The electric vehicle marketplace is looking a little bit brighter following Ford’s recently announced $11 billion investment into the development of electric-powered vehicles.
Speaking at the 2018 Detroit Auto Show, Ford chairman Bill Ford announced the mammoth automaker’s acceleration of its plans for electric vehicles following recent developments in the electric marketplace. The company plans to invest the money over the next four years, and the recently announced investment marks an increase over the company’s previously announced $4.5 billion investment.
Shifting Priorities to Electric
Projected against Ford’s annual research budget of $7.3 billion, the new figure means that Ford could be spending up to a third of its research dollars on the development of new electrified vehicles. According to Chairman Ford, this new investment could give the Ford fleet up to 40 new electrified vehicles, split between plug-in hybrids and full electrics.
This gives some credence to earlier statements made by Ford CEO Jim Hackett back in October. At an investor’s meeting, the CEO stated that Ford planned to cut production costs and use the savings to reprioritise investments into electric vehicle technologies.
Chairman Ford told reporters that these new electric models wouldn’t just be new models. “We’re taking our mainstream vehicles, our most iconic vehicles, and we’re electrifying them.” The company recognises that many of its most popular vehicles have lasting power, and allowing a new electric vehicle to bank on an established name gives it a greater chance for success.
Ford is Not Alone
Ford is not the only automaker to plan a major investment into electric cars. General Motors, Toyota and Volkswagen have likewise announced big plans for the electric marketplace. Responding to consumer demand, the automakers have pledged to develop vehicles that offer luxury and performance on an electric drive train, including vehicles in the popular SUV body style.
GM has announced that it plans to add 20 new electric cars and SUVs to its lineup by 2023, including a mixture of both battery-powered vehicles and fuel cell vehicles. The world’s one-time largest automaker is sinking its robust profits from gas-powered vehicles into its electric developments, and it expects to return a profit on its investment by 2021.
Not to be outdone, Volkswagen has announced a $40 billion investment over the next twelve years. That figure does include research into both electric and autonomous vehicles, but it still represents a gargantuan investment from the world’s largest automaker. In fact, the announcement nearly doubled an early announcement from just two months prior, when Volkswagen announced a €20 billion investment over the same time period.
Toyota didn’t make any new announcements regarding its electric vehicle plans, but it did mention that it’s working to commercialise a new battery technology that could drastically decrease the cost of electric vehicle production.
Not Just Mini-Mobiles
For years, the limitations of batteries and electric powertrains have relegated battery-powered vehicles to small, low-power platforms, such as the Nissan Leaf. However, Ford recognises that consumers have a robust range of automotive needs, and the company is tailoring its electric lineup to service the entirety of the automotive market.
A key element of Ford’s electric fleet will be a high-performance utility vehicles, including at least one SUV-style vehicle. The company has also announced that the automaker’s most popular vehicle, the F-150 pickup truck, will be receiving a hybrid drivetrain option in 2020.
Low-Speed Vehicles Part of the Strategy
Although Ford has been enthusiastically touting the electric leap of its flagship models, the company has quietly entered the niche world of electric golf carts. Starting in 2018, Australian golfers will start seeing carts bearing Ford’s iconic blue oval at a variety of different golf courses.
At present, the Detroit automaker is focused on fleet sales for golf clubs. The new carts contain several high-tech features, but the company’s main priority is delivering a reliable vehicle at an affordable, long-term price. If the initial launch goes well, Ford expects to offer a retail option in 2019.
The company is already planning two models, a basic model with 8-inch wheels and a deluxe model featuring 10-inch wheels and upgraded seating. Both models will include regenerative braking and a walk-away safety feature to prevent unattended vehicles from rolling away.
A Shift in Focus
Ford’s embrace of the electric vehicle market has been some time coming, but the genesis of its recent shift came after Hackett replaced previous CEO Mark Fields in May 2017. Following an intensive internal review, the company formed an engineering team tasked with accelerating its global plans for electric vehicle production.
The decision was made easier by the success of Tesla Motors, which focuses exclusively on electric vehicles. The Silicon Valley automaker recognised that consumers don’t want to choose between high-performance vehicles or environmentally friendly options; consumers want both, even if they have to pay extra. As Ford’s Jim Farley, president of global markets, stated at the Detroit show, “What we learned from this first cycle of electrification is people want really nice products.”
Ford’s investment has also been spurred by signals from China, France, India and the United Kingdom. These four countries have pledged to eliminate fossil-fuel vehicles by 2040, but their citizens don’t intend to give up driving. These drivers will still need vehicles that aren’t powered by petrol, and Ford doesn’t intend to cede the market to other manufacturers.
In making its plans, Ford has committed to partnering with local suppliers. Several of Ford’s 40 announced electric models are targeted at the Chinese market, for example, and will be produced in conjunction with China’s Zotye Auto company.