NEW YORK--The car of the future is here, at least according to Ford, which unveiled its first all-electric car today with glitzy events here in New York and in Las Vegas.
Unlike its competitors, Ford will roll out its electric vehicle as a new version of an existing model, the popular Ford Focus. In a further move to distinguish itself from the field, the Focus will be available not just as an all-electric car, but also as a hybrid, a plug-in hybrid, and as a conventional gas engine vehicle.
At New York's Altman building, frenetic dance music geared up the crowd of auto journalists, car dealers and executives. As the lights dimmed, a smooth-voiced announcer directed the audience to take their seats. This was no mere car announcement. It was automotive theater.
In fact, some analysts suggest that a performance is all the product release really amounts to. Electric cars are still an extremely minor part of the auto market--only about 2 percent of cars sold are even hybrids. Building an all-electric car provides extraordinary fuel economy credits for automakers looking to comply with nationally mandated fuel efficiency standards, as well as boosting a progressive, green-minded company image. Skeptics suggest the electric Focus is more about satisfying those requirements than making money.
"There wouldn't be any automaker making electric cars if not for fuel economy regulations," said Aaron Bragman senior analyst for IHS Global Insight. "They're not a moneymaker."
Even if Ford has genuinely ambitious plans for its latest cars, it is taking on enormous obstacles that could prevent electric vehicles from penetrating the consumer market. Not only are electric cars substantially more expensive than ordinary gas automobiles, but the lack of an overall U.S. infrastructure to charge electric car batteries induces major anxiety for drivers looking to drive more than 100 miles at a time.
But in New York on Friday, the mood was distinctly triumphant as the company still associated with the earliest roots of the American auto industry took aim at capturing a slice of its next iteration.
"This really is a milestone for Ford Motor Company," proclaimed Bill Ford, the company's executive chairman of the board and the great-grandson of the automotive pioneer, Henry Ford. "The future has arrived and you are the first to witness it."
Everyone cheered as a fake garage door ascended and a gleaming electric Focus pulled out of the mock-garage (complete with mulch, shovel and sled). Ford posed by the lit-up circle where a driver might ordinarily pump his gas. But of course, this car had instead a long cord connecting the car's electric battery to a small charging station.
Unlike the Nissan Leaf or the Chevrolet Volt--the company's primary competitors in the electric car market-- Ford has chosen to capitalize on the popularity of the Focus name rather than produce a new brand for their all-electric car. The electric Focus looks almost exactly like its gas predecessor.
"Frankly, why mess with something that's great?" asked Ford, praising the Focus as "gorgeous," "good-looking" and "attractive."
Rolling out its line of electrics under an established name is part of Ford's tactic to bring electric cars to the average consumer.
"It's part of an overall strategy of trying to consolidate brands and model names," said Jesse Toprak, VP of Industry Trends at TrueCar.com. "They'll spend money on a few brands and just a few models."
The Focus is a compact car, the most popular variety in the world.
"To make this the electric vehicle for them means just about anyone can sell it just about anywhere," said Bragman. "They're going to build off the Focus name and simply make it an additional option."
For Ford, offering a wide range of electric options is a matter of catering to different consumers' needs. They will build the hybrids, plug-in hybrids, all-electrics and conventional Fords in one factory in Wayne, Mich. Depending on demand, this will allow Ford to ramp up production of whichever flavor of electric proves to be the most successful more easily than if they had to separate production locations.
"Each automaker is going for their core competency," said Brandon Mason, lead powertrain analyst at Autofacts of PricewaterhouseCoopers, of the electric market. "Ford is taking the path that we're going to offer a bit of everything."
While an all-electric runs purely on an electric battery charged through an at-home charging station, a plug-in hybrid switches from an electric battery to a gas engine once the battery is depleted, while a hybrid combines an internal combustion engine with an electric propulsion system.
"One size doesn't fit all," said Ford. "Customers have different needs."
But green is far from mainstream. Electric vehicles--hybrids, plug-ins, and all-electrics combined--make up only about two percent of the actual market. Ford Director of Global Electrification Nancy Gioia's confident prediction that market share will jump to ten to 25 percent by 2020 is not matched by more conservative analysts.
"We predict sales of 1.4 million units annually in 2017," said Mason. "That's about one and a half percent market share."
Two issues confront prospective buyers: affordability and range anxiety. Even with the $7,500 tax credit buyers can receive for buying electric, such vehicles still cost much more than conventional cars.
"Cost is a huge prohibiting factor to make it a better business case for consumers," said Mason. "[Electric cars] are 10 to 15 thousand dollars higher now and mainstream consumers aren't willing to pay that kind of premium."
Ford has not yet revealed how expensive the new Focus will be, though they let slip a coy remark that it would be priced better than the Chevrolet Volt, and competitively with others. The Volt, a hybrid plug-in, currently sells for $41,000, while the Nissan Leaf, an all-electric, goes for $32,780, pre-credit.
And even though drivers can certainly save on gasoline money by going electric, George Peterson, President of AutoPacific, estimates that it still takes something like 12 years to pay back the electric price premium.
"Unless gasoline goes up to 5 or 6 dollars a gallon, you can't really economically decide that it pays back," said Peterson.
Aside from cost, range anxiety about the distance a car can drive on a single full charge is the major prohibiting factor of the all-electric vehicle. Though hybrids and plug-ins address the range issue by combining traditional gas engines with the electric component, all-electric cars mainly suit the lifestyle of urban drivers who have only short distances to go.
Though Ford has not released their exact efficiency statistics, they have said the all-electric Focus will be competitive with the Nissan Leaf, which provides about 100 miles on a full charge.
This will remain the case until a national infrastructure for electric charging is built. The owner of an all-electric car that runs out of charge on the side of the highway can't exactly expect a fellow driver to pull up with a portable charging station they way they might with a cup of gas.
"The electric infrastructure still has a long way to go in the U.S.," said Peterson. "There are not enough public chargers out there to fulfill the requirements of a broad-base infrastructure for an electric vehicle."
For now at least, early adopters of these new electric cars are likely to be green-minded citizens for whom affordability is not the main concern.
"Is it being viewed as a toy by people who want something cool, or is it really going to be sustainable transportation?" asked Bragman, "I think it's somewhere in the middle of that."
AutoPacific's research shows that only 2 to 3 percent of consumers today would consider buying an electric car.
"It's easy to sell 2000 units of any technology to early adopters," said Toprak. "The challenge is to sell them to Middle America who will buy on financial reasons and not because they look cool or for environmental factors."
Of course, looking cool isn't exactly a bad thing. Ford's decision to unveil the electric Focus at the tech mecca that is the Consumer Electronics Show, rather than at next week's North American International Auto Show, is a sign of increasing confluence between the automotive and electronics worlds. The Focus is CES's official car, a two-peat for Ford, whose Taurus bore the honor in 2010.
Ford has also led the way in automotive infotainment with their wildly popular Sync system, which lets users control music and hear audio text messages. It has been installed in 3 million cars since its introduction in 2007. Toyota just announced their version of Sync, called Entune, at CES this week.
Ford's ability to establish itself as a leaders of technology has been one important part of their astonishing recovery since the auto industry's major crisis in 2008. Ford was the only one of the Big Three domestic automakers not to take bailout money, and recently topped Toyota both in sales and in consumer preference.
"Their tech is two generations more advanced than any other automaker," said Bragman. "They've done a lot of things that have been very painful, but they've done them well, and now they're starting to reap the rewards."
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