A worker drives a Subaru XV SUV at a Fuji Heavy Industries plant in Ota, Japan.Tomohiro Ohsumi/Bloomberg
Subaru Corp. is considering electric versions of its existing models for the car maker's first foray into the technology, as it joins peers around the world in pouring cash into battery-powered vehicles amid tightening emissions rules.
The Japanese company, which plans to make record investments in research and development in this financial year, is weighing installing electric powertrains in current models rather than designing an all-new car, chief executive officer Yasuyuki Yoshinaga, 63, said in an interview on Friday. The move would allow Subaru to capitalize on its reputation for safety while eliminating the need to partner with another auto maker, he said.
Such a strategy would contrast with the approach of other manufacturers like Daimler AG's Mercedes-Benz. The luxury-car maker has bundled its electric-vehicle technology, including charging boxes and energy storage, under the EQ sub-brand, giving it more visibility to better compete with Tesla Inc. Mr. Yoshinaga sees advantages in sticking with a single nameplate.
"If there's already an attractive Subaru model, for example the XV crossover, and if a customer in Beijing wants one but is only allowed to buy an electric vehicle, if there's no electric version then he can't buy it," he said at the auto maker's headquarters in Tokyo. "Providing the choice of an EV means the customer can still desire the same Subaru."
Subaru is prioritizing spending on electrification over other technologies, like autonomous driving and connected cars, as it races to bring a plug-in hybrid model to market next year and an all-electric vehicle by 2021. The company is budgeting ¥134-billion ($1.6-billion) on research and development in the 12 months through March, 2018, more than double what it spent in the year ended March, 2014.
Still Subaru's spending on R&D is lot less than the big Japanese auto makers that are also stepping up efforts to produce electric vehicles. Toyota Motor Corp., which owns a 16.9 per cent stake in Subaru, plans to spend ¥1.05-trillion on R&D in the current fiscal year and Honda Motor Co. will invest ¥750-billion.
Toyota aims to introduce a global electric vehicle model and Honda has said it plans to set up a joint venture with Hitachi Automotive Systems Ltd. to develop and produce motors for electric cars. Toyota in 2014 sold some of its stake in Tesla and decided to end sales of the jointly developed electric version of the Japanese automaker's RAV4 sport utility vehicle.
While Mr. Yoshinaga said he's not against a partnership, adding an electric powertrain to one of Subaru's existing vehicles would make a tie-up unnecessary. Instead the key will be the selection of suppliers for the battery and motor. A decision on this will have to be made in about a year, he said.
Subaru can take this approach because what defines the brand now is safety, not the boxer engine that is currently found in its entire lineup of only gasoline-powered vehicles, according to Mr. Yoshinaga.
The XV crossover, called the Crosstrek in the United States, and the Impreza sedan were awarded the top prize this year with the highest score ever in the state-run Japan New Car Assessment Program, which included tests for crashworthiness and pedestrian protection.
Driver Assist Subaru's EyeSight driver-assist system comes a close second in terms of R&D spending, although Mr. Yoshinaga said he would seek to limit any increase in the price of the technology to enable the carmaker to offer the same safety suite across all models.
EyeSight is the first driver-assist setup to use only stereo cameras to detect objects such as vehicles, pedestrians, cyclists and motorcyclists, according to the company. It's due to be updated this year with plans to add functionality for autonomously following a car on congested highways, with a further upgrade in 2020 to add fully autonomous highway driving, including the capability to change lanes.
The auto maker is considering Autoliv Inc.'s cameras for EyeSight as it looks for options beyond Hitachi Automotive that has been a supplier for almost a decade, people with knowledge of the matter said this month.
Subaru needs to cast a wide net when looking at suppliers to find the best balance of quality and cost, said Mr. Yoshinaga. In the connected car space in particular, the CEO said he favours forming partnerships with companies in the United States, because the technology there is more highly developed.
"We need to work with parts makers on joint development right from the start," said Mr. Yoshinaga. "If we don't, we won't be able to keep up in this era of rapid change."