Ford Ups the Electric Car Stakes

The new Ford (NYSE: F  ) Focus Electric gets 100 miles per gallon.*

Yep, that's an asterisk. Being an electric car that doesn't actually burn any gas, the latest Focus doesn't really get 100 miles per gallon. But the long-awaited model is expected to be the first car with a backseat to get a 100-mpg equivalent rating from the EPA, a milestone in the emerging electric car race.

That sounds like a big achievement. So is it a game changer?

About that headline number...
What Ford's PR crew actually said on Wednesday was that the new Focus Electric, a purely electric-powered version of Ford's acclaimed new Focus compact, is expected to receive the first 100-miles-per-gallon-equivalent, or MPGe, rating awarded to a five-passenger car by the U.S. Environmental Protection Agency.

The MPGe is an alternative rating system introduced by the EPA last year for cars that can run entirely on electric power, like Nissan's (OTC: NSANY) Leaf (99 MPGe) and General Motors' (NYSE: GM  ) Chevy Volt (93 MPGe when running on electricity only). In a nutshell, MPGe expresses the car's "mileage" in units of electrical energy that are roughly equal to the energy in a gallon of gas. It appears on the window stickers of new electric cars just as the EPA's conventional MPG numbers do on their gasoline-powered cousins, giving consumers some basis for comparison.

While the Focus Electric hasn't officially received the 100 MPGe rating yet, it's already something of a landmark vehicle in other ways, albeit an incremental one rather than a revolutionary one.

A step forward, not a leap
For the past year, the Leaf has represented the state-of-the-art in mass-market all-electric vehicles that consumers (in some parts of the country, at least) could actually buy. It has enough range ("about 100 miles," according to Nissan or 73 miles, says the EPA; the actual range in any given moment depends heavily on driving conditions) to be a viable commuter car for many. And it's a real car with mass-market appeal made by a major global automaker, supported by more than a thousand dealers around the country, with state-of-the-art safety features and creature comforts.

The Focus Electric doesn't radically shift the technology, but it might move it forward a little. While it's not the first car to break the 100 MPGe barrier -- that honor goes to Tesla Motors' (Nasdaq: TSLA  ) Roadster, which rates 119 MPGe -- it is the first one with a backseat and a five-figure price tag to do so. That's a good talking point for Ford, but there are more substantive points that buyers in this segment are likely to consider:

  • Faster recharging. Ford says the Focus Electric is the first EV to be compatible with higher-speed 240-volt rechargers, which will allow a full recharge in a little more than three hours -- half the time, Ford says, that it takes to recharge a Leaf. Of course, you'll have to buy one of these chargers and have it installed by an electrician to get this advantage. But it seems likely to be worth the investment.
  • More usable range, maybe. Ford has been a bit coy about the Focus Electric's actual range (expect it to be a little, but not much, better than the Leaf's) but emphasizes that the ability to recharge more quickly will increase the car's usable range "in a busy day of driving and recharging." The fast rechargers will refresh the car at a rate "up to 30 miles per charge hour," Ford says.

Of course, these incremental improvements will come at a price: $39,995, to be exact. That's about $5,000 more than a Leaf, a sizable jump. In fact, it's about what a Volt costs but without the Volt's onboard gas engine for backup. Will it sell?

The upshot: Don't expect too much
Even though electric cars have been coming under fire (so to speak) lately because of issues with the Volt's batteries, I'm sure Ford will find buyers for the Focus Electric. I'm also sure Ford will improve the car significantly and bring its price down as better batteries become available over the next few years. But I think it's unlikely to sell in significant numbers, for a few reasons.

First, the price is steep -- a sizable leap from a Leaf, and in the grand scheme of things not all that far from what a bare-bones entry-level Tesla Model S is expected to cost. And the Model S will be a bigger car with better range. While Tesla can't match the reach of Ford's dealer network, Ford's dealers won't be able to match Tesla's kid-glove customer service.

Second, as more plug-in hybrids become available, the case for a pure EV like the Focus Electric gets somewhat thin. In the spring, Toyota (NYSE: TM  ) will launch a plug-in version of its super-popular Prius hybrid that is expected to get a rating of 87 MPGe, though Toyota says its electric-only range is only 15 miles. And Honda (NYSE: HMC  ) , which will have an EV version of its popular Fit on sale in the U.S. soon, is also expected to debut a plug-in Accord hybrid late next year, a car that might be a real game changer in this space.

Finally, there are lots of reasons to be skeptical of the idea that mass adoption of EVs is going to happen anytime soon -- and lots of reasons to believe that most green-conscious buyers will continue to choose hybrids over EVs in years to come. But for all that, the Focus Electric is important: It's one more sign that Ford is fully competitive with the leading Japanese automakers and continuing to build strength and expertise with a technology that is almost certain to become even more important and popular in markets around the world in the years to come.

Ford's dividend is finally set to return after a five-year absence. You'll have to wait until March to collect it, but you don't have to wait to put the power of reinvested dividends to work in your portfolio. In a special new report, Motley Fool analysts identify "11 Rock-Solid Dividend Stocks," all great additions to a long-term investor's portfolio, and all good buys today. This new report is completely free for Fool readers -- just click here to get instant access.

Fool contributor John Rosevear owns shares of Ford and General Motors. You can follow his auto-related musings on Twitter, where he goes by @jrosevear. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of Ford, General Motors, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (7) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 15, 2011, at 5:40 PM, garysoaring wrote:

    Dear Motley,

    Just to keep things on the up and up, according to a TESLA representative, the TESLA Model S gets 119 EPA rated miles per gallon for a 7 passanger car (if you exclude the rear facing seats for two kids it is a 5 passenger car at point of purchase) and therefore is the first 5 passenger car to get better than what FORD "expects to get" from the EPA mileage rating! I believe the title of the article should be changed to "FORD like GM palys catch-up to TESLA." Cleverly structured press releases will not alter the truth. I suggest checking with TESLA before publishing EPA figures for TESLA Roadster or Model S.

    Garysoaring

  • Report this Comment On December 15, 2011, at 7:29 PM, Mario1357 wrote:

    Missing facts worth noting:

    - the Tesla S is $10,000 more that the Focus

    Electric.

    - no mention was made of the federal or state

    incentives which amount to $10,000 in California.

  • Report this Comment On December 15, 2011, at 8:24 PM, TMFMarlowe wrote:

    Dear garysoaring:

    Just to keep things on the up and up, please explain how the Model S, which won't be in production for at least six months and possibly more, could possibly be "first" at anything ahead of a car that is being built right now today and will be at dealers within weeks.

    John Rosevear

  • Report this Comment On December 16, 2011, at 1:36 AM, garysoaring wrote:

    Dear John Rosevear,

    A few more facts:

    Go into a Ford dealer and ask for the electric. They look at you cross-eyed and try to sell the gas Focus to you! If you insist, they will put you on a reservation list to get one of the limited production electric Ford focus cars due out sometime in 2012. The dealer gave no date. But why dwell on some details. Here are a few more that are similar to the TESA Model S:

    1. You get $7,500 Fed kick-back on a ford Focus purchase.

    2. Charge rate is similar to TESLA. (60 miles/hr.)

    3. It will be offered only in California, N.Y. and Jersey. (TESLA is around the world and has sold 8,000+ Model S to this date and is producing for mid 2012 roll-out.)

    4. It is supposed to have everything the TESLA has in terms of temperature controlled li-ion batteries, regenerative braking, illuminated charge port, a smart instrument panel fully integrated with all the popular electronic gagets, etc.

    5. The starting price at $39,200 is just shy of what the base line TESLA S costs.

    What it doesn't have similar to the Model S:

    1. Great looks (sorry but the Focus is a bit to homely for me).

    2. A minimum 160 mile range on electricity only.

    3. Engineered from the ground up to be electric, not a converted gas car.

    Enough of the picking away at differences and similarity. Let's look at what that upstart TESLA has started: The electric car war! Every one of the major producers snickered when the name TESLA was mentioned. How dare they come along with something other than the millions of 6,000 lb. SUVS idling and dripping away on our freeways every day with one person aboard! Yes, they are all rushing to put something on the road to snuff out TESLA. What an embarrassment for the big fat cigar smoking know-it-alls of the auto industry to let their top of line hot rods get their doors blown off by a roadster that runs on electricity. Yes, it does go to 60 in about 3.7 seconds, doesn't wake the dead doing so either! And it goes 230 miles on a charge! The model S is almost as quick!

    I suggest you go into the nearest Ford dealership and make a reservation. Then for the sake of complete research, go into a TESLA dealership and look at what they have to offer. Test drive one if you can, and compare the technology.

    TESLA is ahead of schedule for release of their Model S. The final Beta versions have been touring around the world and receiving rave reviews (check all of the videos on line and read the auto rags). Model S will hit the showroom floors by Dec. 22nd!

    Things are changing my friend, and these are great times with the auto industry. Thanks to guys like Elon Musk who are willing to put their fortune on the line and follow a vision, and do it without a union legacy. But that's what America is supposed to be all about, isn't it? By the way, TESLA is not the only one to receive Fed Funds! The others used them to bail themselves out or to jump start their own ventures as well.

    I've put 30,000 miles on a roadster over the past 2 years, and still loving it, just like I did with the GM EV1! I am in line for a Model S!

    Garysoaring

  • Report this Comment On December 16, 2011, at 4:42 AM, TimServo wrote:

    One item that Ford has very wrong:

    "Ford says the Focus Electric is the first EV to be compatible with higher-speed 240-volt rechargers, which will allow a full recharge in a little more than three hours -- half the time, Ford says, that it takes to recharge a Leaf."

    Tesla has offered a 240 Volt charger and cable since the introduction of the Roadster in 2008.

    (disclosure: I work for Tesla)

  • Report this Comment On December 16, 2011, at 5:43 AM, AdvanderMeer wrote:

    It's great that Ford puts another EV on the road. It's a little bit disappointing that they converted a gas powered car as I am sure they could have done so much better by building an EV from the bottom up. The fact that Ford doesn't even have a credible study makes one question their intentions (or lack thereof).

    I would be really disappointed if Ford would come to the conclusion that the Focus doesn't sell well enough, because that's what you get for doing your job only 50%.

    If Tesla can get Model S on the road for $10k more than the Focus than it will prove that the Focus is an overpriced green washing product.

  • Report this Comment On December 17, 2011, at 3:32 PM, GeorgeNuckols wrote:

    Thanks for all the great post from TESLA, I love that company and what it stands for and have myself invested in that great company. But no matter how much I would like to see a reputable company take over the auto market here is what you are up against.

    Ford.... well they did not have the insight to sell the $100,000. (02' Prius) at a loss in order to dominate the hybrid market like your palls over at Toyota but they did build an electric ranger all the way back in 1998 and they will soon bring that back to life to replace all of the monster trucks and matching SUV's that hey sold since then. That EV Focus (I owned a Focus ZX5- it was the worst car I've ever owned! i.e. cup holders that dump out your coffee on a corner, sweet.) well that new EV is just a tester they don't care that it is a joke because after financing this overpriced under engineered car they will come out with a line of small trucks and decent EV options that are probably going to be in the $25 -$40K range (depending on inflation & options) and they will make so many of them it will be there own EV revolution.

    So TESLA you are just going to have to keep ahead of them and to be honest I will not buy one of your cars until I can get the color I want. And that color is Photovoltaic so could I have one gift wrapped in thin film solar cells that charge it ever so slowly in the parking lot for free. Really it is not that hard you already have an inverter and batteries why not.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1743153, ~/Articles/ArticleHandler.aspx, 11/23/2014 7:33:10 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement