Ford's huge hybrid opportunity: Can Ford compete?
Can you compete with the king or not?I still can't believe the early sales data coming in on the 2010 Toyota Prius. Even before the Prius actually launches, Toyota will have already sold more of these new hybrid cars than Ford will sell in all of 2009, despite the hype around the new Fusion hybrid.
Yet, as Chrysler and GM sit on the precipice of bankruptcy, Ford stands strong in Detroit, in America. Today, Ford evokes hope in the hearts and minds of those that believe the US auto industry can still compete.
But, what do we really believe in? That Ford understands finance? Obviously, but what about its future products?
If Ford was rolling out Honda's new Insight hybrid, it would have instantly sold out. INSTANTLY. Buy American-only buyers are dying to put their money in an American product that proves American automakers can compete, especially when it comes to fuel efficient technology.
But, can Ford truly compete in the future? Not if its cheapest hybrid is the Ford Fusion hybrid.
In recent weeks and months Ford has talked up its gains in lithium batteries. Enough talk. It's time to walk the walk and give America an American foreign-oil dependency, CO2-crushing, Toyota Prius contender. Such a vehicle cannot, will not, fail Ford. And the hype, buzz and floor traffic it would create for Ford would result in the biggest marketing coupe in Ford history.
So, can Ford compete?
Labels: Ford, Ford fusion hybrid, honda insight hybrid, Hybrid Vehicles, lithium battery, toyota prius
posted by Dahcredyns at
10:16 AM
13 Comments:
This post has been removed by the author.
Last week Rush went off telling his peeps that nobody wants hybrids and that Obama is ruining the car business. Is this the American-only buyers you are talking about? The Prius numbers are truly amazing. I think it will take years for the public to accept American hybrids(or any hybrid for that matter) as equal to the Prius. I think they missed the train and will pay for their lack of leadership. Kind of like the Ipod. All other mp3 makers just don't get equal press no matter what they do. They are always playing catch up and are never seen as better. When car buyers think of hybrid...the Prius is the first car that comes to mind. So until Ford & other hybrids are seen as better than a Prius, they will not compete with Toyota. Business is business no metter if you are talking about cars or any other product.
Well, I guess you could say that Rush has a bit of a point. Hybrids aren't profitable at today's gas prices for US automakers.
Still, I'd guess I'd ask Rush whether foreign oil dependency is a national security risk, as many ex-CIA heads have called our dependence.
Nonetheless, I've had numerous conversations with many, many die hard American auto supporters - many that have bought Escape and other US - hybrids, in addition to supporters of the Volt, that are rabid for such a vehicle.
Let's imagine for a second a GM or Ford ad with Iraq fighting and oil imagery, coupled with some hinting at how the emergence of the Chinese automaker is much like the emergence of Japanese automakers just a few decades ago.
Except this time, we don't own the auto industry. We're on taxpayer-funded lifeline. And this time the Chinese are a much bigger threat, if I can use that term, to American automaker success than Japan ever was.
Just ask Warren Buffett.
Somehow I think the creative staffs behind the Big 3 marketers that have kept SUVs and trucks such hot sellers, could make such a sell to hordes of Americans, even many of the most conservative of Americans.
Crap. Lawrence Kudlow of CNBC drives a hybrid Escalade. Even he gets it in some way.
Selling this to America via global warming will be a tough sell. I think selling it via foreign oil dependency is a much easier sell.
Regardless, if Ford developed a unique-hybrid, with similar mpgs and price tags, could Ford sell 100,000 of them?
I think its a cakewalk. Do you disagree?
as the Prius that was
I guess the point is this -
Who really believes any Ford or GM people read this or almost any blogs ? I would highly doubt it and even if they did, would they not already know what we say is obviously true ? Yet they cant majically create a world class CHEAPER hybrid to compete in less than 2 more years...for next 2 years Ford and the New Green GM will be 2 years behind on COMPETITIVE PRICING thats anywhere near a much better equipped and yes little smaller FANTASTIC Toyota or Honda or soon to be Hyundai Lithium hybrids :(
Ford has the technolgy to compete. Case in point is the Ford Fusion Hybrid which is arguably the best family size hybrid currently on sale in the market. The same system in the Focus should make it a strong competitor to the imports.
The problem is cost. Ford is just not price competitive. I recently priced out the FFH online againt the Toyota Camry Hybrid. It turns out to cost about a grand more.
To break the imports' sale moments,
Ford needs not only to match but to undercut their prices.
That is a tall order given the financial woes the Big 3 are in.
Actually, people from Ford and GM regularly read quite a few blogs. In fact, numerous times communications and PR people from GM, for example, have commented on posts on this blog, and I'm sure many other blogs.
Likewise, GM has contacted me numerous times about test driving their hybrids and fuel cell vehicles for instance. I've been to the Volt design center. I've witnessed Volt wind tunnel tests first hand. I've talked to every major engineer involved with the Volt, all thanks to this blog.
So, I think that these companies pay a lot of attention to blogs because they are interested in what regular people think about their products and their future plans. Plus, they are trying to reach those whom might not be fans and try to change their thinking.
Ford does have the technology. And, if you believe Ford, then next year Ford has claimed its lithium R&D will be production ready. Moreover, it will offer 5 percent more power than current NiMH technology, but it will cost 30 percent less to manufacture.
Thus, in my opinion, Ford could put lithium into in a Prius-fighting hybrid. Resurrect the Reflex concept for this purpose, for instance. Even if just in a Focus, if priced right, it would still sell well.
No. Such a program won't be profitable for Ford for years, but I think the traffic and PR that it achieves could help offset the production costs in the short term.
Bob Lutz has regularly referred to the Prius has a huge marketing coup. He even claimed that GM could have take a fraction of ONE year's marketing budget and applied that to a Prius-fighting production vehicle.
Thus, I think you could justify a Ford Prius-contending hybrid as a marketing expense in the short term.
Regardless, inevitably, unless some big oil find is looming, gas prices are almost assuredly going to go up. Even much sooner than automakers might expect. This is a segment Ford must get into, and they must get into it as soon as possible.
Right now there is tons of positive buzz around Ford from the many tens of millions of Buy-Only-American fans. You'd only need a few percent of these people to make Ford's hybrid a huge success.
This post has been removed by the author.
Ford and GM will not catch up to the Prius until Hybrids move to Lithium. And even then Ford and GM can only compete with massive Government support of Lithium battery production in the U.S.
That is why I think GM MUST try to leapfrog the Prius with the Volt. Even if they tried and sold a few cheap hybrids, it would be a strategic mistake that would take GM MUCH longer to reach profitability on than it took Toyota with the Prius. Better to invest in the PHEV market, and try to gain Lithium battery leadership and patents around Voltec.
BTW, Dahc, do you know something you're not sharing about Ford's hybrid plans? You seem awfully interested in a company that seems stuck at 25K hybrids/model/year. My intuition tells me you think something is up.
I think GM needs a cheap hybrid in their portfolio, perhaps a few. I don't think Voltec is enough, especially in the next 10 years. GM's new lithium BAS system, might be enough to complement Voltec, but I don't think I'd make that bet.
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In terms of Ford, I'm purely speculating. However, I'm basing my speculation off a few things.
First, I followed Alan Mulally a bit when he was at Boeing, where he wasn't just fiscally intelligent, but he made great strides towards efficiency at all levels. One might say Mulally is a disciple of kaizen.
Second, while at Boeing Mulally embraced new technologies. Again, especially those that increased efficiency, and Boeing fleet fuel efficiency was significantly increased by Mulally's moves.
Third, Ford has made a number of very forward looking, extremely positive statements regarding developments in their lithium technology. In fact, we should be seeing some of the fruits of this labor in multiple platforms some time next year if Ford's public statements are to be believed.
Thus, a lot of the groundwork is there for something that really pops, not just in terms of technology, but sales potential, and I'm just betting Mulally is too smart to miss this opportunity.
Perhaps its all just wishful thinking on my part, but I really have faith in Mulally. And, so far, his record continues to speak for itself.
Finally, within 5 years, I'd bet that gas will bottom, then and forever, at about $3.00 per gallon, and that's my low end predicton. I'd assume we'll probably be closer to $4.00, maybe even a bit higher.
5 years from now, if my gas prediction holds true, the Prius might be the best selling vehicle in America.
Ford, and anyone else that wants to survive, better have a cost-effective, mass-producible competitor to the Prius, and you better be ready to produce in hundreds of thousands, not tens of thousands.
Indigo Incarnates
I'd have no problem buying a Focus. Hybrid if it came at the Insight-II price.
As a side note, isn't the patent-lock on large-format, high-capacity NiMH batteries due to expire in 2015? How would that change the hybrid game? I suppose that it costs less to make several very large batteries versus an array of much smaller batteries.
Indigo--
NiMH is dead, unless lithium is a total bust.
I know for Toyota, the patent hasn't been the biggest issue regarding its NiMH batteries, it's been developing its supply chains for copper and nickel, something it's had to do on its own.
Ultimately, I think the supply-side economics of lithium are far more cost-effective than for NiMH.
For instance, when gas prices were going up, the prices of Nickel and copper were also spiking. So, I'm not sure widespread adoption of NiMH batteries would result in the economies of scale that lithium could possibly achieve.
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