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A brand-new F-150, all-new Explorer and Escape, and a surprise new off-roader are just part of Ford's plan.
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Ford Motor Company (F 0.02%) took investors behind the curtain on Thursday, offering a surprisingly extensive preview of its product plans for the next 24 months.
It's very rare for an automaker to reveal its future plans like Ford did on Thursday. But with the company's sales soft and its stock price sagging, Ford executives clearly felt they needed to show investors that they have a convincing plan to boost profits and margins in the not-too-distant future.
So did they? Let's take a look.
Simply put, Ford will revamp its product lineup with a focus on high-profit trucks, SUVs, performance vehicles, and electrified drivetrains, while also revamping its product-development process and making some key technology standard across its lineup.
Here are the high points of the product plan, as revealed by Ford on Thursday.
Trucks: First and foremost, there's a brand-new F-150 coming in 2020. That's something of a surprise: The current F-150 was all-new in 2015 and was just refreshed for the 2018 model year. But with both General Motors and Fiat Chrysler Automobiles launching all-new full-size pickups this year, Ford is determined to keep its biggest profit generator a step ahead.
We don't know a lot about the 2020 F-150 yet. But Ford did say that the new F-150 will offer -- as an option -- a hybrid powertrain that boosts torque and towing capacity while saving fuel. F-150 Hybrid owners will also be able to tap the vehicle's batteries for AC power, effectively using the hybrid drivetrain system as an onboard generator.
Ford's heavy-duty pickups, the F-Series Super Duty line, were all-new for 2017. But as with the F-150, Ford isn't standing still: The Super Duty trucks will be refreshed next year. ("Refreshed" is industry-speak for an update that generally includes new front and rear styling, along with some interior updates, and often some new technology.)
Last but not least, as we've known for a while, the midsize Ranger will return to the U.S. lineup late this year as a 2019 model.
The upcoming Ford Bronco is an all-new off-road SUV, one of two that Ford will release by 2020. Image source: Ford Motor Company.
SUVs: There's some big news here. First, Ford revealed that all-new versions of the Escape and Explorer SUVs will arrive next year. These new SUVs will be built on a completely new architecture; they really will be all-new and should be much more competitive than the current iterations. They'll join the Edge, which will be refreshed for the 2019 model year.
Second, Ford is going off-roading in a bigger way than previously reported. We've known for a while that the Ranger (a capable off-roader itself) will be followed by an all-new Ranger-based SUV that will revive Ford's historic Bronco nameplate. The news is that there's a second off-road SUV in the works, a smaller model that Ford hasn't named yet. Both will arrive by 2020.
Ford's first hot-rod SUV, the Edge ST, will arrive this fall. Ford revealed on Thursday that it'll be followed by a high-performance version of the upcoming all-new Explorer. Image source: Ford Motor Company.
Ford also revealed that there will be a high-performance version of the upcoming all-new Explorer, to be called the Explorer ST, and reminded us that a high-performance battery-electric SUV is under development now. As with the other vehicles mentioned here, both will arrive by 2020.
Why so many SUVs? Ford expects sport-utility vehicles to account for 50% of U.S. industrywide sales by 2020, and it expects its own SUV sales to grow 20% over the same period. That, plus the fact that utility vehicles are typically more profitable than sedans, is why Ford is reallocating $7 billion in capital from car models to new sport-utility models.
Electrification: Ford isn't quite going all in on battery-electric vehicles like some of its rivals. Ford will offer a bunch of battery-electrics (16 by 2022, the first by 2020), but it's also putting a lot of effort into a new line of gasoline-electric hybrids. In addition to the upcoming hybrid F-150 I mentioned above, there will be hybrid versions of the Mustang, Explorer, Escape, and -- a surprise -- Bronco.
As with the F-150, Ford plans to use hybrid drivetrains to offer its customers advantages that go beyond fuel economy: acceleration on the Mustang, added trailer-towing capacity on the Explorer and Edge, and enhanced off-road ability with the Bronco.
Ford global markets chief Jim Farley explained the thinking here:
Hybrids for years have been mostly niche products but are now on the cusp of a mainstream breakout. The valuable capability they offer -- plus fuel efficiency -- is why we're going to offer hybrid variants of our most popular and high-volume vehicles, allowing our loyal, passionate customers to become advocates for the technology.
As for those battery-electric models, Ford's vice president of autonomous and electric vehicles, Sherif Marakby, said that his team is working on ways to make the electric-vehicle ownership process simpler than it is today:
Throwing a charger in the trunk of a vehicle and sending customers on their way isn't enough to help promote the viability of electric vehicles. In addition to expanding our electric vehicle lineup, we are redesigning the ownership experience to ensure it addresses customer pain points that currently hold back broad adoption today.
What does that mean? Among other things, Ford said, it means Tesla-style over-the-air software updates, as well as some as-yet unspecified improvements to the recharging process.
Technology: Ford is doubling down on connectivity and advanced driver-assist systems. By the end of 2019, all new Ford vehicles will have 4G LTE connectivity built in. And starting this fall, Ford will roll out a new driver-assist package, Ford Co-Pilot360, which will include some of the most-requested driver-assist systems:
The package, which also includes the now-standard rear backup camera system, will eventually be standard on most or all Ford vehicles sold in North America. It'll be added over the next couple of years as models are updated, starting with the revamped 2019 Edge SUV this fall.
Your humble Fool, a longtime Ford investor, can't help wishing that Ford's update had looked a little further into the future. How does Ford plan to roll out self-driving technology, or deal with new models of personal mobility that might replace car ownership for many people in America and elsewhere? We don't know -- at least not yet.
But Ford did address a growing concern of many investors: namely, that its product line is becoming stale. Ford has been losing ground in China, and -- aside from the F-Series pickups -- its sales in the United States haven't been great. In both cases, a big part of the explanation is Ford's aging product line.
We now know that will change, and soon. Ford said that these new products should take its "average showroom age" in the U.S. from 5.7 years to 3.3 years by 2020, which it expects to be the lowest among mass-market automakers.
Assuming that the economy doesn't slip too far, these new products should help boost Ford's sales growth and margin, and that should help draw more investors to Ford's beaten-up stock. But there's more to do -- and we're still waiting to hear from CEO Jim Hackett on what comes after 2020.