Ford’s Seven Electrified Models Face Risk of Buyer IndifferenceBy
Carmaker begins detailing its $4.5 billion bet on hybrids, EVs
Monthly C-Max hybrid sales about same as half day for F-Series
A Mustang souped up with electric power and a sport utility vehicle that can go 300 miles on a single charge are among seven new battery-powered vehicles Ford Motor Co. promised Tuesday. There’s just one problem: It’s not at all clear consumers will buy them.
While Ford garnered the most attention for canceling a Mexico factory amid pressure on the industry from President-elect Donald Trump, the automaker also revealed the first details of its ambitious $4.5 billion overhaul of its lineup with electric and hybrid models. The electrified vehicles laid out Tuesday are among 13 such models planned for the next five years that’ll account for 40 percent of Ford’s showroom offerings, up from 13 percent.
Electric power once appeared the only way to achieve U.S. fuel economy standards that will require automakers to average 50.8 miles per gallon with their lineups by 2025. Yet those regulations enacted by the outgoing Obama administration are anything but certain. In fact, Ford is actively lobbying the Trump team to ease up on fuel economy rules it sees as out of step with a market where gasoline prices are low and SUV sales high. In an interview last month, Ford Chief Executive Officer Mark Fields pointed to a lackluster sales record for electrified vehicles in the U.S. market.
“In 2008, there were 12 electrified vehicles offered in the U.S. market and it represented 2.3 percent of the industry,” Fields said in the Dec. 2 interview with Bloomberg. “Fast forward to 2016, there’s 55 models, and year to date it’s 2.8 percent.”
Even so, Ford is doubling down on electric vehicles as a long-term play on a planet that ultimately must replace fossil fuels with renewable energy to power mobility.
“Our investments and expanding lineup reflect our view that global offerings of electrified vehicles will exceed gasoline-powered vehicles within the next 15 years,” Fields said in Tuesday’s statement.
Besides the Mustang and the small SUV, Ford also unveiled plans to build a hybrid F-150 pickup by 2020, a plug-in Transit commercial van in 2019, two “pursuit-rated” hybrid police cruisers and a hybrid self-driving vehicle to be sold to ride-hailing and ride-sharing services in 2021.
With the exception of Tesla’s sleek luxury cars, electric vehicles are not selling. Sales of the Toyota Prius family of hybrids, the top gasoline-electric nameplate in America, fell 27 percent in the first 11 months of last year. Ford’s C-Max hybrid, which faces an uncertain future, sold just 1,532 units in November -- roughly equivalent to deliveries for the automaker’s F-Series pickup line each day by around lunchtime.
“The challenge for Ford will be: Can they really sell these?” Michelle Krebs, a senior analyst for researcher Autotrader.com, said in an interview. “Just because you build it doesn’t mean they’ll buy it.”
The electric SUV, hybrid Mustang and hybrid autonomous vehicle will be built at Ford’s plant in Flat Rock, Michigan, which is getting $700 million in upgrades and 700 new jobs, Fields said.
“That plant will add 700 jobs,” Krebs said. “But if it’s on vehicles that won’t sell well, how sustainable are those jobs?”
Ford is highlighting other attributes of its electrified vehicles, promising “V8 power and even more low-end torque” with the Mustang hybrid and the ability for the the gas-electric F-150 to operate as an on-site power generator. Yet the higher relative cost required to electrify vehicles often drives up sticker prices and drives away tire kickers.
The impending inauguration of a president who’s has cast doubt on global warming makes it an odd time to expand an electrified vehicle lineup, Krebs said.
“In the current U.S. political environment, I don’t know that this is the right thing to do,” Krebs said. “The 2025 fuel economy standards could either be eliminated or stretched out over a longer period of time.”
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