Ford Dealerships Have a Plan

March 30th, 2018 by

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One thing that Ford is really known for is sheer power and performance. Nothing is more representative of these aspects than the sound of a roaring V6 from a Ford Mustang. Embodying the true meaning of American muscle power, this is a signature sound that has propelled the company into top-tier spots in the automotive industry time and time again. Given all this, it might come as a surprise that Ford is now seeking to drown this sound with silence, specifically the silence of millions of electric motors.

Ford dealerships are no strangers to hybrids and electric vehicles, but the company’s performance has lagged behind other competitors like Toyota, Nissan, and Tesla. The lag hasn’t been from a resistance to change or better fuel efficiency. In fact, Ford has taken great strides in making their F-150 the most fuel efficient truck on the market thanks to EcoBoosted engines and an all-aluminum chassis that lightens up the truck. This represents a different approach to maximizing fuel efficiency without the level of electric development other companies have invested millions of dollars into.

In the near future, that is all going to change. Ford recently reported that their future budget would be more targeted to the development of plugin-hybrid and all-electric vehicles. By 2022, the company hopes to have up to 40 new vehicles that will rival other companies that already have a major head start in this space.

The big question is, however, will it work? The company is putting a lot at stake in this strategy. This is a risky move, particularly since the company isn’t known for their electric performance or ambitions. If this will truly succeed, the company will have to go all in to really see the reward at the end of the day.

 

The Plan

Ford has been silent about the specifics of the electric lineup it wants to develop over the next four years, but one thing is for sure: they are embracing electric technology with a lot of haste and motivation. With 40 new electrified vehicles on the table, Ford hopes to sell 16 of these vehicles as fully electric options with the rest as plug-in hybrids. It is unclear whether the majority of these vehicles will be new or upgrades of existing models, but the company has stated it wants to electrify some of its most “iconic vehicles” to entice new customers who might otherwise overlook these options.

With other companies outlining plans to increase and expand their own electric lines in the next few years, Ford has recognized how much money and effort it will take to play catch up in this space. The company will expand their planned investments into electric vehicles to $11 billion by 2022. For comparison, this is up from only $6.7 billion and $7.3 billion in 2015 and 2016 respectively. The increase in funding should give the Ford designers what they need to develop new electric and hybrid drivetrains along with the complicated motors and computer systems required to make the entire package work in a practical, consumer-friendly manner.

The move is a gamble to be sure. With Ford taking some hits in 2017, the company will have to act carefully in order to maximize its returns with such a bold move. In some ways, however, this kind of change is unavoidable. The automotive industry itself is changing at a rapid pace. As a result, companies like Ford need to make the change without hesitation or risk getting left behind.

 

The Reasoning

Why is Ford bothering to develop its electric line in the first place? First, it is a simple matter of survival. Ford is a global company that has to deal with many pressures from various countries. Many profitable markets such as China, California, and Europe are taking steps now to reduce the impact of gasoline vehicles on the environment. Since slashing carbon emissions is a prime goal for many countries, Ford needs to develop the technology and lineup that will fit within the new automotive paradigm these locations want to embrace.

Second, it is trendy. For better or worse, electric vehicles are becoming more and more popular each year. Notable trade shows like the Detroit Auto Show routinely come up with new concept and production electric vehicles from major and minor players alike. Tesla has built their entire success on the idea of electric technology becoming the dominant means of transportation in the future. Ford would be crazy not to embrace the change even if it turns out to be a fad.

This trend has already created a fierce, almost bitter competitive environment between automotive companies as they rush to develop their electric vehicle offerings. GM, for example, is making the move to develop new battery and fuel cell technologies that could potentially give them a position to license out their tech to other companies like Toyota managed to do with its hybrid drivetrain. Speaking of Toyota, this company is also trying to make battery technology more efficient and cost-effective. If they are successful, cheaper batteries might mean cheaper cars with better performance and longer ranges.

While the specifics of where Ford will focus on its electric-tech development are lacking, it is clear they need to spend some time on advancing the technology itself instead of just the vehicle lineup. All of these companies are spending some time on the technology itself, so it becomes more practical and economical for consumers.

 

The Key to Success

There is still a long way to go in order to really develop electric technology into a mainstream performer in the automotive industry. Ford is going to have some tough choices ahead to determine where to best spend this $11 billion, but there are a few areas they need to develop in order to have any hope of making this new direction work.

Electric technology is still limited by the major problem caused by relatively poor battery performance. If you opened up a Tesla, for example, you’d find thousands of small lithium-ion batteries slightly larger than the average AA battery. With ranges around 200-300 miles, the current battery tech doesn’t offer enough power for long road trips without having to wait hours for recharging at sporadically placed charging stations. This is the reason other companies like Toyota and GM have reported a focus on advancing battery and fuel cell technology.

As Ford marches on, you can expect to see new concepts and redesigns of classic vehicles on a Ford dealership in the future. If they are really acting smart with this new investment, however, you will also start to see new technology under the hood as well. Whichever company manages to make the next major advancement in electric performance and range will have a significant advantage for years to come.

Posted in Ford Dealership