CES 2011: Behind Ford's Go-It-Slow Approach to Electric Cars
LAS VEGAS -- Ford (F) is taking a relatively low-risk approach as it rolls out a series of electric vehicles like the Ford Focus Electric and new-generation hybrids that are basically alternate-fuel versions of mainstream models. The riskier alternative would be to produce a unique electric model like the Nissan (NSANY.PK) Leaf, with its own dedicated factory.
"Ford's strategy is very clear," Ford CEO Alan Mulally said in a Jan. 6 interview at the 2011 Consumer Electronics Show here. "We are going to electrify all our vehicles over time."
However, another keystone of the Ford strategy under Mulally is to share development costs and as much content as possible among models. "We don't have separate vehicles," just for EVs, he said. The upcoming Ford Focus Electric, for instance, shares a platform that ultimately will account for 10 different models. They have as much as 80 percent in common under the skin, Mulally said.
Gas and battery cars on the same assembly line
Not only that, related models like the conventionally powered Ford Focus and the Ford Focus Electric can be built on the same assembly line without lengthy and expensive changes to the factory, he said.
"We are going to match production and availability to demand. If customers want the EV, we've got it. If they want a plug-in hybrid, we've got it. We have the scale," Mulally said. Ford's strategy also means it's not necessarily make-or-break for Ford if one alternative or the other doesn't catch on. In a separate interview on Jan. 7, Derrick Kuzak, group vice president, global product development, said sharing a platform also makes new technology affordable for the greatest possible number of consumers.
Out on a limb with the Leaf
By contrast, Nissan is going out on more of a limb with the Nissan Leaf. The Nissan Leaf is the first EV aimed at tens of thousands of sales per year initially, instead of a few hundred per year. The first units offered in the United States will be imports, but by 2013 or so, Nissan will have the capacity to build 150,000 units annually in Tennessee, and up to 200,000 battery packs annually. The Leaf shares some content with other Nissans, but it's much more of a unique product, including its own interior and exterior styling.
If the Nissan Leaf doesn't sell in big enough volumes to justify the expense of developing it, it won't be a relatively simple and inexpensive matter to switch to something else. Ford hasn't said how high its expects sales to get for its new EVs and hybrids, but it doesn't seem to be indicating anything like as high as the Nissan Leaf. And with Ford's approach, it's not as critical if their new cars don't meet such high expectations.
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Photo: Ford