Detroit Free Press – Ford quietly rolls out Focus Electric
APR 23 2012 BY MARC LEE
Not surprisingly, the DFP really is a go to source for news about cars, be they gassers or electric. Some interesting bits from an article entitled “Ford Quietly Rolls out Focus Electric.”
“The marketing of the Focus Electric is to people who buy electric vehicles, not to you and me,” Jim Farley, Ford head of global marketing, said in an interview. “We’re focused on the people who buy them.”
Is the Head of Global Marketing for Ford saying he’s not interested in EV? That’s kind of funny. Don’t think that is quite what he meant, but some have interpreted it that way. Ford is instead trying to replicate what GM backed into with the Volt. If your initial owners are those who believe firmly in EVs, you are going to have this core of wildly enthusiastic owners out there singing the praises of your car. You can’t beat that with a stick.
The Chevy Volt is the highest rated GM car ever. Including Cadillac. And was at least initially the highest rated car under $100k…ever. The car is quite good, but those numbers are perhaps more a reflection of the initial owners than they are of the car itself. Thus it makes sense that Ford would target their adds to this group of EV zealots, who will invariably love with they are offering.
Also this lets GM and Nissan do the heavy lifting of making people generally aware of EVs, while Ford can target ad dollars to those venues used by people who are actually intending to buy these things.
The only danger I see is that Ford allows GM or Nissan to become the brand that is associated with EVs, much the same way Prius is the brand associated with hybrids. Prius sales dwarf all other hybrids sales.
Automakers have geared up to make EV and plug-in hybrids more quickly than consumers have bought them.
This is in lock step with Ford’s notion that they will build EVs like Dell builds computers, to order. I understand this will save Ford money, but if Ford wants this to translate into more sales they have to incorporate the other part of the Dell model… lower price than your competitor.
This model worked for Dell because of Moore’s Law. Whereby CPUs and Ram were doubling in speed and halving in cost every 18 months. Performance increases and price drops for EV batteries are good, but not even remotely near Moore’s Law good. Since 2009 battery prices have drop around 30% according to reports. For Dell, just in time assembly of the computer and shipping directly to the consumer allowed them to have the best pricing on the very latest gear.
If Ford can truly use this method of manufacturing to present as good a value proposition as Dell did, then it will work, but right now the Focus Electric sells at a premium. Ford believes the feature set warrants that premium, but Ford is hedging their bets to sell less than 5000 FFEs this year so we will not get a true measure of demand until next year at the earliest.
The other trade off for Ford is that many people buy a car that is on the lot right now. They have never, and will never, plunk down money and wait for a car to arrive. The Ford model would appear to lose that sale.
A Ford survey last year showed 61% of Americans are interested in buying a hybrid or electric vehicle but until gas reaches $5 a gallon, few will buy one.
This comment was typical of statements throughout the article which generally suggest that Nissan and GM have capacity well beyond what the market can support at this point. Certainly that is Ford’s view and quite correct. The question here is, when is the tipping point going to come for EVs and will Ford really be able to handle it? It is easy to say “we can build 10,000 a month whenever we need to.” But invariably getting to that level involves some learning, which takes time.
For the Prius, introduced to the world in 1997, that tipping point took 7 to 8 years looking at the world market sales. EVs appear to be on faster adoption curve than the Prius which sold only 3000 units its first year. Perhaps the tipping point comes in 3 to 4 years for EVs.