Written by Neal E. Boudette
Ford Motor’s latest offering seems like an oxymoron twice over: It’s a sport utility vehicle that’s electric … that’s a Mustang. It’s also Detroit’s biggest bet yet on a mass-market future for battery-powered cars.
The big automakers have been producing hybrid and fully electric vehicles for years. But almost all have been smaller models that found limited demand. Even the manufacturers often referred to them as “compliance cars” — built to help meet environmental regulations while they mainly turned out big internal-combustion vehicles that sold well and made hefty profits.
European luxury-car makers like Jaguar, Audi and Mercedes-Benz have added electrified models — all SUVs. Tesla, which has a fervent following, is on track to sell about 360,000 cars this year and is supposed to add a fourth model, a crossover vehicle, next year.
But with the Mustang Mach E, unveiled Sunday and coming to showrooms next year, Ford is aiming to make an even bigger splash. It is taking a calculated risk that automakers can find a market for electric vehicles of the size Americans have come to prefer. (Almost half the nation’s auto sales now are SUVs.) And it aims to persuade buyers to pay extra for battery power in an age of cheap gasoline.
“We’ve pushed all our chips to the middle of the table,” the company’s chairman, William C. Ford Jr., said in an interview. “I hope this will show we are now deadly serious about electrification.”
Ford is hoping some of the cachet of the original Mustang will rub off on the new model and boost demand for electric vehicles, which now represent just 2% of the market. Tesla has a commanding presence there now, accounting for almost 80% of nationwide sales of battery-powered vehicles last year. Tesla and its chief executive, Elon Musk, are expected to make headlines this week when Musk unveils an electric pickup truck.
The Mustang, however, has its own fervent following, even now, 55 years after it was introduced. The sports car was unveiled to great fanfare at the 1964 World’s Fair in New York, causing a sensation with its sleek design. Its long hood, short trunk and sloping roofline combined to make the car look as if it were rushing forward. (The new SUV will also have a long hood and sloping roofline, but no trunk.) And its affordable price — under $2,400 (about $20,000 today) — resonated as American households began adding second cars to their driveways.
In the car’s first full year of production, Ford sold more than a half a million, an astounding number by more recent standards. GM and Chrysler introduced competing models, a category that became known as “pony cars.” The Mustang car remains in Ford’s lineup and soon will be the only car it offers. The automaker is in the process of phasing out sedans like the Taurus, Fusion and Focus.
The new electric model is the first fruit of an $11.5 billion investment in electric vehicles that Ford announced last year. That it is an SUV may broaden its appeal in the current era as Americans abandon cars in droves and flock to SUVs and trucks. And contrary to the image of fuel-sipping vehicles as prim and proper, the new Mustang will be fast, with electric motors capable of generating tremendous power from a standing start.
General Motors is likewise spending billions to develop electric models, including a Cadillac SUV. Fiat Chrysler, whose investments in electric vehicles have been hesitant, is not as far along. For now, it plans to offer hybrid versions of its Jeep SUVs and Ram trucks, and possibly some battery-powered models.
While battery technology has improved enough to allow electric cars to travel 300 miles on a single charge, automakers must overcome drivers’ worries about running out of power while on the road — a phobia known as range anxiety. Tesla has addressed that concern in part by building a network of charging stations exclusively for its cars.
“That infrastructure is a big advantage for Tesla,” said Mike Ramsey, an analyst for the research firm Gartner.
Ford customers will be able to use charging stations operated by two companies, Electrify America and ChargePoint, which together have 12,000 locations around the United States. The base Mustang Mach E will have a range of more than 200 miles, said Ted Cannis, Ford’s global director of electrification. A higher-priced version will be able to go 300 miles on a charge.
The five-seat SUV borrows some of the features that Tesla has pioneered. Most of the interior controls are on a large touch screen on the center console, and Ford said it would be able to add or improve features through over-the-air software updates.
It will have a starting price of about $45,000, though customers will be able to take advantage of a $7,500 federal tax credit, Cannis said.
That will put the final cost in the same range as the Tesla Model 3 sedan, which sells for $39,000, and about half the price of Tesla’s own SUV, the Model X. Tesla vehicles are also eligible for a tax credit, but the credit phases out as each company achieves certain sales bench marks. For Tesla, the credit is down to $1,875, and it expires on Jan. 1.
The Mustang Mach E, said Sam Abuelsamid, an analyst at Navigant Research, “is probably not going to be a huge volume seller, but I’m cautiously optimistic they will be able to sell a decent number.”
Over the past 10 years, major automakers have introduced some two dozen electric cars in the United States, and almost all have flopped, mainly because they were aimed at helping manufacturers meet fuel-economy and emissions regulations as easily and inexpensively as possible — hence the term compliance cars.
In general, they were slower, less roomy and more expensive than comparable gasoline models, and often rather boring to look at. These cars tended to appeal only to small groups of die-hard environmentalists. Ford produced one model — a battery-powered version of its Focus compact. Last year, it sold only about 560.
GM has fared better with its Chevrolet Bolt, an electric compact. It sold 18,000 in 2018, although that is fewer cars than Tesla sells in a single month.
William C. Ford Jr., great-grandson of Henry Ford, the company’s namesake, said the automaker had been planning another compliance car. But he said it rethought its strategy in 2017, after the arrival of a new chief executive, Jim Hackett, who was charged with reinvigorating the company. Tesla’s sales were raising eyebrows in the industry, and Ford said executives felt the company needed a bolder plan to gain ground.
“We said, ‘What if we could deliver a vehicle that’s a rocket ship?’ ” Ford recalled.
Soon Cannis’ group — known as Team Edison — was working on an SUV. They gave it multiple electric motors to make it fast and sporty. And the team borrowed touches from a classic model.
By drawing on the Mustang name and look, “we think we can really break through,” Cannis said.
Ford was on hand Sunday evening for an event unveiling the car before the Los Angeles Auto Show. Hoping to add to the anticipation, Ford borrowed from the Tesla playbook by saying it would begin taking reservations immediately, for a $500 deposit.
The Mach E’s introduction will test not only Ford’s execution but also its timing. Ford thinks that the domestic market share of electric vehicles will quadruple to 8% by 2025, Cannis said. The Edison Electric Institute, a trade group for the power industry, has offered a similar estimate.
The Mach E will be followed by several more electric models, including a battery-powered version of the Ford F-150 pickup truck. Ford is confident that the moment is right.
“Technology has enabled us to deliver finally what people really want” in an electric vehicle, he said. “We have reached a point where customers don’t have to make trade-offs.”
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