Why Subaru’s Slow To Go EV Strategy Is Looking Brilliant Now

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Many criticized Subaru's electric vehicle strategy, but it now looks like an intelligent decision. See why Subaru is in a better position with its EVs now.

Subaru is a small automaker, and it needs to be innovative. And they are. When other automakers rushed to bring more electric vehicles to the market, Subaru chose to stand on the sidelines and wait. They launched a new EV, the Solterra, and they let Toyota bear much of the manufacturing cost.

Smart Move Subaru

With the slowdown in electric vehicle demand, Subaru's decision is not just wise but brilliant, given the downturn in EV sales. WardsAuto says, "Subaru always planned to be a fast, smart follower when it comes to transitioning to EVs, and that strategy seems sound given the slowdown in consumer demand."

According to CarEdge, the Subaru Solterra has a 363-day supply and 3.937 models sitting on U.S. retailers' lots now. The new 2024 models are arriving now. The slowdown is here.

Ray Shefska at CarEdge says, "Performance-wise, the Solterra just isn't worth the high price tag. However, I may change my thinking if Subaru takes cues from the sluggish market and drops prices by $5,000. The Subaru Solterra, already experiencing price cuts in Australia, faces slow sales in North America and even slower charging speeds."

Subaru Culture

"We have a culture second to none. I give a lot of credit to Tom Doll for setting up the company for success and how we want to do business and go to market," says Jeff Walters, president and COO of Subaru of America.

Subaru's Marketing Is Brilliant

"Subaru has as sound a marketing platform as I have ever seen, and it seems to have grown organically out of the product line and customer base rather than an idea that was hatched by a bunch of Madison Avenue types who tried to apply it to the brand like wrapping paper," says Los Angeles-based marketing consultant Dennis Keene.

But Subaru is not standing still. WardsAuto says, "Subaru's strategy to electrify its models calls for investing nearly $10.5 billion by 2030, including $1.7 billion announced before Walters took over."

As I've reported previously, Subaru will roll out battery-electric and hybrid vehicles between now and 2028. These will be jointly developed with Toyota, which owns a 20% stake in Subaru Corporation. The small Japanese automaker will produce battery-electric vehicles (BEVs) alongside gasoline-powered cars at its Gunma plant in Japan starting in 2025.

Subaru Will Produce Homegrown Electrics

WardsAuto says Subaru's BEV plant in Japan will open in 2028, and the automaker will produce its own "homegrown, home-engineered electrics."

Walters says Subaru is sticking to a target of 50% of its sales being BEVs by 2030. WardsAuto says, "Walters is running Subaru at a time when sales are strong, the brand seems healthy and the strategy to electrification of its showroom is pretty well set."

Wards Auto says Subaru customers are fiercely loyal and known to be price-sensitive. Walters, after decades in district, sales, and marketing posts, is well aware of how sales can slip off a cliff if the company doesn't get its pricing right. Take the Forester compact SUV, for example.

Forester Sales Are Off The Charts

The top price for the Forester Limited trim is $33,975, far below today's average transaction price of around $47,000. Yet Forester, this year's top-selling Subaru model, ranks among J.D. Power's "Best" for reliability, and it has been named Consumer Reports' "Best SUV" an amazing 11 years in a row.

Wards Auto says, "The Forester gets a "strong" hybrid version next year, solving one of the few gripes owners have: that fuel economy could be better. The word "strong" is being employed to distinguish it from former "mild" hybrids, and denotes better fuel economy."

A New 3-Row SUV EV Is Coming

"The hybrid technology comes from Toyota, with similar results as in the Toyota Prius. Indeed, Subaru will introduce eight BEV models by the end of 2028, including four CUVs by 2026. Among them is a CUV EV Toyota that will be built at its Kentucky plant starting next year."

I reported earlier that the new BEV will be a 3-row electric SUV. You can check out the report here.

Some automotive executives might be restless with Subaru's slow-to-go EV strategy, but not Walters. "I was lucky. I landed at the right place on the first swing."

Thanks for reading, everyone. I hope you enjoyed this Subaru EV report. See you tomorrow for my latest Subaru Report.

MORE SUBARU EV NEWS

1. Subaru will offer new electric vehicles that are lighter and more efficient than its rivals. In addition, Subaru is designing new models to fit its customers' needs. Find out how here.

2. The 2024 Subaru Solterra EV is available now to build online. Subaru of America recently launched a configurator that allows customers to see which trim is best for them. Check out the latest details here before visiting the dealer.

I am Denis Flierl, a top Torque News and Subaru reporter since 2012. I’ve invested over 30 years in the automotive industry in a consulting role, working with every major car brand. I am an experienced Rocky Mountain Automotive Press member. You'll find my expert Subaru analysis here. Follow me on my The Dirty Subaru website, Dirty Subaru blog, X SubaruReport, All Subaru, WRXSTI, @DenisFlierl, Facebook, and Instagram.