Saturday, 27 April, 2024

After the Collapse: A Decade of Auto Industry Change


To say that the last few years have been tumultuous for auto manufacturers would be an understatement. Emerging from the 2008 financial crisis, the following decade-plus has been one of massive change that’s still ongoing.

One of the first real developments to come out of the sub-prime mortgage collapse was a focus on small cars, small engines, and greater fuel efficiency. As consumer spending plummeted, the previously surging market for large SUVs plummeted and with it, large, naturally-aspirated engines. In its wake came the rise of the turbo-four, as engineering made a technological leap that allowed for the proliferation of smaller engines providing better fuel consumption and more power.

Ford Mustang

Even now, in a time of relatively low fuel prices, four-cylinder engines are options on most vehicles, regardless of class, size, or nameplate. Even the arch-typical American muscle car, the Ford Mustang, carries an inline-four as its base engine, an offering that would have been seen as sacrilegious not even 10 years ago.

Nothing Says Times Change Like a Four-Cylinder Ford Mustang

Interestingly, the powertrain that seemed poised to benefit most from this shift toward small, more efficient engines, has pretty much been wiped clean from the slate. Diesel engines have long held a loyal fanbase of drivers who loved not just the extended range diesel offered over conventional gasoline, but also the high amount of torque provided. Surely this would be an obvious solution for automakers looking to improve their corporate average fuel economy (CAFE) while still offering powerful engines.

Maybe there’s an alternative universe where this has come to pass. One where most drivers have shifted toward diesel engines instead of more sophisticated four-cylinder gas engines. One where the immediate torque of an electric motor isn’t quite so impressive next to whatever engineers could do a diesel and several millions dollars worth of development funds.

VW Golf

In this universe, however, things went a different direction. Instead of offering a more economical future, Volkswagen forever tainted the diesel engine as a dirty, poisonous engine. Thanks to their emissions cheating, they, along with many other companies, have either scaled back their diesel offerings or dropped them outright.

Imagine a World Where VW Didn’t Ruin Diesel Engines for Everyone

But where one gas alternative failed, another emerged.

Toyota had already demonstrated the viability of shifting vehicle propulsion toward batteries, with their Prius becoming synonymous with environmentally-friendly driving, if but for a few years. Still, many looked to hybrids not as a solution but as a stop-gap measure. Instead of simplifying engineering, it added a great deal more complexity. While most companies now feature some sort of hybrid in their lineup, this drivetrain hasn’t taken over the way some thought. Instead, it took a startup from Silicon Valley run by an eccentric billionaire to offer up the next phase of auto engineering.

Toyota Prius Prime

The Prius was Once the Environmentally-Friendly Car

Tesla hit the market with the intention of getting noticed. Whereas most manufacturers equated fuel-efficient with small and boring, Tesla went the other direction. They took one of the most driver-centric vehicles, the Lotus Elise, stripped it bare, dropped a few thousand cell phone batteries into it and hit the streets. They immediately signalled that electric motors weren’t just better for the environment than gas engines, but that they could be more fun, too.

The Model S came next and proved to the world that an all-electric sedan not only was possible but also achievable. The auto industry was put on notice.

Tesla Model S

Unfortunately, it turns out that having a singular vision at the helm of your business can be as much a challenge as a boon. While Tesla may have proven that they could make and sell an affordable car for the masses, the focus drifted toward seeing what else was possible. A push for complexity increased development costs and sale prices as well as slowed-down production times. So, while Tesla’s are becoming an increasingly more common sight in most cities, they still occupy the luxury vehicles segment, remaining beyond the reach of most buyers. But, they now go faster than ever, for whatever that’s worth.

Tesla has Forever Changed the Auto Industry

But it doesn’t really matter if Tesla has lost its way or not. Having proven what electric vehicles are capable of and that there’s a market for them, other companies are moving in, and, with them, proven production numbers. Once auto industry giants like Toyota and Ford decide to, they’ll be able to regularly produce affordable, all-electric vehicles in numbers that Tesla hasn’t been able to achieve.

Will that be the death-knell for the internal combustion engine? Or will engineers continue to find new ways of getting even more power out of smaller amounts of fuel? BMW has already publically stated that they’ll produce gas engines for another 30 years which suggests that they believe that they can out-compete EVs for years to come.

Ford Mach-E

Still, with the amount of torque the can produce, the simplicity of their production, and the smoothness and quiet they offer, it does seem that EVs are the future. Current limitations, like battery mass and charging times, will continue to improve. Already the major manufacturers are striking deals with energy companies to build more charging stations. As well, Tesla has long promised a million-mile battery, a product that if delivered would be an all-new game-changer.

The only certainty that the auto industry has going forward is that there will be greater change.