CEO Mark Fields unveiled an plan for the carmaker to spend $4.5 billion over five years to introduce 13 new EVs
On Tuesday, Ford CEO Mark Fields unveiled an ambitious plan for the carmaker to spend $4.5 billion over five years to introduce 13 new electric vehicles, some with self-driving capabilities.
As part of the strategy, Ford said that it would cancel new $1.6 billion factory in Mexico and instead invest $700 million in upgrading a factory in Michigan, adding 700 new jobs.
Fields later said that the company had undertaken the decision for the good of its own business, not in response to pressure from president-elect Donald Trump, who attacked the automaker's Mexico investments during the presidential campaign.
The new electric vehicles will go right to the heart of Ford's lineup.
By 2020, Ford will introduce a hybrid version of its iconic Mustang muscle car, capable of serving up the same power as a V8 gas engine.
Also by 2020, Ford will roll out a hybrid version of its all-important F-150 full-size pickup truck, long the bestselling vehicle in the US and a major profit driver for Ford. The new truck will, Fields said, be able to function as a mobile generator and power a job site.
Upgrading the icons
Both the Mustang and the F-150 have been revamped in recent years. The Mustang has become more of a sport car and less of a straight-line speed machine, while the F-150 was redesigned to use more lightweight aluminum and also outfitted with Ford's six-cylinder EcoBoost turbocharged engines.
"As more and more consumers around the world become interested in electrified vehicles, Ford is committed to being a leader in providing consumers with a broad range of electrified vehicles, services and solutions that make people’s lives better," Fields said.
"Our investments and expanding lineup reflect our view that global offerings of electrified vehicles will exceed gasoline-powered vehicles within the next 15 years."
Speaking at Ford's Flat Rock Assembly Plant in Michigan, where the Mustang and the Lincoln Continental are built, Fields shared plans for the automaker to undertake a "fully electric small SUV, coming by 2020, engineered to deliver an estimated range of at least 300 miles, to be built at the Flat Rock plant and sold in North America, Europe and Asia."
Parade of innovation
Other new cars will include a "high-volume autonomous vehicle designed for commercial ride hailing or ride sharing, starting in North America," arriving in 2021; a pair of "pursuit-rated hybrid police vehicles"; and Transit Custom plug-in hybrid van that will hit the streets of Europe in 2019.
But Fields wasn't done yet as he kicked off Ford's 2017 in dramatic fashion.
He said that also is testing wireless, parking-space based electric charging, and Ford is cooperating with European carmakers to develop a fast-charging network in Europe, with 400 location planned initially.
If successful, these plans will compete with Tesla Supercharger network in Europe.
On balance, it's worth parsing Fields' announcement into two categories: products that will be entirely new, such as an all-electric compact SUV; and evolution of existing products in the direction of hybridization, an industry trend that has been in effect for a decade.
A hybrid Mustang and F-150 certainly make sense, but the electric SUV and the high-volume self-driving vehicle look to be aimed at not falling behind Tesla and General Motors. GM just rolled out its Bolt mass-market EV, and Tesla wants to launch its Model 3 by the end of 2017.
GM is also planning to integrate the Bolt with its $500-million investment in ride-sharing startup Lyft, likely using technology gained from its acquisition of Cruise Automation, a self-driving tech company that has been working on developing autonomous systems for use in urban environments.
Making governments happy
Ford's embrace on greater hybridization and electrification is a logical move, given potential future regulatory mandates, especially in California.
“Ford's announcement today is likely a response in part to a zero-emission vehicle mandate that's coming into effect in California in 2018," said Rebecca Lindland, executive analyst for Autotrader and Kelley Blue Book in an email.
"This mandate says 15 percent of all new vehicles sold in California will have zero emission by 2025 – and that’s a lot of sales. Ford’s investment in both new electrified product and production capability ... will help position the company to meet the coming standards."
But the electric-vehicle market has been disappointed, as it currently makes up only about 1% of global sales.
"[W]ill consumers buy them?" asked Lindland's colleague, Autotrader senior analyst Michelle Krebs
"Hybrids and electric vehicles are among the most incentive-laden, tax-credit heavy on the market now, and still those levers haven’t moved the sales needle. And the long-term picture for hybrids and electrics in the US is even less clear, as the new administration hints at rolling back stringent ... fuel economy standards.”