Cleantech Market Intelligence
Ford Goes All-In on Trucks, Utilities, and Hybrids
At January’s North American International Auto Show, almost all of the significant product announcements were about new pickup trucks and SUVs from Ford, General Motors, and Fiat Chrysler Automobiles (FCA). Maintaining sales of those high margin vehicles will be crucial to funding the development and introduction of new and often pricey electrified propulsion and automation technologies. This week, Ford executives led a briefing at the company’s product development center where they provided more details on how they plan to handle that transition.
Core to Ford’s revamped product lineup is a range of new SUV nameplates as the company shifts away from passenger cars. The subcompact Fiesta will likely be discontinued from the North American lineup and Focus sales have dropped to a level where the next model for North America will imported from China. By 2020, Ford expects 86% of its sales in North America to come from trucks and utilities.
That doesn’t mean Ford is giving up on fuel efficiency. Quite the contrary. Ford intends to become the hybrid market leader in North America by 2021, overtaking Toyota. While Toyota is most associated with hybrid technology, Ford introduced the first hybrid SUV in 2004 and plans to leverage this position to offer hybrid or plug-in hybrid powertrain options on every utility model from the Ford and Lincoln brands. That’s in addition to the 300-mile range battery electric crossover it will launch in 2020.
Selling Performance and Power
FCA is branding its mild-hybrid system as eTorque on Jeeps and Ram pickups and marketing based on performance enhancement. Since most North American customers show little interest in green vehicles, Ford wants to appeal to them by using electrification to boost capability and speed. While most details aren’t yet available to the public, previous announcements give a clue as to where Ford is going. The automaker has talked repeatedly about its new F-150 hybrid having a power take-off capability that will enable contractors to get power for their tools without needing to carry a generator. Similarly, the upcoming Mustang hybrid will use electrification to enhance performance and efficiency.
Ford is not sharing many technical details of its next-generation hybrids yet, but most are expected to be high voltage systems that can also support plug-in capability. The automaker is already one of the top purveyors of plug-in hybrid systems; it has sold nearly 100,000 Fusions and C-Maxes with a plug since they were introduced in 2012.
Even the electric crossover will be targeting a more premium customer than something like today’s Escape or Edge. With hints of its 300-mile range and performance at the auto show, Ford President of Global Markets Jim Farley positioned this vehicle as a melding of the desire for crossovers with the passion the Mustang inspires in some customers.
So Why the Massive Shift from Cars to Trucks?
It’s all about the money. Farley explained that since the current-generation F-150 debuted in 2014, average transaction prices have jumped $6,700 while the new Expedition SUV that debuted last year is getting $11,000 more per sale. The F-150 alone generates $41 billion a year in revenue and a significant chunk of Ford’s profits.
In 2015, when Farley was still president of Ford of Europe, he discussed the burgeoning market there for crossover utilities, with many of the offerings being less truck-like. While details of the seven new Ford and Lincoln utilities are still under wraps, a similar segmentation is expected in North America, replacing many of the soon-to-be outgoing car models. It’s too early to tell if the automaker can overtake Toyota in total hybrid sales, but Ford is making a strong push.