Ford Motor Company (NYSE:F) has finally joined the electric-vehicle rush.
Ford executives said on Sunday that the company will more than double its previously announced investment in electric and hybrid vehicles, and that it now plans to roll out 16 fully electric vehicles over the next four years.
What Ford said: A big electric-vehicle push is now under way
During a presentation on Sunday ahead of the North American International Auto Show in Detroit, Ford executives said that the company will increase its total investment in "electrified" vehicles to $11 billion from the $4.5 billion it announced in 2015. That investment will fund a total of 40 new products that will launch between now and 2022, including 16 battery-electric vehicles and 24 hybrids, including some plug-in hybrids.
Ford hasn't given much information on what exactly it has planned. But it has dropped a few clues over the last couple of years -- and a senior executive revealed a bit more during a presentation in Detroit on Sunday.
What the new electric Fords might be like
"Can a battery-electric vehicle stir the soul?"
That was the question asked by Ford global markets chief Jim Farley during the presentation on Sunday, right before he announced Ford's ramped-up electrification plan. If you know the context, it's an unsurprising question for a Ford executive to be asking.
Here's the background: Back in 2016, during a presentation for investors, Ford talked up its "profit pillars": Pickups, commercial vehicles, SUVs, and performance models. These are segments of the market in which Ford believes it has outsized pricing power and above-average customer loyalty -- or put another way, the ability to earn above-average returns on its invested capital. At the time, it said it would focus the bulk of its future product investments on those areas.
That's one part of what Farley was getting at. Here's another: Ford executives have long been concerned that the company's core customers may not be willing to pay extra for hybrid and electric technology in an era of cheap gasoline if the technology's only selling point is that it will use less (or no) gas.
To circle back to what Farley said, the idea is that Ford will encourage its customers to adopt electric technology by offering more than just fuel efficiency, by using it "to give people more of what they love about our most popular and iconic vehicles," as Farley put it.
By way of example, Farley talked up a feature of the upcoming hybrid F-150: It will be able to supply electricity from its battery via conventional outlets in the truck's bed. That feature could eliminate the need to haul a generator to a job site, or allow the truck to serve as a backup to a home's power supply in the event of a blackout.
Another example: Farley revealed that a high-performance battery-electric vehicle called the Mach 1 is coming from Ford in 2020. That's a historic name for a high-performance version of Ford's Mustang. But Ford officials said after the event that the vehicle could be a high-performance electric crossover SUV "based on the Mustang." The Mach 1 is being developed by Team Edison, Ford's electric-vehicle skunk works located in the historic Corktown section of Detroit.
Ford had said previously that it plans to offer hybrid versions of the F-150 and Mustang by 2020.
Ford just joined a crowded electric-car field
Ford's announcement followed similar announcements made in recent months by many of its global rivals. Among them:
- General Motors, which is already shipping an affordable long-range battery-electric vehicle, will launch at least 20 more all-electric vehicles by 2023.
- Volkswagen AG will launch "over 30" new electric vehicles by 2025, starting with models for its premium Audi and Porsche brands.
- BMW AG will have 12 new fully electric models by 2025, and will be ready to begin mass-producing battery-electric vehicles in 2020.
- Daimler AG will have an electric version of every Mercedes-Benz model by 2022, as well as battery-electric medium and heavy truck models.
- The alliance of Nissan, Renault, and Mitsubishi, which share a management structure and product-development efforts, will have 12 new all-electric vehicles by 2022.
- Toyota will spend $13 billion on new hybrids and electrics, including more than 10 new battery-electric models by the "early 2020s."
The wild card: Tesla, which is currently making an all-out effort to ramp up production of its Model 3 sedan and join the ranks of major carmakers.
The one big question: Will Ford's customers want electrics?
Ford's executive chairman, Bill Ford, is an environmentalist who has been nudging the company toward greener technologies and practices for years. But he, like other Ford executives, was clear that there's one big unanswered question around Ford's electric-vehicle efforts: Will they sell?
"We're all in," Ford said after the company's presentation on Sunday. "The only question is, will the customers be there with us?"
That's the question. At least for Ford, we'll start to find out the answer over the next couple of years.