Ford Ups Electric Car Commitment: Simplified Lineup, Investment Shift

2 weeks ago by Steven Loveday 28

Ford

In addition to a 33.5 kWh battery, the new 2017 Ford Focus Electric adds DC fast charging

Ford’s new CEO has finally revealed the company’s future strategy and it includes a commitment to electric vehicles.

Ford CEO, Jim Hackett, began his tenure back in May after the automaker displaced Mark Fields. It was Fields’ time to go for many reasons, which we won’t address here, however, some information points to his lack of commitment to future vehicles. Hackett seems to have a different mentality. He told investors this week in New York:

“Ford will prepare for disruption by becoming fit.”

In order for OEMs to weather the transition and do it right, money needs to be saved up front. Moving to electrification and eventually to pure electric vehicles isn’t easy, nor is it cheap. Hackett has established a plan to account for this. The automaker is set to cut company costs by $14 billion over the next five years to set money aside for a substantial investment in electric vehicles. Meanwhile, Hackett also aims to boost profits along the way.

Ford

Ford CEO, Jim Hackett (Image Credit: flickr via Maize and Blue Nation)

The new initiative includes streamlining Ford’s current vehicle lineup. The automaker will dial back passengers cars and invest more in trucks, crossovers, and SUVs. Additionally, vehicle packages and configurations will be substantially limited. USA Today explained:

“Instead of 35,000 possible versions of the Ford Fusion sedan, for example, Ford will offer 96. Instead of 2,302 versions of the Escape SUV, Ford will offer 228.”

Of the $14 billion in savings, $10 billion will be saved in material costs and $4 billion from engineering cuts. The carmaker aims to decrease vehicle development time by 20 percent. According to Hackett, all of this will lead to 13 new electric vehicles over the next five years. He said:

“We have too much cost across our business.These are real improvements to the business.”

“We’ve not delivered on our top-line growth expectations on our target of an 8% operating margin and over the past seven years we’ve averaged a 6.1% margin and that’s simply not good enough, so that performance gap of 2 points is worth billions in value I can tell you.” 

All in all, Ford’s plan shows a 32 percent reduction in ICE vehicle expenditures from 2016 to 2022. The automaker will invest $4.5 billion into electric vehicles globally over the next five years. Models slated for development include the Mustang hybrid, F-150 hybrid, a Police Responder hybrid sedan, Transit Custom plug-in hybrid, an autonomous vehicle hybrid, and a fully electric small SUV. The electric vehicle plan will also spawn a new group coined “Team Edison”.

Hackett enjoyed much success as CEO transforming Grand Rapids-based Steelcase office furniture company. He was also the chairman of Ford’s Smart Mobility subsidiary and has notable ties to Silicon Valley.

Source: USA Today, Ford, Detroit Free Press

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28 responses to "Ford Ups Electric Car Commitment: Simplified Lineup, Investment Shift"

  1. bro1999 says:

    “Mustang hybrid”…..that just sounds wrong. Fully electrify that thing at least.

    1. David Murray says:

      Well, if they can give it great performance and AWD using hybrid system, that’s a selling point!

    2. Mark.ca says:

      If they are not careful they will end up with a poney.

  2. leafowner says:

    The plan sounds like the company wants to be a distant 3rd fiddle in the US car game (NOTE: I DO NOT consider Fiat/Chrysler a US brand as they are owned by an Italian company — and they will likely be gone in 15 years regardless….). within 15 years it will be GM, Tesla, Ford in the US……25-30 years I’d expect Tesla will leapfrog GM as well.

    Once Tesla introduces the all electric Pick-up truck, it will be a swift death for Ford and it’s honey hole….

    GM seems way more serious about the electric conversions….hybrids are complex and costly stop-gap.

    1. Counterpoint says:

      Once Tesla introduces an electric pickup, things may get interesting. But there’s a ton of brand loyalty to Ford, which is why their F150 pickup has been the best selling vehicle in the country since before I was born. I wouldn’t count them out.

    2. pjwood1 says:

      -People tow, dropping efficiency by half, or two thirds.
      -True utility vehicles go on more random excursions
      -SUVs inherrently consume more energy/mile

      With all this optimism about Tesla’s all-battery pickup, are we thinking just 100KWh will do it? I don’t think BEVs are going to have as easy a crack at this segment.

      1. Pushmi-Pullyu says:

        I agree, I just don’t see Tesla competing in the full-sized pickup segment for several years, at least. I predict Tesla’s pickup will be a small economy size, one suited for a battery pack that’s only 100-120 kWh.

        I think those who imagine Tesla competing with the “macho” pickups, those oversized ones designed to look like semi tractors, are going to be quite disappointed, at least for several years, and possibly forever. It’s going to take quite a shift in American culture before the kind of guy who feels the need to drive a “macho” pickup will pick one which doesn’t go “VROOM! VROOM!” when he presses the accelerator.

        1. Charlie says:

          To say nothing about the lifted truck aficionados who feel vindicated by Hurricane Harvey…

    3. SJC says:

      A PHEV F150 might sell well.

  3. Aledore says:

    They need to step up and build awesome full electric cars. I own a Tesla, and the fit and finish and build quality are poor, but I wouldn’t trade it for anything else out there. Electric is just so much more convenient than gas. Who wants to stand out in the bad weather pumping gas every week or two?

  4. Alok says:

    Plus:
    he said:
    “Ford is reducing internal combustion engine capital expenditures by one-third and redeploying that capital into electrification – ON TOP of the previously announced $4.5 billion investment.”

    Minus:
    a non-BEV (hybrid or whatever) autonomous vehicle looks like a really absurd thing, to me. I think I heard that only from them.
    Hope they change that.

    But it’ll keep on improving…
    I wish him success in a fast shift to BEVs.

    —-

    Many here might disagree, and maybe many agree, but I think that with a proper charging infrastructure there’s already no more need for PHEVs. At any level. They made sense, till now. True – as I said: with proper infrastructure. So, more and more focus on charging infrastructure is needed.
    Urgently.

    The future is bright !

    1. Pushmi-Pullyu says:

      “Many here might disagree, and maybe many agree, but I think that with a proper charging infrastructure there’s already no more need for PHEVs. At any level.”

      If you’re willing to wait for 30-45 minutes to charge your car on a long trip, every 150 miles or so, then more power to you! But the average first-world car buyer simply isn’t going to put up with waiting that long, even if it’s only a few times per year. BEV fast-charging times are going to have to be brought down to about 10 minutes or less before gasmobiles, or PHEVs, become obsolete.

      There’s a reason why a Tesla exec once said that they want to get charging times down to 5-10 minutes.

    2. mx says:

      The east coast has a joke of a charging infrastructure. Extremely few high speed CCS’s.

      For the east coast and rural America a plugin-hybrid makes sense. But, for big city small business a fully electric pickup makes sense, and more fun.

  5. Lou Grinzo says:

    Watching the legacy car companies slowly peel open one eye and notice that (golly!) Something Big Is Happening With Electric Cars! is painful. If someone wants to jump in here and criticize me for bashing them when they doing the right thing, just because they’re not doing it fast enough for my taste, then have at it. At this point, this long after the Leaf went on sale in the US, announcements of grandiose plans to Get Serious About EVs are hard to stomach.

    I’ve made the comparison on this site before, but I think it’s worth mentioning again: The current PEV scene, especially in the US, is startlingly reminiscent of the early days of the PC revolution. Computer professionals and hobbyists (I was both at the time) agonized over every rumor and product announcement. We all knew that PCs would keep getting cheaper and faster, with much more RAM, more HD space, better graphics, better communications, etc. But in the short run it felt like every company was walking through foot-deep mud instead of running on pavement.

    1. Pushmi-Pullyu says:

      “…announcements of grandiose plans to Get Serious About EVs are hard to stomach.”

      While I appreciate your sentiment, at the same time it’s nice to see that Ford is finally at least talking the talk. Pretending that they won’t eventually have to walk the walk regarding switching to PEVs (or go bankrupt) was what I found hard to stomach. Nice to see Ford has finally progressed beyond that point.

  6. Spoonman. says:

    Maybe they should do some research into how to make the trunk of the FFE useful.

    Also not sure why they didn’t put improved batteries in to the Energi cars given the advances since they started.

    My 2013 C-Max Energi lets me do nearly everything on plug-in power, but it’s clearly an aging setup.

    1. Vexar says:

      The FFE is a bolt-on approach to building an EV. The fact that they basically shoved batteries into the trunk suggests it was about as robust as a hobby conversion of a standard Ford Focus hatchback. I remember the first time I saw one, making a specific visit to a Ford dealer in Eden Prairie, MN. What stood out about the experience was that the sales guy was more interested in my Tesla in the lot than telling me about his car.

      Ford could easily make a Mustang EV. They could buy out Bloodshed Motors (of Zombie 222 fame) for $12M with a requirement for their staff to stay on for 36 months. Ship those guys 3 Mustang “gliders” and battery dev. kits from Samsung. Tell them they have six months to do 3 builds, and send an automotive manufacturing expert to shadow/support. After the six months are up, they can review the results, do a tear-down of the vehicles to figure out how to turn manual assembly into factory work, and then start their soft tooling inside of another six months.

      It isn’t the work that is hard, it is the change.

      If Ford were really smart, they would have done this three years ago.

      1. Oswald says:

        lol where did you get that manufacturing process from North Korea? I guarantee there’s more work involved in literally any manufacturing process for any product in the developed world then what you just described, let alone a vehicle.

        1. Vexar says:

          The guys at Bloodshed have already built some one-off vehicles, so the learning required isn’t going to be there. It will be on the manufacturing side. Tesla went from nothing to selling the Roadster in four years. I can’t imagine Bloodshed’s know-how is behind Tesla of 2004, especially since they are mostly building with COTS parts.

          To make a truly revolutionary Ford Mustang EV would require a lot more work, including a complete chassis redesign, but if we are after mirroring the effort level of an FFE, I do not think my wild, inexperienced speculation is terribly off the mark, Southeast Asia or otherwise. I mean, how many years did it take them to stuff batteries in the trunk of the FFE and drop the engine for an electric motor, anyway?

          1. Pushmi-Pullyu says:

            “I can’t imagine Bloodshed’s know-how is behind Tesla of 2004, especially since they are mostly building with COTS parts.”

            When it comes to designing and building desirable BEVs, I can imagine that quite easily. Tesla got its start by licensing AC Propulsion’s EV tech.

        2. Pushmi-Pullyu says:

          Yeah. What Vexar described was how to build a test mule, not a production-intent prototype or even a concept car.

          The process of mass producing cars has to be very conscious of costs, at every step. Letting a small team cobble together a conversion car, or three, is something very different from designing a car which can be cost-competitive when offered in the very competitive new car market.

          If anyone needs a real-world example of how conversion car BEVs can’t compete in the new car market, just look at what happened with CODA.

      2. mx says:

        Their supplier, Magna, has built a Tesla with dual rear wheel electric motors and torque vectoring. I’m sure that was a presentation to Ford’s CEO.

        Ford’s supplier is ready.
        Is Ford?

  7. pjwood1 says:

    Best is Hackett’s departure from changing the lipstick (Fields, or GM’s DeNysschen). Nobody questions Ford’s marketing. It’s the pigs underneath.

    The new guy may see the CARB waiver staying in place, with small hopes on CAFE 2022-2025. He may be handicapping a US state banning internal combustion.

    I heard news this morning that UK diesel sales are already down, after the recent 2040 ban announcement.

  8. Dave86 says:

    $4.5B over 5 years??? That’s $0.9B per year. How are they going to pay for their own Gigafavtory, potentially build infrastructure, and develope & tool several models?

    This is not much of a commitment. Hybrids are obsolete and plug-in hybrids are becoming obsolete as battery prices continue to fall.

    Ford’s 5 year plan falls short of GM, the Nissan alliance, and Volkswagen. (Yes, I read all the comments about Volkswagen’s announcement the last couple of weeks.)

    Hiring an office furniture expert to lead Ford during this transition was not the best idea. Ford really needs a technology person – an electronics engineer – to lead during this time.

  9. Mister G says:

    This is all hogwash ford is an ICE manufacturer period…dont believe the propaganda.

  10. RAV4 EV says:

    No news of info on the 300mi small SUV. Hopefully it is the Escape not something smaller. The original communication stated a 2020 model released in late 2019. That is less then 2 years away.

  11. mx says:

    The thing about 2020, is Ford has made several announcements that there was a replacement for the CMAX just about to be delivered, for the last 3 years…

  12. JyChevyVolt says:

    New boss same as the old boss.

    Build a freaking charging infrastructure!!!!

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