Ford Uses Federal Money to Accelerate Electric Car Plans

(MoneyWatch) 

Ford was the biggest winner back in June when the Department of Energy announced the first round of its $25 billion loan program for electric vehicles and battery manufacture. The company was funded with $5.9 billion through 2011 to improve the fuel efficiency of a dozen popular vehicles--from the Taurus to the F-150 truck.

Ford is also the recipient this month of two grants from the DOE's complementary $2.4 billion grant program. Mike Tinskey, manager of sustainability and electrification, said in an interview that it will be using part of that money, $62.7 million (matched by Ford), to transfer production of a key electric transaxle--the heart of both battery cars and plug-in hybrids--from Japan (where it is made currently by Aisan) to the U.S. "The transaxle is one of the biggest components of an EV next to the electric motor," Tinskey said. "We're always looking at volumes and growth rates, and it makes sense to localize the transaxle to our markets."

The made-in-U.S.A. transaxle will appear in Ford's next generation of hybrids and the company's plug-in hybrid, both of which have been announced for 2012. The transaxle will be built at Ford's Van Dyke transmission plant in Sterling Heights, Michigan.

The second grant, $30 million, will be used to continue Ford's partnership with utilities on plug-in vehicles. At a recent Dearborn event, Ford showcased the first fruits of that partnership--an intelligent in-car display that can interact with the electric grid to optimize charging times.

Ford has 21 Escape-based hybrids in utility plug-in demonstration programs, and these cars (which have accumulated 75,000 miles in service) will get the experimental intelligent display. But the DOE grant will pay for larger fleets that could include later pre-production versions of the plug-in hybrid and the Focus-based battery car slated for 2011 production. Ford has 15 utility partners.

DOE grant money will also support Canadian supplier Magna International (also in the running to buy GM's European Opel division, a possibility that Ford's Bill Ford says it is "monitoring") as it works with Ford on the 2011 battery electric car, and Johnson Controls-Saft, which is making packs for the 2012 plug-in hybrid.

Tinskey said Ford would also like to see point-of-purchase incentives for consumers to buy electric vehicles. There is a $7,500 federal tax credit for vehicles with larger battery packs, but Tinskey said a Cash for Clunkers-type program that offered immediate financial relief at the dealer level would be a major boost. "The consumer clearly values point of purchase more than incentives off a tax return," he said. Also of value, he said, are state and local incentives such as free EV parking, access to HOV lanes and free charging at municipal stations.