Subaru Finally Has an SUV That’s Good for the Great Outdoors
(Bloomberg Opinion) -- For a car brand so closely associated with the great outdoors, Subaru Corp. has been weirdly slow to cash in on environmental friendliness. In the U.S., its biggest market by far, the Japanese automaker offers just one partly electrified model, the plug-in hybrid Crosstrek compact SUV. Even that is listed on the company’s website as having “limited availability.”
So Thursday’s unveiling in Tokyo of the Subaru Solterra, its first fully electric SUV, feels like an important development. Possibly that reflects my living too long in the Northeast with a brief stint on the West Coast. However, it also manifests a change in the mindset of a segment of the global auto industry that has lagged behind in the gathering race toward electrification.
Subaru is 20% owned by Toyota Motor Corp., and the Solterra is built on a platform designed jointly by the two companies. Toyota, having taken an early lead in hybrids with the Prius and with a lingering predilection for fuel cells, has been an EV laggard but is trying to catch up. It announced a push into EVs along with Subaru in the summer of 2019. Here’s why: Some 5.6 million EVs are forecast to be sold this year, almost three times the number in 2019, according to recent numbers from Bloomberg NEF. While that means they remain a small fraction of the overall auto market, they now account for all of the growth and then some, which is where capital tends to flow. Exhibit A: Electric pickup startup Rivian Automotive Inc.’s barnstorming IPO this week. Exhibit B: Ford Motor Co.’s 125% gain this year fueled in part by excitement around its accelerating push into EVs.
Subaru’s shift stands out especially because of the bizarre stance it took on electric vehicles just a few years ago. Bloomberg NEF’s Nat Bullard pointed me toward Subaru’s corporate social responsibility report for 2018, which contains this absolute gem:
On the other hand, AWD [all-wheel drive], which is a major strategic vehicle 90% of which Subaru is introducing to the market, has a great opportunity to cope with recent climate change, compared to FW [front-wheel] and FR [rear-wheel] automobiles of 2WD [two-wheel drive]. The main reason for this is that traveling stability unique to AWD is very good compared to 2WD on rough road after torrential rain and snowy road surface due to heavy snowfall. There is a possibility that the recognition that it is an automobile that can run safely and with peace of mind expands and leads to an increase in sales opportunities.
See? Even if climate change wreaks havoc on that sequoia grove you were planning to visit, an all-wheel drive, gasoline-burning Subaru would at least get you there more safely than some other vehicle. Imagine the tagline you could pin on that: “Mad Max Would Drive a Forester.”
It should be noted the context for that quotation was a broader comment about the risk posed to Subaru by tightening environmental regulations on vehicles. Subaru, along with Toyota, was part of a group of automakers that initially backed former President Donald Trump’s attempt to roll back efficiency standards and strip California of its ability to set its own vehicle-emissions standards. Both companies later abandoned the effort after Trump lost re-election.
Still, bygones and all that. Subaru has at least moved on from talking about capitalizing on climate change to launching the sort of vehicle that might help to mitigate it.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.
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