Japanese automaker Mazda (7261.T) has a small, yet cult-like following here in the U.S. While fans of Mazda enjoy the driver-focused characteristics and sporty handling, there is one one area that the company is lagging: electrification.
Though the brand had a strong Q4 in North America—sales jumped around 40% versus a year ago—Mazda saw its overall sales dip around 12% for the year compared to 2021, partly because of supply chain issues. Mazda sold around 295,000 cars in North America last year, highlighting its small brand status in a region where GM (GM) sold nearly 10 times as many cars.
It’s why investing big time into fully electric vehicles has been so hard for Mazda, because of the billions of dollars needed for new platforms. It’s also why Mazda is leaning hard into its hybrid options, like it’s all new flagship SUV, the CX-90.
“So CX-90 launches with our most powerful engine ever in both gasoline mild hybrid and also plug-in hybrid forms - so the platform has only electrified powertrains,” says Mazda North America president & CEO Jeff Guyton in an interview with Yahoo Finance. “It really represents a big step forward in terms of the premium-ness of the Mazda brand, and we're bringing that together with a premium experience in our new retail evolution showrooms across the country.”
The CX-90 is a big three-row, premium SUV, and as Guyton mentions, will only have “electrified” powertrains. In a country like the US where EV is growing every year, the question is this: why wasn’t the CX-90 given a fully-electric powertrain?
Guyton says it's because Mazda’s customers haven’t been asking for that—yet.
“What we see happening right now is that customers are obviously quite interested in the journey of electrification, but there are also inhibiting factors because the customer experience for electric is, let's say, it has growing pains right now,” Guyton says. “Whether you're talking about charging, or cold weather, or hot weather, or electricity in California in the summertime, and so forth.”
Mazda currently has only one EV for sale in America, the midsize MX-30 EV which has a paltry 100 mile range, and is only sold in limited quantities in California. Mazda says a hybrid range-extending version of this car is coming out later this year, with the company’s first true EVs slated for 2025-2027 timeframe.
It’s all part of the company’s $10.6 billion investment into EV’s, which does sound like a decent sum of money, but pales in comparison with what giants like GM, Ford (F), and Volkswagen (Vow3.DE) are spending.
Guyton says the company’s plan to delay its EV rollout, and devote funding to hybrid powertrains, is the right answer for the current environment.
“I think there's a lot of demand, there's a lot of interest [in EVs], but the technology and the scenery around it in terms of charging and so forth is not really mature yet,” he says. "So we think that the customer experience right now suffers a bit, and that our formula can provide something more timely.”
Speaking of timely: Mazda investors will be hoping Guyton and the management team in Japan are right and haven’t waited too long to begin its EV transformation.