Ford's Profit Potential Is Electric

A couple months ago, I wrote a bit here about Ford Motor (NYSE: F  ) and its newfound environmental awareness. Out front, the company's CEO was publicly advocating hiking federal gasoline taxes, while back behind closed doors at Ford headquarters, his engineers were busily piecing together the company's new secret weapon: a hybrid gas-electric sport-utility vehicle.

Ford really seems to have had a stroke of genius in rushing to become the first carmaker to market a hybrid SUV. After all, Honda (NYSE: HMC  ) and Toyota (NYSE: TM  ) both had several years' lead time on the Dearborn, Mich., carmaker, with their respective Civic and Prius hybrid econoboxes.

But Ford has always thought on a much larger scale. Big Crown Vics. Bigger F150s. Biggest Excursions. So perhaps Ford's genius is "genetic" in this instance. Its natural inclination was to start with an SUV -- after all, trucks are the company's real profit makers, and the company consistently racks up "best-selling" records for its Ranger and F150 lines.

Ford knows how much Americans love their trucks. It also knows that these vehicles are some of the worst gas hogs on the road. How better to save customers gas money than by putting a super-fuel-efficient engine in a gas hog?

So anyway, today, the company put a price tag on its new hybrid Escape, which is projected to get twice the mileage of its non-hybrid brother. The hybrid version will cost an extra $3,300, for a total sticker price of about $27,000 to $33,000.

That's the official number, at least. According to last Thursday's The Wall Street Journal, Toyota Prius dealers are adding "fair market adjustments" (i.e., pure profit surcharges) to the sticker prices of their Priuses. Expect that Ford's dealers will be doing the same -- and with a vengeance. For while Prius buyers have the option of shopping around for a Honda Civic if the Prius price gets too steep, for the time being, SUV buyers will have Ford, and only Ford, to choose from.

Sure, Toyota will be joining in the fun later this year, with a hybrid Lexus RX330 luxury SUV. And yes, General Motors (NYSE: GM  ) has hybrid versions of some of its pickups to sell (so far, it is only selling them to corporate fleets). But until someone (Hey Nissan (Nasdaq: NSANY  ) ! DaimlerChrysler (NYSE: DCX  ) ! Any takers?) steps up to challenge the truck-making king in the non-luxury category, Ford is going to rule this niche of the auto market.

Fool contributor Rich Smith is not a certified "car guy." Before he bought his truck last year, he consulted the experts on the Motley Fool's Buying and Maintaining a Car board. He owns no shares in any company mentioned in this article.


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