focusing on a blend of hybrids, plug-in hybrids and EVs — and, in some cases, adding hydrogen fuel-cell vehicles to the mix. But, with regulators in key markets like Europe, China and the U.S. pushing to speed up the transition to all-electric technology, Japanese manufacturers have begun shifting strategies.
Honda announced in April it will invest 5 trillion yen, or about $40 billion, to bring 30 EVs to market by 2030. Toyota, meanwhile, has come under sharp criticism for its cautious embrace of all-electric vehicles and recently began an internal study that, observers have reported, may lead it to accelerate its EV program.
For its part, Mazda said it will launch a three-phase program to accelerate EV production. But CEO Akira Marumoto made it clear the automaker will continue to focus on more than just pure electric power.
Hybrids, plug-ins and pure EVs
“We believe that a multi-solution approach will be effective,” he said.
In the near term, that will include the revival of the once-iconic Mazda rotary engine. More formally known as the Wankel, it will return to the line-up in 2023, the automaker announced Monday. But it won’t be used to power vehicles as had been the case in the past with models like the RX-7 and RX-8 sports cars. Instead, the reborn rotary will function as a range-extending generator for the little MX-30. It will run at a constant speed to keep the EV’s batteries charged or, if needed, to provide current to let the vehicle keep running when the pack is drained.
Mazda expects to begin expanding its EV line-up during the “latter half of phase 2,” it said, referencing a period between 2025 and 2027. A more aggressive roll-out will come during the third phase which runs through the end of the decade.
Details still to be worked out
Senior Managing Executive Officer Akira Koga said specific details have yet to be worked out and will be linked to broader public acceptance of EVs.
The total spending plan is expected to reach 11.5 trillion yen, or about $10.6 billion at current exchange rates. But some of that funding is expected to come from seven partners Mazda said it has lined up. That includes Envision AESC Group, a Japanese-based, Chinese-owned battery supplier, according to Japan’s Nikkei news service, the first to report on the new Mazda EV program.
EVs gain traction
The push by Mazda and other Japanese automakers to expand EV production comes as EV sales begin accelerating worldwide. In the U.S., demand has grown from barely 1% of new vehicle sales in 2019 to around 7% in recent months. That’s expected to hit as much as 20% by mid-decade, while the Biden administration is targeting as much as 50% by 2030.
In Europe, internal combustion technology is expected to begin phasing out by 2030, with the market going all-electric by 2035. China saw EV sales double so far this year and the country is laying out accelerated mandates that some experts believe will lead to a complete shift to all-electric vehicles somewhere between 2030 and 2035.
