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Ford Electrifies Two Fusion Sedans, Pulls Plug on Hybrid SUV

The badge on the back of a Ford Escape Hybrid sport-utility vehicle. Photographer: Chris Goodney/Bloomberg
The badge on the back of a Ford Escape Hybrid sport-utility vehicle. Photographer: Chris Goodney/Bloomberg

Jan. 9 (Bloomberg) -- Ford Motor Co. is driving in different directions on its hybrid strategy by pulling the plug on its 7-year-old gasoline-electric Escape sport-utility vehicle while rolling out two hybrid versions of its Fusion family car.

Ford today at the Detroit auto show introduced a sleekly restyled Fusion, a midsize that aims to gain ground on Toyota Motor Corp.’s top-selling Camry. This Fusion will come with a choice of three propulsion systems: traditional gasoline engine, a gas-electric hybrid and a plug-in hybrid. When Ford debuted a new Escape in November, it dropped the hybrid, which sold 10,089 copies last year, 9.8 percent fewer than in 2010.

Hybrids were a tough sell for Ford and other automakers last year. Sales of the Fusion hybrid fell 46 percent to 11,286 models, while the total hybrid market declined to 2.2 percent of U.S. auto sales, from 2.4 percent in 2010, according to researcher LMC Automotive. Ford has said it expects 10 percent of its sales to be hybrids or electric vehicles by 2020.

“Ford is hedging its bets,” said Mike Omotoso, LMC’s forecaster of hybrid and electric vehicles, said in an interview. “It’s a form of political correctness for all carmakers to say, ‘We’re into hybrids and electric vehicles,’ but right now it’s an expensive technology most consumers aren’t willing to pay for.”

Ford’s Strategy

Ford announced last year that it plans to triple production of hybrids and electric vehicles to more than 100,000 in 2013, as it rolls out five battery-powered offerings, including the two new Fusion hybrids. In 2011, Ford sold 27,114 hybrids, down 24 percent from 2010, according to researcher Autodata Corp.

Though Chief Executive Officer Alan Mulally has revived the automaker in part by focusing on fuel economy, Ford still has a reputation for building gas guzzlers, said Sherif Marakby, director of Ford’s electrification programs and engineering. Ford research found that 68 percent of U.S. consumers don’t believe the company’s cars and trucks are fuel efficient.

“It’s a perception,” Marakby said. “But it’s just as important as reality.”

Ford is trying to take a less costly approach to fuel efficiency by dropping the hybrid version of the Escape, Marakby said. It’s replacing the Escape’s hybrid system with a choice of two EcoBoost engines, which use direct fuel injection and turbocharging to improve fuel economy by as much as 20 percent.

Hybrid Costs

It can cost less than $1,000 to upgrade to an EcoBoost engine, while a hybrid powertrain adds about $3,000 to a Ford model’s cost, Marakby said. On some versions of the new Escape, an EcoBoost engine will be standard equipment.

“The reason people don’t buy hybrids in volume is mainly the price,” Marakby said in a Jan. 5 interview. “Customers tell us they’d be willing to pay a price premium of a couple thousand dollars, so we know we still have room to work to bring it down.”

Ford, based in Dearborn, Michigan, hasn’t revealed prices on the new Fusion or its hybrid variants. The current Fusion starts at $20,200 for the gasoline engine, while the hybrid Fusion starts at $28,700, according to auto researcher The 2012 Escape starts at $21,440, while the hybrid version starts at $30,570.

Ford hopes to steer Escape hybrid buyers into its new C-Max, a small wagon it’s bringing from Europe this year and will be offered only in hybrid or plug-in hybrid versions, said Derrick Kuzak, the automaker’s global product-development chief.

C-Max Wagon

“Our thought process was to provide Escape with great efficiency, in fact efficiency with gasoline engines that approach that of our existing Escape hybrid,” Kuzak said in a Dec. 14 interview. “And then move some of that hybrid technology to a distinct, hybrid-only C-Max.”

Ford probably will lose customers to Toyota’s Highlander hybrid, the only mid-size SUV to offer a gas-electric powertrain, said Bill Visnic, a Detroit-based analyst with Edmunds.

“The C-Max is eggy looking and weird and not anything close to an alternative to the Escape,” Visnic said. “I’m just not buying that. The C-Max looks like a downsized minivan.”

Ford sees more growth potential for hybrids in cars because SUVs still have an image as gas hogs, Marakby said.

“We’ve talked to customers who didn’t want to buy the Escape hybrid because it’s an SUV,” Marakby said. “We think that’s going to lean the volume to the car end.”

Mileage Rises

Family cars such as the Fusion, because of their smaller size and smoother shape, can generate more eye-popping mileage numbers, Marakby said. The new Fusion hybrid will get 47 miles per gallon in city driving, up from 41 mpg on the current model, he said. The new Fusion hybrid will get 44 mpg on the highway.

The Fusion Energi plug-in, through a combination of pure electric driving and gasoline propulsion, will generate an mpg equivalent of more than 100, better than General Motor Co.’s Chevrolet Volt plug-in or Toyota’s plug-in Prius coming this year, according to Marakby.

Ford has found that advertising the 41-mpg rating on the current Fusion hybrid helped boost sales of both the gasoline and hybrid versions. Fusion sales rose 37 percent to 248,067 last year from 180,671 in 2009, when the hybrid was introduced.

“Fusion last year set a sales record and with this new family of vehicles, we believe we can build on that success,” Mulally told reporters at the Detroit auto show today. “I think we really will be preferred in that” mid-sized car segment.

Buzz Created

Fusion was the No. 3-selling car in the U.S. in 2011, behind Toyota’s Camry at 308,510 and Nissan Motor Co.’s Altima at 268,981.

Camry, the top-selling car in the U.S. the last 10 years, is made at assembly plants in Georgetown, Kentucky, and at affiliate Fuji Heavy Industries Ltd.’s Subaru plant in Lafayette, Indiana. In negotiations last year with the United Auto Workers, Ford agreed to add Fusion production to the Mustang assembly plant in Flat Rock, Michigan. It had previously been made only at Hermosillo, Mexico.

The hybrid “definitely created buzz and brought customers into the showroom who otherwise would not have come in,” Marakby said. “And when they saw the base Fusion with really good fuel economy at a lower price point, it increased sales.”

This time, customers may get sticker shock when they go to the showroom later this year to see the new Fusion hybrid and plug-in, Visnic said.

“It’s certain to be expensive,” Visnic said. “Ford got ahead of itself trying to move buyers upscale with the Focus and now they’ve got a $1,000 discount on the hood of that car. I see the same potential for Fusion.”

To contact the reporter on this story: Keith Naughton in Detroit at

To contact the editor responsible for this story: Jamie Butters at

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