Ford Focused On PHEVs, Not EVs: Won’t Be “Losing A Fortune” On Them

MAR 16 2014 BY JAY COLE 64

Ford:  Big With The PHEVS...Not So Much With The Pure EV

Ford: Big With The PHEVS…Not So Much With The Pure EV  (Ford plug-in family seen above at the 2014 Geneva Motor Show)

Ford Has Determined To Not "Lose A Fortune" On EVs (like the  Focus Electric) Before Their Time

Ford Has Determined To Not “Lose A Fortune” On EVs (like the Focus Electric) Before Their Time

We have had a couple years now to see how Ford operates when it comes to plug-in cars.  And it has been no secret that the company seems to have cut out its niche making quality PHEV offerings (plug-in hybrid electric vehicles), and not pure electrics.

The Ford Fusion Energi is one of the best selling plug-ins in the US, the C-Max Energi also does well.  In fact, Ford was the leading seller of plug-in vehicles for the Unites States last month with close to 1,500 sales.

However, their all-electric offering – the Focus Electric contributes little to their sales success, notching only 129 sales as a “built-to-order” product last month; and the 13th month in a row of just “one hundred and something” pure electric Fords being sold.

So it comes as no surprises that Mark Ovenden, the chairman and managing director of Ford in Britain, would lay all his cards out so flatly on the table.  For right now, Ford is about selling as many cars as they can – cars that people want, while tackling rising fuel emission standards.  And pure electric cars aren’t a big part of that equation.

Or put another way in his interview with This Is Money:

“If you want an electric vehicle then you can have one. We do the whole range of engines up to diesels, but people still have concerns. Electric cars just haven’t taken off…There’s no point in us getting behind it and losing a fortune. It’s got to be commercially viable. “

Ford's Lineup Of "More Efficient" Vehicles

Ford’s Lineup Of “More Efficient” Vehicles

Like all auto makers Ford has to deal with rising fuel mileage and emission standards, and the company sees easier routes than pure electric cars to get there.

“Emission standards are only going to go one way, so you could say that bringing out the wonderful EcoBoost engine – which is going into 40 per cent of our vehicles – has a far greater impact on the environment than a handful of electric cars.”

Normally after hearing quotes like these we would criticize an OEM for their stance, but in this case that is probably not fair.  Ford has indeed spent a fortune on plug-ins – just not fully electric ones, and for that they should be commended.

With the expected arrival of a Ford Focus Energi on the horizon, we can see that Ford is continuing to grow and expand its footprint in the plug-in market.  And if they want to take a pass on making fully electric vehicles for a few years until the EV business model (and battery technology) is more proven, while they lead the world in PHEVs…well, that is ok with us.

Now, how about that plug-in hybrid F-150 truck already?

ThisIsMoney, hat tip to EVFitter!

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64 Comments on "Ford Focused On PHEVs, Not EVs: Won’t Be “Losing A Fortune” On Them"

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Ford has a point about fuel savings.
I put together some charts to show the gallons of fuel saved for their new F150 aluminum truck and the fuel savings are huge.

Fords new F150 pickup saves more fuel than even the Prius lift back.

Here’s the chart and the accompanying assumptions the fuel savings shown are in MILLIONS of gallons of fuel.:

You forgot to show how many F150s are sold per year.

Also, it would be great if you could show the gallons of gas saved annually for each individual vehicle sold (annual gas saved per vehicle sold).

thx for pointing that out. I assumed 650,000 F150 sales.

If take 600,000 gas guzzling trucks and make them 20% more better you are at least going to save a few oil tankers of fuel.

The biggest danger to the F-150 is if Tesla comes out with a electric truck with a 300 mile battery range with supercharging in the same price range as the F-150 then the F-150 will go the way of the T-Rex.

Trucks are massive and have huge frontal area. They’ll need a good 120kWh to get 300 miles range, so similar price is a long way off, and you’ll need a 200kW supercharger to match the current charge time of a Model S.

Perhaps more importantly, trucks have more unpredictable loads, sometimes lugging twice their weight. I think PHEV is the only solution for the next decade at least.

So no, a 300 mile EV truck is not a threat to Ford.

But a 50 EV miles PHEV truck with diesel would be a huge threat to the exiting truck platforms….

So taking a $20k-ish focus, having a Canadian parts supplier cram in some aftermarket batteries, motor, and electronics, and selling it for $40k, but only making CARB-compliant amounts, and selling only 100 a month is “Electric cars just haven’t taken off…” Seems like a self fulfilled prophecy to me. If I were doing the interview I’d ask a follow up question – “So why is it that Nissan is consistently selling 20 times the amount of BEV’s that you are?”

I give them credit for making a decent range of PHEV’s but to say Americans don’t want BEV’s based on your half hearted first attempt to insulting.

The problem with the Focus Electric isn’t the quality of the vehicle, it’s actually quite good. One of the best deals in that segment.

Ford doesn’t want to market it because they can’t get the margin that they can on other vehicles. As battery costs come down, that will change and they will be eager to sell them.

They just won’t be leading the parade.

and also why GM doesn’t market the Volt.

I will argue that all day long! My 2012 Focus BEV was in the shop for 10 weeks out of the 17 total weeks I owned it! I lost $10,000 trading it in on a C – Max Energi. I am still trying to get Ford to cover the loss because of the “quality” of the car, and their refusal to replace the battery packs when the technician said to. Instead, they replaced everything else first.

BTW, the C – MAX Energi has been working quite well. The computer says I am currently getting 110 miles to the gallon. Not bad for winter weather.

What is the all electric range on a single charge?

of the C-max? About 20 miles, a bit less if it’s very cold out.

Yes, about 20- 23 miles IF you are not using the climate control. In cold weather, about 14 miles. My drive to work is 12 miles, and I can charge there also.
By pre conditioning, and using the electric seat I can stay comfortable.

Am in AZ, with a C-Max Energi and get 25-30 miles at 75 degrees..And I have 2 times the truck space as the Volt but less electric miles.

I purchased a used 2012 FFE and have had zero issues. The recall for SSN seems to have solved pretty much all of the problems with the car. Awesome car, I love it.

Ford and Nissan went two different directions with their millions invested in electrified vehicles. Nissan put all their eggs in one basket with the Leaf, which requires massive/expensive nationwide marketing to educate the public, along with building new manufacturing facilities. For a vehicle that only sells 20+k units annually. Ford spread their electrified vehicle investment across 5 different car models(Focus Electric, C-MAX Hybrid, C-MAX Energi, Fusion Hybrid, Fusion Energi) that also share ICE powertrains globally, that also share two high volume global platforms( Focus over 1 million, Fusion/Mondeo 400k+ annually). The massive economies of scale by using high volume ICE vehicles drastically lowers the electrification investment, lowers consumer pricing while increasing profit margins. Ford’s plan to offer an ICE, Hybrid and Energi version of just about every model of car, SUV and truck that gives the consumer the choice of model and various powertrains is a solid plan. With a Focus Energi MKZ Energi expected for MY2015, and New Edge and New MKX Hybrid/Energi, New Taurus Hybrid and Energi models are expected for MY2016. Along with a Focus based Lincoln 5 Door Hybrid/Energi. But much of this would not be possible, if it were not for the model/platform sharing plan.

Nissan sells only 20K units annually? Only in the US. The global sales number is much higher. I don’t remember the global Nissan number right now, but the cumulative total is over 100,000 (in just 3 years, so that’s at least 30,000-ish per year, and the first year was light, so…)

Please, please knock it off with your imaginary wishful cycle plan. There is no 2015 Focus Energi. There is no 2015 Edge Hybrid. There is no 2016 Taurus Hybrid. When you put these falsehoods out there as if they are fact, you are setting people up for disappointment. I want them to be real too, but they aren’t. Stop it.

Perhaps Nissan is also losing money? What if this thing doesn’t make economic sense for anybody? Last I check, on a GAAP basis, Tesla as a company isn’t making money either.

Like most new technology, it’s expensive at first and the costs come down as volume ramps up. It’s happening now with EVs (as I assume you know, Anton).

iCEs, already a mature technology, can’t enjoy that same price performance curve.

EVs are already cheaper on a TCO basis.

And there are the externalities. Like clean air. Domestic, renewable fuel. Not that those are important considerations or anything…

Nissan makes money on the LEAF. In fact, they are on the record as saying they’ve made money on every LEAF since 2011.

http://wot.motortrend.com/green-money-nissan-says-it-will-make-profit-on-2011-leaf-8533.html

Making profit on each LEAF, excluding initial R&D and tooling or NOT?

Nissan didn’t say.

That’s an easy one. The GAAP loss is because of how they have to account for leases. They have to build the car, but cannot book it as revenue that quarter. That has to be spread out over a period of 3 years.

Yes, your calculations do show it is much easier to register efficiency gains on inefficient vehicles.

Apples to Oranges comparison. What is the gain if people switch from Full size Pick-ups and SUVs to more efficient vehicles?

The numbers don’t lie and I don’t think it is apples to oranges. You go after the vehicles with the poorest MPG and the highest sales. CO2 is CO2. Who cares how you cut it and from where.

Jay has a point. Think what Ford could do in fuel savings if they put a plug on the F150 aluminum truck!

“You go after the vehicles with the poorest MPG and the highest sales.”

It’s hard to argue against math!

That’s why electric buses are such a great idea. They are very inefficient on a per vehicle basis, even though they are very efficient on a per passenger basis.

We once had a truck that got 13 miles a gallon and we did 70% of our driving in it. We then replaced it with a car that got 30 miles a gallon and did 70% of our diving in it. The car cut our gas bill down from $80 to $45.

I really think you are saving a ton of gas with the modern F-150 in that saving 20% more fuel from the worst gas guzzler is better then saving 20% on the most gas saving car on the road. Such I’m more worried about the truck that gets 13 miles a gallon vs. the Nissan Leaf. In that saving gas is far more expensive then electric power so I’m more worried about saving gas.

I am very curious to know if they are making money on the Energi cars. If so, how much?

I actually wish that CARB rules would allow manufacturers to produce just PHEVs if they wanted to. Lets face it, if the purpose behind CARB rules is help air pollution and CO2, which is better – A) Selling a thousand or two pure electric cars per year, or B) selling tens of thousands of PHEV cars every year?

A PHEV is much easier for the average Joe to accept, easier for dealerships to sell, and easier for manufacturers to make profit on.

I’m all for pure EVs, but PHEVs are a much easier sell and after more and more people start driving them, they’ll crave more and more EV range until eventually they’ll go to an EV anyway.

You have a good point David, and that’s why PHEVs are outselling BEVs now. But there’s no getting around the fact that a car with two drive trains is going to be several thousand dollars more expensive to buy, and much more expensive to maintain than a single drive train car. CARBs requirement is for ZEV, they don’t care how you get there. By pushing the manufacturers to sell some amount of ZEVs, they ensure that: 1) the manufacturers invest enough in ZEV R&D to push the technology forward. 2) consumers get introduced to ZEV technology and can begin to understand how the dynamics of use are different 3) infrastructure can start to be built out that will ultimately lead to widespread deployment There are a lot of lessons to be learned along the way. Mandating limited (and increasing) deployment makes sure that happens. California is not perfect, but I have to say that I’m very proud of the vision and leadership shown by the administration to lead the way toward responsible environmental stewardship. I wonder how long it will take the rest of the 40 non-CARB regulation states to connect the dots from air quality to health care costs,… Read more »

It’s not about having 2 drivetrains instead of 1. It’s about needing a smaller battery — say anywhere from 7 kWh to 17 kWh — instead of one that’s 23 kWh or 40 kWh or 85 kWh. Because of the smaller battery needed, a PHEV can still be cheaper to make, yet provide for ease of long distance travel (and please don’t give that lecture about having to plan to stop at special locations where “superchargers” are located).

If batteries get cheap enough, TCO will win if ICE / PHEV is strictly calling the engine on non-daily drives. The 7kwh to 17kwh doesn’t work for way too many folks, and almost assures more expensive trips for service for vehicles whose engines are on and off.

For a very short period of time, a few more years, that will be true. A $5,000 ICE and transmission will be cheaper than an additional $6,000 30kWh battery.

But as batteries continue their inexorable downward price trend, there will be a tipping point, and then it will be over for the ICE.

Ok, I’ll skip the lecture on EV road trips and charging technique, not that I was planning to give you one.

But having driven from Seattle to San Diego, I can tell you that the Tesla Model S is the best road trip car I’ve ever driven. And I’ve driven some really nice cars.

I usually fly privately, but driving the Model S is so much fun I’ve started to take road trips again. I didn’t think that would ever happen.

When you set the cruise control to 75 MPH, there is no longer a drive quality benefit to an electric car. It’s not any smoother or less noisy. The only benefit — with the Tesla — is that you can refuel for free. Of course, that’s a big one, but you also have very limited places to refuel, and it takes 20+ minutes (if you don’t have to wait for someone ahead of you), and if you get diverted because of a freeway closure (snow storm by the Grapevine, etc), you can be in deep trouble. The main advantage by an EV is in local/metro driving, where it’s a lot smoother and quieter.

Electric-Car-Insider.com

Lol, Anton, you know this because you’ve taken how many 1,000+ mile trips in the Model S?

I invite you to take a road trip in the Model S. I’ll be driving all over the country this year.

You’ll be surprised at how much different it really is.

My contact info is on my web site.

“$5,000 ICE and transmission will be cheaper than an additional $6,000 30kWh battery”

I don’t think any of those PHEV’s powertrain cost $5K to make.

They might sell it to you at $5K price, but they are certainly NOT $5k to make….

ICE is cheap to make. Transmissions are cheap to make. Typical PHEV ICE/eCVT is barely $2K in cost….

I’m not sure I buy the argument about the two drivetrains being more expensive. It greatly depends on battery cost. With a PHEV like Ford’s Energi cars, they are basically using the same drive-train as their regular hybrid vehicles and just putting in a bigger 7kwh battery. I suspect that is much cheaper than designing a whole new car from scratch and putting in a huge 24Kwh or more battery pack.

That would be my guess, too. And I assume that’s why they are doing it.

And meanwhile, I am driving my C-max without worrying about range, and it turns out that I am mostly burning electricity. But the great thing is, I don’t have to care. I just get in the car and drive, and if I run low on power, i stop at any gas station for 10 minutes and fix that.

By the way, I would be quite happy with a Tesla instead of the C-max. But it cost more than twice as much. So I drive a C-max.

What’s important to understand is that the comments are about the UK, from Mark Ovenden, the chairman and managing director of Ford in Britain.

This is NOT the direction of Ford globally. Especially not the direction in the U.S.

Due to a recently depressed and now recovering economy and auto market in the relatively small UK market, Ford delayed the launch of hybrids, plug-in hybrids and EV(2015 Focus Electric) until the end of 2014.

In the US, here are a few of the projects Ford is working on NOW based on the Ford 2013 Sustainability Report, that directly impact the U.S. market:

– Efficient heating, ventilation and air conditioning for HEVs, PEHVs and BEVs (expected to see with 2015 FFE/C-MAX/Focus Energi/Electric and Fusion models)

– Continued weight reduction actions via advanced materials(aluminum/magnesium/titanium)

– Increase volume of HEV and PHEV technologies(expect Focus HEV, Focus PHEV, MKZ PHEV for 2015)

– Evolve BEV and PHEV ecosystems (next gen battery tech?)

– Optimize engines/vehicles for higher octane/alternative fuels

– Introduction of fuel cell electric vehicles (2015/16 model?)

Ford is just making Elon’s point for him why he doesn’t want to sell through dealerships. If you can’t get the manufacturer behind it, you are not going to get the dealership behind it either. Ford and their dealerships primary concern is making money. Elon and Tesla want to make money, but it is not the primary concern.

I would say that Ford is more aggressive with plug in cars then Toyota or GM. In that Ford has officially said that they want to make their C-Max plug in cheaper then a Prius C.

If I where going to rate Ford on Plug ins I would give them a C+ to B- do them not giving out mixed feelings like GM who would get a D and Toyota who would get a F.

Tesla of course would get a A+ in that they are really out there with their ideas.

Ford has no plug-in vehicles. They have cars they added batteries to, that don’t go very far.

If they didn’t lose the passing grade for misrepresenting fuel mileage, they lost it a couple weeks ago when Paice sued them and showed it wasn’t Ford’s R&D in their hybrids, in the first place.

eh, it turns out that I rarely drive more than 20 miles at a time. And some of the places i drive to have electricity. My C-max is doing much more of its driving on battery than I expected.

I have a friend with a Leaf. He has to plan his life around where and when to charge it. I don’t want to spend twice as much time getting away on vacation, I like being able to hop in my car and go where I want to go. The only pure electric vehicle on the market with enough range that I could use it without significant impact on my lifestyle is the Tesla.

And a Tesla costs about twice as much as the C-max or the Volt. Yes, if and when batteries get a lot cheaper, lots of us will be happy to buy all-electric. Until then, expect energy conscious drivers to drive small ICE cars, and hybrids, and PHEVs, depending on their driving patterns. Because those are cars that make sense today, and are competitively priced with other vehicles.

And you’re saying these cars with batteries DON’T HAVE PLUGS? I mean, by definition, the term “plug-in car” means any car that plugs in to recharge.. Guess what? Ford has several of them. Like it or not.

I went to Ford before I got a Leaf. My other car is a Ford (a Ranger), I go there all the time for service.

They had two EVs on the lot. I have seen a dead mackerel marketed with more enthusiasm.

Ford and GM have been playing follow the leader for a while now. Japan kicked their rears with hybrids, now they want to do hybrids. Always the last war, the last thing. At least the all AL 150 is new. An electric version of that would be awesome.

Last time I looked, Japan isn’t “leading” the EV war.

Tesla, the American company is….

With the continuing urbanization of the worlds population, you would think that the demand for trucks would decline. I think Ford is making a good decision going with all aluminium, with economies of scale they just make more on hybrids since they make more of them and can charge more for them than a pure electric.
Just conjecture, but I think fully half the people that buy a truck don’t really need one, and a smaller vehicle would serve them just as well. If they do buy a truck then greater gas mileage would be a selling point, whereas real truck people I have talked to, scoff at an all aluminum truck, saying things like: “that’s not a real truck.” At which point I internally roll my eyes and remain silent. I have learned that sometimes not saying anything is best. I will just post something. In that way I at least felt I told someone about it, without having to argue about whether it’s a fing truck or not.

So what you are saying, is that people either don’t know what they should want, or they are stupid, or their choices should be restricted, or? If I want a truck, I should be able to buy a truck. I know what is best for ME. How would you like someone else deciding what is best for YOU? This is not a one-way street.

I didn’t see anything in his post suggesting that people NOT be ALLOWED to buy what they want. But he is correct, most trucks are used as commuter vehicles simply because people LIKE them, not because they NEED them. Most 4×4 “off road” vehicles are never driven off road, rather driven to work and the grocery store.

As someone that moved away from the city to a much more rural area, I would not make the urbanization assumption. Many of the roads nearby are unpaved and would be hard to traverse when the weather makes them muddy. Most SUVs could not even handle them because they are basically cars with a raised suspension. I would love to see more of an attempt to electrify trucks and improve charging infrastructure in rural areas. Even though the higher highway speeds are not ideal for most electric vehicles, a plug-in hybrid pickup truck would be great for local farmers.

“not a real truck”

Ford anticipated that, and thickened the bed of the trunk until it had the same puncture resistance as a steel bed. This is the only measure of “real truckness” that counts.

I think that what too many EV enthusaists overlook is that in the U.S., there is essentially no market (beyond them) at the moment for the typical ~80 mile BEV at their current MSRP; they are only salable with government incentives. The fact that Tesla can sell as many Model S’ as Nissan can sell 1/3 to 1/2 as expensive LEAFs should make that point.

The average person wants utility without anxiety at a reasonable price, and they aren’t motivated by ideology. Until battery prices come down and range goes up, there is no market for these cars without government perks and subidies, which will start to expire in just a few years for some companies.

That being the case, IMO Ford is on exactly the right track in concentrating on PHEVs with the smallest possible battery (and thus the lowest price) that provides adequate range for a large % of people.

I’ve been saying the same thing for a while now. If there were no government incentives, the Energi cars would be the most popular plug-in vehicles due to price alone.

Here is an interesting commercial from Ford of Europe for the EV Focus.

CherylG, loved the video! I’ve never seen a Focus EV commercial before.

Hard to see how the FFE can compete in England. They’re asking more for it than an i3, let alone the LEAF.

It will not sell, then they’ll say, “see, there’s no market for these cars.”

@Ford: You are losing money on BEVs because you are not doing it right. For further reference see Tesla, Nissan and BMW…

100 years ago Henry Ford’s mass-produced Model T with an electric starter and long range helped sideline the electric car. Now the tables have turned and the EV will sideline ICE cars. What’s the matter Ford…sour grapes?

I thought this article stated that Ford was the number one seller of plug ins last month?

How does being the number one seller of plug in equate to sour grapes?

I should have specified…it’s their position on 100% electric cars.

Unfortunately they are not alone with that position. It is rather prevalent.

Henry Ford sold his cars with a crank! GM was the first to sell cars with a starter. Charles Kettering invented the starter system, and later founded Delaware Electric Company (DELCO). Clare Ford never drove a Ford car. She drove a Detroit ELectric. Is that enough proof that Henry (who was Thomas Edison’s friend) never believed in electrics?

This interview is a classic demo of why all big automakers should be taken with a grain of salt when it comes to EV/PHEV or in general, energy-efficiency policies. “Electric cars just haven’t taken off…There’s no point in us getting behind it and losing a fortune.” Haha, tell that to Elon Musk. No, actually he’ll tell you when he cleans your clock in a few years if you don’t accelerate your EV/PHEV adoption rate. “you could say that bringing out the wonderful EcoBoost engine – which is going into 40 per cent of our vehicles – has a far greater impact on the environment than a handful of electric cars.” Yeah, and if you stop pushing gas-guzzlers onto consumers in your 24/7 TV ads as if there’s no tomorrow – it will be an even greater help. ICE hybrid technology has been around and viable for 15+ years, how come it hasn’t yet made it into, say, your F-150? I challenge the notion that Ford has spent “a fortune” on PHEVs. I’m happy they’ve done more than e.g., Chrysler, and they are better at marketing their PHEVs than GM is at marketing the Volt (now, *that* is a low bar… Read more »

In other words: in Ford universe, we should be grateful to them that they’re finally moving – in 40% of their vehicles, mind you – to the kind of energy-efficiency that automakers in Europe and Asia have been delivering decades ago.

I drove a leased Renault Megane in 2001-2002. It was a powerful, convenient midsize, lacking nothing that analogous American cars had at the time. And it did some 40 MPG on average.

Thanks for nothing, Ford execs.