Ford To Focus Electrification Efforts On Already Profitable Vehicle Segments – Trucks, SUVs

SEP 24 2016 BY ERIC LOVEDAY 33

Ford Transit Cargo Van

Ford Transit Cargo Van

This could be BIG news for fans of trucks and SUVs.

A couple of weeks ago, during Ford’s annual Investor Day presentation, the topic of electrification was brought up and Ford’s top brass had some answers that are intriguing.

According to Ford, electric vehicles (BEVS and PHEVs) are expensive to make, so Ford’s strategy will be to focus on already-profitable segments so that the automaker’s EVs aren’t money losers for the company.

CEO Mark Fields stated:

“We want to become a top player in electrified solutions, and I call it moving from a compliance mind-set to one of leading where we can win, such as with our commercial vehicles.”

But it’s these statement from Ford product chief Raj Nair that really caught our attention:

“Trucks, commercial vehicles, sport-utilities, and performance vehicles are all parts of the market where Ford has a strong position, and where it currently generates big profit margins. Those are the segments where Ford will focus its electrification efforts, on the theory that those customers are most likely to buy into Ford’s innovations — and are most willing to pay for them.”

“In other words, rather than building an electric vehicle just to satisfy regulatory requirements (what Fields meant by “compliance mind-set”), Ford is planning to bring electric drivetrains to market in ways that will make customers feel they add significant value.”

“Think about a plug-in hybrid Ford pickup that can summon its electric motors’ immense torque to start a heavy load moving, or an SUV with an electric motor at each wheel that can adjust its traction on the fly in slippery conditions, or a plug-in hybrid Mustang that runs on electric batteries in normal driving — but that instantly starts its powerful gasoline V8 when you floor it. Or a fleet of electric commercial delivery vans that operate quietly and don’t ever need fuel, just a nightly recharge.”

Sure sounds interesting to us and electrification in these segments in rare still today, so we’re intrigue by Ford’s approach.

Source: Motley Fool

Categories: Ford

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33 Comments on "Ford To Focus Electrification Efforts On Already Profitable Vehicle Segments – Trucks, SUVs"

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Blah, blah , blah.
It’s all talk. When push comes to shove they won’t want to dilute the profit in their money making truck and large SUV product line. It’s just easy to talk the words though.

Commercial customers have thousands in federal/state ‘incentives’ to pay for the additional up front cost of hybrid tech, where it can almost be a wash for them, while offering huge long term savings for the business.

This could increase the take rate massively for plug-in vehicles for the F-150 alone.

Note: Ford sold over 900k F-Series trucks and over 230k F-Series/Transit commercial van to mostly commercial customers in 2015 alone in just US and Canada.

Less than 2% of those sales going to plug-in or full Electric Vans would he more sales than Nissan Leaf for all of 2015.

The key here is offering electrification on the highest selling segment models, with the highest margins, while reaching the highest sales volume.

The company I work for has dozens of salesmen that drove 60-110k miles a year in vans and half ton trucks. They do not get rid of the vehicles until they go over 400k miles, and only replace them when a major repair is needed. With all that said, pretty sure the company would buy hybrid trucks and vans if it paid for its self. At 12-16mpg, it’s not hard to recoup fuel savings if it improves to 18-22mpg over the life of the vehicle.

Very negative George.
How many cars do you build or sell per year?

I’d love to see a plug-in Mustang convertible. Give it 35+ EV miles and I’m in.

I second that! Minus the convertible part; give me a coupe…

More PR.
The PR dept needs a long vacation.
Whereas, CEO Fields could call his battery supplier tomorrow, and get his products back into competitive position.

Tesla will sell 50,000 electric pickup’s before Ford.
Guaranteed, and Tesla’s pickup isn’t even on the drawing board.

Also, Ford lags the market in Automatic Cruise Control, and automatic collision prevention. Mark Fields looks out of touch with the market.

Just mentioning one vehicle, 2017 Fusion has the smart cruise that can come to complete stop and resume again. New Continental offers the full automatic breaking.

Ford has offered this tech and more(road sign recognition, active city stop, etc) for years, but the US was not ready and did not want to pay for the features in non-premiium vehicles.

But all that tech is being integrated into the Level 4 Autonomous cars.

No we have already seen a new F-150 with with a plug port on the passenger side front, running in electric mode. That’s expected to be part of the 2018 model year refresh for 2017. Which tells us that Ford is far along their efforts with the new RWD/AWD hybrid drivetrain. Which ties in with the focus on RWD/AWD commercial vehicles(Transit Connect/Transit), RWD/AWD pick-up trucks(F-150) and the next gen RWD/AWD Mustang sports car. But I would say that midsize and compact cars won’t be left out. Because the push for electrified commercial vehicles, is what will make the electrified compact and midsize cars more viable/profitable. Which makes me think with the next gen Escape coming, Ford is about to do an Escape Electric, with electric motors on all 4 wheels, increasing cargo capacity. If we remember, in 2013 Ford and Schaeffler built the electric eWheelDrive Fiesta with electric motors in the rear wheels. It sounds like an AWD version of the next gen Escape could already be in Ford’s plan. But Ford has to strike while the compact SUV market is hot. With the New Escape and New Focus sharing the same platform, I also expect a Focus 5-soor to… Read more »

Wow. Where did you get that info on Gen 2 Escape?
We’ve been literally waiting for years for that to show up?

I beleive bloggin is the same bloggin forum editor over at http://www.fordinsidenews.com/index.php?page=active_topics

Bloggin said:

“…if the motors are in the wheels… the technology can work on any model in any segment.”

In-wheel electric motors are one of those ideas that look good on paper, but in practice don’t work so well. We have seen many announcements over the years of such EVs, but so far as I know, none of them have actually been put into production.

Apparently the combination of pounding from wheels bouncing on the road, plus salt, mud, etc. from the road getting onto or into the motors, causes too many problems. Putting the motors down where they’re not cushioned by the vehicle’s suspension or protected by the underbody, just isn’t a good idea.

Not only that, it would also add a lot to the unsprung mass, which would affect handling.

Individual motors for each drive wheel can be done by simply moving the motors inboard (think Jaguar E Type inboard disc brakes. And connecting it to its driven will do a half shaft pretty much like what Tesla does if the Tesla had two Motors in the rear as opposed to the motor and the motor inverter the rear wheels could be driven independently

Actually I think Mercedes-Benz has already done it by having four electric motors all mounted in board where they can remain static and aren’t subject to the rigors of suspension travel and wheel movement they’re connected via half shaft. they came up with some awesome torque vectoring and a killer performance car I think it’s the 300 e or some such thing there were a couple that were built

MB SLS EV and Audi R8E have four inside motors.

Well, it’s optimistic to hear a Ford exec talk about putting a PHEV pickup into production. I certainly hope they will. And a commercial BEV or PHEV delivery van is certainly something that can find a market, altho probably a limited one. (Since neither UPS nor FedEx have moved to electrify their delivery van fleets, I think it’s still too soon for mass adoption.)

But when they start talking about using in-wheel motors on a production car… then I know they’re just blowing smoke. Nobody has used in-wheel motors on a truly mass produced vehicle, and I doubt that’s going to change. Mitsubishi tried in-wheel motors on the preproduction iMiEV, but switched to an inboard motor for the production version.

Also, the small electric ranges of Ford’s current PHEV offerings do not give me much hope that a Ford PHEV pickup would have much of an electric range.

I wish I could be more optimistic, but my experience over the last several years is lots of promises from various auto makers regarding compelling EVs, and darn few actual models put into production.

Interesting. To some extend BEVs, PHEVs, and EREVs make their own profit margins, at least in CARB states. For example, every BEV with a range over 200 miles gets $14K in ZEV credits. A PHEV or EREV with a range over 50 miles gets $7K in ZEV credits. Not sure if there is a $14K profit margin in an F150. That’s significant since it’s unlikely Ford is thinking about an F150 with a range of 50 miles or more.

It’s also a geographically limited strategy. NA is unusual in that most of the money is made selling trucks and some SUVs. The rest of the world isn’t like that.

That said, I’d love to see Ford move forward on this track.

I beleive the average F150 profit margin is around 10k or even over…
So yes Ford prefers to sell trucks and not cars but neglecting cars is extremly bad for long term business…

I’d love to see the demographics for car vs truck buyers. I strongly suspect it’ll prove you right – by showing young buyers don’t want trucks.

I Keep seeing an all electric UPS delivery van where I live.

Both UPS and FedEx have deployed a small number of electric delivery vans for testing. But obviously they have not moved to mass adoption. If they did, it would be huge news for the EV revolution!

Ditto the U.S. Postal Service. But I expect them to lag behind UPS and FedEx. USPS is hopelessly outdated, and likely to remain so.

I wonder if range extended (i.e. long range PHEVs) won’t be what UPS and FedEx will use mostly when the time comes. A 150-200 mile BEV would be nice, but someone told be once (or I heard it) that the challenge with using BEVs is that during the holiday season drivers basically double their daily miles.

Very noticeable in these statements by Ford… All the EVs mentioned are PHEV. No BEVs.
I’d like to see Ford make a serious effort on both.

When Ford has their stock fall another Nine Billion Dollars, and Tesla stock rises another Nine Billion Dollars, then the two shall meet in a market valuation of $40 Billion each. Then expect to see EV pickups from both companies going head to head. Until then, expect Ford to play along, with all of their existing market share and EV promises. Ford in just a few years, is going to be on the receiving end of this Tesla disruptive technology cycle. Hope Ford is hedging their bets behind closed doors!

What happened to the Ford Model E BEV?

2019 is the year that it’s said to enter production.

Awesome! Can’t wait for my PHEV Raptor that will go 9 miles on battery!! *sarcasm*

Yeah, that PHEV Raptor will come with no space in the pickup bed because they’ll fill half of it with the batteries for those 9 miles.

I find it truly pathetic that in Colorado with the incredible state incentives that people pick the regular Hybrids of the Fusion and CMax over the Energi models which are cheaper after the federal and state credits are applied, but to a lot of people that lost cargo space to the batteries as a result of poor design decisions is the deal breaker, even though it is not needed most of the time.

Hopefully Ford can prove us wrong, and actually move their efforts along. I still say pure electric or bust, just need to move the fast charging network along.

It’s a good strategy for delaying electric cars. By doing a minimal electrification of a volume model like the F-150 you get much more credit(s) from CARB than you deserve, at a relatively low cost. The much improved torque from a standstill improves the vehicle, and you can continue to sell your very environmentally unfriendly vehicles. There is however some political risk. Sooner or later somebody will begin to assess the actual effects of the CARB credits. That will lead to pressure to either stop handing out support to PHEVs, or at the very least modify the rules so that merely having some electric capability, however small, isn’t enough. Building PHEVs with decent all-electric range is the most expensive of all, if we believe Toyota Prius’s former chief designer. BEVs already could be made at cost parity with ICE according to the same man. It’s not expensive components but low volume that causes today’s BEVs to be more expensive to make. Another problem for Ford is that several other incumbents won’t go the route they are going, but will make BEVs instead. It won’t be long before the BEVs have the cost advantage, and then Ford must choose between losing… Read more »

“or a plug-in hybrid Mustang that runs on electric batteries in normal driving — but that instantly starts its powerful gasoline V8 when you floor it.”
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This is dumb in my opinion. You get more acceleration from electric drive than a V-8. If you want to compete in luxury sport cars, just make a 200+ mile BEV. A top of the line Ford Mustang is $62K. They should be able to make a sports-car BEV that beats it in every metric and still costs less.

If they are actually serious in this as a commitment, they could steal away the couple of sales that would otherwise go to Via Motors and put Bob Lutz out of business.