Ford planning electric Mustang

1960s muscle car repackaging power in SUV-type body

Ford Motor Co. on Sunday unveiled the new Mustang Mach-E, one of 40 electric and hybrid models the company wants to introduce by 2022.
Ford Motor Co. on Sunday unveiled the new Mustang Mach-E, one of 40 electric and hybrid models the company wants to introduce by 2022.

Ford Motor Co. is reinventing one of its marquee models -- the Mustang muscle car -- as a battery-powered crossover to become a player in the electric-vehicle market that is expected to take off in the coming decade.

In a splashy ceremony Sunday ahead of the Los Angeles Auto Show, the car maker unveiled the Mustang Mach-E, a hatchback with the familiar shark nose that it claims has the power to take on Porsche. When it goes on sale next fall, Ford hopes to convince mainstream buyers its electrified Mustang is an alternative to the Tesla models dominating the electric vehicle market.

And Ford, which exited the battery-car business last year when it pulled the plug on its slow-selling Focus Electric, is betting it's cracked the code on turning a profit on plug-ins. By building the Mach-E in Mexico, where labor costs are low, and with a price starting at $43,895, the automaker says it will avoid the losses automakers typically suffer selling high-cost electric vehicles.

The company says the Mach E will go 230 miles to more 300 miles per charge depending on how it's equipped.

The company is even considering making the car in China, depending on how the trade war plays out, Ford Chief Executive Officer Jim Hackett told Bloomberg News.

The Mach-E will make a profit "on vehicle one," he said in a Bloomberg TV interview. "That's surprising a lot of people because electrics have not had a history of making money. This will."

Hackett said it will turn a profit because the vehicle "creates the passion that follows with Mustang" and prices start in the mid-$30,000 when U.S. subsides on electric cars are factored in. "So it's attractive to customers."

Ford is building it in Mexico because it had an open factory there and it needed to be overhauled to build an electric vehicle, Hackett said. "As we start to adopt more electric vehicles -- we had capacity down there, we had no capacity in the United States -- we're going to have electric capacity here in the United States. They'll be building other electric platforms."

Still, it's a high-risk gambit. The Mustang is Ford's signature sports car, having sold more than 10 million units since it debuted in 1964 with simultaneous cover stories in Time and Newsweek. When Ford decided to abandon the traditional passenger-car business last year, it spared only one model: the Mustang.

For more than a half-century, the Mustang has embodied high-octane power and unbridled strength. And Ford will continue to make gasoline-fueled versions of the classic muscle car.

The Mach-E is not only the first electric version of the Mustang, it's also the first time it has been configured into a sport utility vehicle. That will test the elasticity of a brand built on low-slung speedsters.

"Calling this a true sports car would be stretching it," said Jeff Schuster, senior vice president of forecasting for researcher LMC Automotive. "The market obviously has gone in the direction of the SUV body type, that's what's selling. But the Mustang is not an SUV. It's been a sports car."

Ford, having struggled to sell more mundane electric cars, is embarking on a strategy to electrify its mainstay vehicles, starting with the Mustang and following quickly thereafter with a plug-in version of its top-selling F-150 pickup. It is part of $11.5 billion the automaker is investing to roll out 40 electric and hybrid vehicles by 2022. The idea is to show that Ford's electric vehicles can be fast and tough and are not just "compliance cars" intended to meet more stringent environmental regulations around the world.

Last year, pure electric vehicles made up only 1.5% of new vehicle sales worldwide, and the consulting firm LMC Automotive predicts that will rise to 2.2% this year. In the U.S., electric vehicles were only 1.2% of sales in 2018, and it's expected to be about the same this year.

But automakers see opportunity for growth, and with electric vehicles getting 250 miles or more on a single charge, worries about running out of juice on a daily commute are gone. Because of the added models and increased range, LMC predicts that they will make up 17% of global sales and 7% of U.S. sales in 2030.

First-generation electric vehicles, which mainly were retrofitted versions of existing models designed to meet government fuel economy standards, didn't sell well largely because they couldn't travel more than 100 miles between charges. But now, many can go beyond the distance people drive in one day with plenty of cushion.

"Seeing 250 miles as a real thing has been kind of a game changer in the electric car market," said Jake Fisher, director of auto testing for Consumer Reports. "There haven't been a lot of choices for a vehicle that really could take the place of a mainstream vehicle. It's a whole different animal now."

Stephanie Brinley, principal auto analyst for IHS Markit, said electric vehicle choices may expand before consumer demand does, but eventually people will buy them.

"The increased number of models with an electric drive train will contribute to an increase in sales in the U.S.," she said. "However, there is likely to be a period where the number of options will increase faster than demand and sales for each will be relatively low," she said.

Information for this article was contributed by Keith Naughton, Ed Ludlow and Will Davies of Bloomberg News and by Tom Krisher of The Associated Press.

Business on 11/19/2019

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