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Ford ups its electrified vehicle ante to $11B; 86% trucks and SUVs in the product mix by 2020

Ford management gave an update on its product line plans, touting that by 2020, the company will offer “North America’s freshest lineup among all full-line automakers,” with its average showroom age dropping from 5.7 to 3.3 years as it replaces three-quarters of its lineup and adds four new trucks and SUVs. By 2020, trucks and SUVs—including electrified vehicles—are to represent 86% of Ford’s product mix.

The newly released plan adds on to elements of the January 2017 presentation given by ex-CEO Mark Fields, which specified 13 new global electrified vehicles to be introduced in the next five years, including hybrid versions of the F-150 pickup and Mustang in the US, a plug-in hybrid (PHEV) Transit Custom van in Europe and a fully electric SUV with an expected range of at least 300 miles (483 km) for customers globally.

Ford

In the latest version, Ford says it will spend $11 billion on electrified vehicles, up from the $4.5 billion envisioned by Fields in 2017. That money will go toward:

Next-Gen Hybrid Electrics: Part of Ford’s new strategy includes going all-in on hybrids to bring more capability to customers of our most popular and high-volume vehicles like F-150, Mustang, Explorer, Escape and Bronco.

Ford’s new hybrids will offer customers more space than today’s hybrids. On the F-150 Hybrid, Ford will lean in to capability, such as the low-end torque for extra pulling power and the fact it can serve as a mobile generator. Mustang Hybrid will be all about delivering V8-like performance with more low-end torque.

Ford’s new hybrid system is designed to be more efficient and less expensive than previous generations. These lower costs—achieved through supply base relationships, using common cell and component design and by manufacturing motors, transmissions and battery packs—with the intention of lowering cost of ownership for customers.

Battery electric vehicles: Ford’s BEV strategy includes rethinking the ownership experience so it is more seamless than with today’s gasoline-powered vehicles. That means making charging an effortless experience at home and on the road as well as offering full-vehicle over-the-air software updates to enhance capability and features.

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.

—Sherif Marakby, vice president, Autonomous and Electric Vehicles

Ford’s BEV manufacturing plan will be more efficient. The company will halve floor space for final assembly operations and reduce capital investment 50%. A projected 30% improvement in labor efficiency will allow Ford to redeploy employees to do other jobs, including assembly of battery packs (which are normally expensive and complex to ship).

Ford’s new performance battery electric utility arrives in 2020. It is the first of six electric vehicles coming by 2022 as part of the company’s $11 billion global electric vehicle investment.

Ford also plans strengthening its position in trucks, SUVs (including off-road and performance versions), and commercial vehicles.

Trucks: Since the 2014 debut of the new F-150 with a high-strength, military-grade, aluminum-alloy body, Ford has gained 1.3 percentage points of share in the full-size pickup segment. Average F-Series transaction prices lead the segment—up $6,700 per vehicle since 2014—because of high-end versions like Lariat, King Ranch and Platinum. Ford’s F-Series revenues ($41 billion in 2017) alone are higher than revenues of Fortune 500 icons such as Facebook, Coca-Cola ($35 billion) and Nike ($34 billion).

Ford’s truck business will continue growing as the company adds new models and powertrains with an eye toward continued growth in high-end trims. Some highlights include:

  • 2018: New 3.0-liter Power Stroke diesel engine for F-150, updated version of the popular F-150 Raptor

  • 2019: Ranger returns to midsize truck segment; new F-Series Super Duty debuts

  • 2020: New F-150 debuts with new hybrid powertrain featuring a mobile generator

SUVs: By 2020, Ford estimates SUV sales could account for 50% of US industry retail sales—one reason Ford is reallocating $7 billion in capital from cars to SUVs. By 2020, Ford plans an industry-leading lineup of eight SUVs: five of which will offer hybrid powertrains and one battery electric. Ford SUV sales are estimated to grow 20%—more than double the industry rate—to more than 950,000 by 2020, according to LMC Automotive, and surpass 1 million by 2021.

Hybrids

After recently introducing an all-new model at each end of the SUV spectrum—the subcompact EcoSport and full-size Expedition—Ford’s next push is in the highest volume SUV segments. Entirely new versions of the Escape and Explorer debut next year; combined, these two models make up 70% of Ford’s SUV volume.

Ford also plans to drive growth with two all-new off-road models: the new Bronco and a yet-to-be-named off-road small utility.

Ford also will grow its lineup of performance SUVs. Two additions to the Ford Performance lineup include the all-new Edge ST later this year, and an Explorer ST will soon follow. These two new SUVs will help Ford Performance deliver on its promise of 12 new models by 2020, and will help extend the division’s growth, which has risen 81% in the last four years.

Ford Performance sales are on track to grow another 71% by 2020, driven by SUVs.

Commercial vehicles: Ford, the only full-line brand with offerings that stretch from Class 1 to Class 7, has a commanding 38% share of the US commercial vehicle market. Last year, it sold more CVs than the second, third and fourth place competitors combined. To continue building on its commercial vehicle leadership, Ford plans to:

  • Debut a new Transit with 4G LTE connectivity, coming in 2019.

  • Extend production of its E-Series cutaway and stripped chassis into the 2020s.

  • Offer Automatic Emergency Braking, Lane Departure Warning, Driver Alert System and more on future E-Series, F-650, F-750 and F59 chassis products.

Ford earlier this year introduced new versions of its Transit Connect Cargo Van and Transit Connect Wagon, with both arriving at dealerships later this year.

Flexible vehicle architectures. Ford also is moving to flexible vehicle architectures and more common parts across models, cutting new product development time—from sketch to dealer showroom—by 20%. This is helping Ford achieve its commitment to deliver $4 billion of engineering efficiencies. The company intends to have the most efficient Product Development organization among full-line automakers within five years.

Ford’s five flexible vehicle architectures—body-on-frame, front-wheel-drive unibody, rear-wheel-drive unibody, commercial van unibody and BEV—are paired with module “families” that address the power pack, electrical pack and vehicle configurations.

Seventy percent of each vehicle’s engineering will be driven from this new architecture approach, with 30% of content—including grilles, hoods, doors and more—customized for each vehicle.

For example, as more vehicles become connected, new analytics tools will show which vehicle technologies customers use most often. This new data-driven insight will help determine which features to grow and invest in and which to eliminate, reducing manufacturing complexity, improving pricing, reducing incentives and building revenue over time.

Simplification is another key aspect of the plan. Ford already has reduced orderable combinations on Ford SUVs by 80% since 2014, including a 97% reduction on the new Edge coming later this year.

New manufacturing tools and technologies: Increased use of augmented and virtual reality are helping reduce Ford’s plant changeover time by an estimated 25%, which adds an average $50 million to the company’s bottom line per changeover.

Simulating various production processes and assembly line configurations in the virtual world helps identify potentially hazardous maneuvers and fine-tune workflows before construction even begins, saving an estimated 20% of tooling cost on each vehicle program.

The company also is increasing its use of collaborative robots that can perform jobs quickly and repetitively, helping reduce the risk of injury to employees, freeing them up for more high-value jobs and improving the company’s bottom line.

Comments

Larz Larzen

Maybe it's the right time to revive Shai Agassi's (Better Place) old idea of exchangeable batteries. You drive in and swap them out in 5-10 minutes, instead of waiting for the charger. Could you imagine being in line waiting behind other cars to get to the plug, and then waiting again once you've plugged in? It would be like the gasoline crisis of the 70s. We need a quicker way with all of these BEVs coming on line.

SJC

When we have eCabs and other methods we will not need 300 million gallons of gasoline per day. We can have renewable methanol reformed for HTPEM cars.

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