Mazda's electrification – it's already slow, and it's going to be a little slower

Written by Ma Xiaolei

Editor / Qian Yaguang

Design / Division

设计 / Autonews，作者：HANS GREIMEL

The Japanese brand Mazda continues to record sales in the United States, and interestingly, there are almost no electric models in its lineup. This seems to prove that Mazda's "slow" policy when it comes to electric vehicles is working.

Mazda President and CEO Katsuhiro Moro said that due to the very uncertain demand, he plans to slow down the promotion of electric vehicles, and lowered Mazda's global sales forecast for 2025, and he raised his outlook for this market based on the hot sales of several gasoline vehicles in the North American market.

Mazda now aims to sell 600,000 vehicles in North America by 2025, compared with its previous target of 500,000 vehicles, he said. About 450,000 of those vehicles will come from the U.S. market, which would surpass the company's 1986 record of 379843 U.S. sales.

Mazda's new CEO gave an exclusive media interview in Tokyo on December 6, outlining a series of new details of the company's electrification strategy and publicly disclosing a new, lower global sales target for 2025.

He said Mazda now expects global car sales to reach 1.6 million units in 2025, down from its previous target of 1.8 million units. The decline was mainly due to the company's consolidation of operations in China, as well as lower sales in Europe and Japan as Mazda shifted its focus from production to quality.

But growth in the North American market will help offset slowing demand in other markets, with Mazda already overtaking Canada in deliveries in Mexico and also hitting new highs, he said.

He outlined the automaker's electrification strategy and said the next few years will be "bumpy". He also introduced Mazda's electric vehicle lineup for 2030 and teased new technologies to come.

Katsuhiro, 63, said Mazda would follow electric vehicles "purposefully".

"One of the big problems we face is the uncertainty of demand," he said. In the current market, electrification, especially pure electric vehicles, is not developing at a fast pace. As a result, we may slow down the pace of growth a bit. That's why I call us following electric cars with purpose. ”

Mazda expects 25% to 40% of global sales to come from electric vehicles by 2030. But Katsuhiro said that the demand for electric vehicles is declining, both globally and in the United States.

As of September, electric vehicles accounted for less than 1% of Mazda's global sales of 931,000 vehicles. Electrified products account for 20% overall.

Reality checking

According to Experian, the U.S. EV market share rose to 7.4% in the third quarter from 5.2% a year earlier. But observers such as Cox Automotive warn that automakers are ramping up production capacity and launching new models faster than consumers can afford.

GM and Ford said in October that they were slowing down EV investment to balance supply and demand. Even Musk said he was in no hurry to build a factory in Mexico due to short-term demand issues.

Some analysts believe that EV demand in the U.S. is saturated among early adopters and high-end buyers. At the same time, political uncertainty surrounding the 2024 U.S. presidential election has also raised questions about the future of regulation and incentive support for electric vehicles.

Katsuhiro said: "Wait-and-see is our cautious strategy. ”

"Between now and 2030 is the darkness before the dawn of electrification, and we have to go through this bumpy journey," he said. We only need to meet the needs and desires of consumers. Now, consumers are looking for alternative solutions beyond battery electric vehicles. ”

Focus on hybridization

In fact, internal combustion engines, including hybrid power units, are driving Mazda's massive growth. Katsuhiro said that Mazda's sales in the U.S. will reach 400,000 units by 2024. Mazda's sales in the U.S. climbed 21 percent to 323836 units as of November.

Currently, Mazda's electrification products in the U.S. are the CX-90 plug-in hybrid model and the MX-30 ultra-compact electric SUV. But the low-speed MX-30 will be discontinued after the 2023 model year. In the U.S., electrified models account for only 1.9% of Mazda's sales.

Plug-in hybrid models account for half of CX-90 crossover sales in the U.S., about double the brand's initial forecast, Mori said. As for the CX-50, Mazda expects the hybrid version to account for 20 to 25 percent of sales as an option.

The CX-70, which is expected to be launched in the U.S. in 2024, will also feature plug-in hybrid technology.

Unlike the CX-90 and CX-70 plug-in hybrid systems developed in-house by Mazda, the CX-50 will use a hybrid system from its partner Toyota, Mr. Katsuhiro said. Toyota owns a 5.1% stake in Mazda, which produces the CX-50 at a plant in Alabama that is jointly operated with Toyota.

The next generation of electric vehicles

Although Mazda has had a slow start with electric vehicles, it is not stagnant. Mazda plans to launch seven to eight electric vehicles by 2030, Moro said.

In November, Katsuhiro Moro established a new division called e-Mazda to develop, design, market and sell an upcoming line of dedicated electric vehicles. The models will be built on a new scalable platform, with the first model set to hit the market from 2025 to 2027. Katsuhiro said the new department will have about 100 employees.

"When people talk about electrification, they are mainly talking about technology and production. For me, it's important to talk about business strategy, financials, and collaborations with other suppliers and OEMs. We need to evaluate the entire business. ”

"That's what we're all about," he added, "and we've got it all in one one-stop shop." ”

The new division is still finalizing the basic details of Mazda's next-generation electric vehicles. Mazda's lineup of next-generation electric vehicles will initially focus on crossovers, possibly avoiding compact or small cars because the batteries of these models are too expensive, Katsuhiro said. A key focus, he added, is to make electric vehicles lighter and less costly than thought.

Engineers may determine three motor sizes: small, medium, and large, with power ranging from 70 kilowatts to 110 kilowatts. Katsuhiro said that the single-motor and dual-motor layouts are also expected.

Mazda is working with three battery suppliers. Prime Planet Energy & Solutions, a joint venture between Toyota and Panasonic, already supplies batteries for the CX-90. Mazda has also arranged to purchase batteries directly from Panasonic and Japan's Envision AESC.

Electric vehicles made using these batteries will initially be manufactured at the company's Hofu plant in western Japan, but are likely to be assembled in North America from 2028 in order to comply with U.S. EV tax incentives, he said.

Toyota Team

Mazda is developing two types of electric vehicles. One is a new purpose-built electric vehicle, and the other is an electric vehicle based on an existing architecture that also accommodates an internal combustion engine and a hybrid system.

From around 2026, Mazda's electric vehicles will also be almost entirely equipped with electronic and automotive software systems jointly developed with Toyota, thereby saving money on EV development.

Toyota's software division, Woven by Toyota, develops Arene's automotive operating system. The system will be unveiled in 2026. Katsuhiro said that the electrical and software systems of Mazda's upcoming electric vehicles will be 90 percent consistent with Toyota's.

Relying on Toyota's electrical and software architecture will result in significant savings. He did not disclose specific figures, but expected it to be equivalent to the funds needed to develop two separate models. He said that working with Toyota could save Mazda 70 to 80 percent of the total investment cost.

"There are a lot of things that you can't do with one company alone. "In the past, we might have said that this was a competitive area. But now, it's an area of cooperation. ”

Although Mazda is working with Toyota to develop important digital systems for next-generation electric vehicles, the company is prioritizing the development of an overall vehicle platform in-house.

"This," said Katsuhiro Mori, "is to make Mazda an independent brand." ”