Ford Pushes Forward with Hybrids

As Ford ramps-up plans to deliver full hybrid and plug-in hybrid EV (PHEV) versions of several next-generation vehicles, 2020 may be the year of the hybrid for the automaker. The Explorer Hybrid, Escape Hybrid, and Police Interceptor Utility Hybrid, the only pursuit-rated hybrid in the market, will be released as 2020 model year vehicles. A hybrid version of the F150 (which will receive a battery EV version in the future, as well) will be launched in 2020, likely as a model year 2021 vehicle. New hybrids bring new efficiency saving technologies, like the exhaust heat recovery system. It will benefit vehicles taking short trips by decreasing the time it takes for the engine to heat up.

Classic Models Are Modernized by Hybrid Technology

So far, the commitment to hybrids is being well received. The Explorer police utility vehicle has been the best-selling police vehicle in the US for the past several years and the new Police Interceptor Utility Hybrid has already received 1,100 pre-orders from police departments across the US. There will be a $3,500 cost differential between the hybrid and base models of the vehicle, but Ford claims that differential can be recovered within the first year of ownership via fuel savings. Since small municipal governments often have tight purchasing budgets, the annual cost savings may be a key selling point.

Ford’s hybrid vehicles come in addition to the company’s promises to deliver on fully-electric vehicles, too—in total, 40 hybrid and fully-electric vehicles through 2022. The Escape PHEV, which will be released as a 2020 model year, is Ford’s first plug-in utility vehicle. It will include a 14.4 kWh battery but will only be available as a front-wheel drive vehicle at launch. This could be a potential deterrent for consumers looking for an all-wheel drive (AWD) utility vehicle, but Ford has not ruled out an AWD version in the future.

The company is veering its plans toward electrification and hybridization, particularly among the commercial vehicle and SUV classes. Ford plans to invest more than $11 billion in plug-in EVs by 2022, including the company’s new partnership with electric truck startup Rivian.

However, these vehicle and partnership announcements come in the midst of a layoff crisis within the company. Ford announced that 7,000 salaried employees will receive pink slips by the end of the summer in an effort to recover from a sales decline in 2018. It is trying to shift workforce skills by reducing middle management and cutting traditional powertrain engineering. It is unclear if the layoffs will help profitability. Several other automakers have announced job cuts, too, with GM Jaguar Land Rover, and Tesla all announcing job cuts in the since December 2018.

Automaker Giants Acquire Startups to Harness Emerging Technologies

The changing nature of automakers’ investment has shifted and many, like Ford’s $500 million investment in Rivian and $1 billion investment in Argo AI LLC, have invested outside of the company in startups. In 2016, General Motors invested $500 million in Lyft and the companies plan to develop on-demand automated vehicles together (although, the relationship is shaky). General Motors also paid around $1 billion to acquire Cruise, an automated vehicle technology developer. Similarly, Toyota invested $500 million in Uber and the two companies plan to develop a self-driving vehicle.

Ford and other automakers are placing bets on new and emerging technologies to drive sales numbers and profit margins forward. For Ford, that near-term bet lies in hybridization.