Ford wants a bigger piece of the electric action

Not to be outdone by General Motors Comp.'s (GM) $20M USD expansion of its Global Battery Systems Laboratory in Warren, Mich., Ford Motor Comp. (F) and the University of Michigan (U of M) -- one of the nation's top ranked research colleges -- have announced an $8M USD battery lab of their own.

I. A "Neutral Ground" Lab

The lab will be located directly on U of M's Ann Arbor, Mich. campus, roughly 45 minutes west of Detroit, Mich.  Ford put up $2.1M USD to fund the lab, and is the only automaker involved so far.  In addition to U of M, other funders included state and federal support from the Michigan Economic Development Corporation and the U.S. Department of Energy (DOE), respectively.

Ford's battery research director, Tom Miller, says that the new facilities will be vital to Ford's competitiveness as the industry sees a slow and arduous electrification process.  He remarks:

We have battery labs that test and validate production-ready batteries, but that is too late in the development process for us to get our first look.  This lab will give us a stepping-stone between the research lab and the production environment, and a chance to have input much earlier in the development process. This is sorely needed, and no one else in the auto industry has anything like it.

It is way too early in the battery race to commit to one type of battery chemistry.  In the span of 15 years, the industry has gone from lead-acid to nickel-metal-hydride to the lithium-ion batteries used in Ford C-MAX and Ford Fusion hybrids on the road today. Others in the auto industry have placed their bets, but we are convinced a better solution will require input from a multitude of partners.

U of M lab
U of M is teaming with Ford to run the new joint lab. [Image Source: U of M]

He adds that the new lab will benefit from being a joint collaboration (and perhaps takes a bit of a dig at GM's new "non-neutral" lab), commenting:

We need to work on these problems together in a neutral lab setting.  This way, we all win. I think you are going to see a lot of companies in the battery supply chain come to Michigan to use this facility, in very short order.

This is important for the state of Michigan, too.  Previous investments have been focused on battery production, and now our state becomes a research core for batteries. The University of Michigan benefits, because the best and brightest from car companies, suppliers and academia will come here. In turn, that will attract the best students. We need to nurture the next generation of battery scientists, and it helps Ford that the campus is less than 40 miles from Dearborn.

Ford spent $135M USD on battery research in 2012, doubling its capacity globally, according to a Ford press release.

II. Summer Sales Saw Modest Pace

Ford currently trails GM, maker of the Chevy Volt, in electric vehicle sales.  The Volt -- the top selling EV -- moves a couple of thousands of units per month.  By contrast Ford -- who historically has been America's top domestic hybrid electric vehicle (HEV) seller (thanks to its veteran Fusion hybrid sedan) has seen much more sluggish sales, despite having three models on the market.  On any given month Ford's cumulative plug-in hybrid electric vehicle (PHEV) and battery electric vehicle (BEV) seldom topped 1,000 units, with a notable exception being the 1,259 units of C-Max Energi plug-ins sold in November 2012, the vehicle's first full month on the market.

2013 Ford C-Max Hybrid

Inside EVs says that in July Ford moved 407 units of its mid-size Ford Fusion Energi PHEV sedan, up from 390 units in May.  The Fusion Energi is one of the five available trim levels retailing for $36,195 USD after $3,750 USD tax credit and featurng a 21 mile electric range -- vehicles with larger batteries are eligible for up to a $7,500 USD credit.

And since its early launch month high the C-Max Energi couldn't break 500 unit sales until August, recording 433 sales in June.  The C-Max Energi retails for $32,950 USD ($29,200 USD) and gets roughly 20 miles in all electric mode.  

Meanwhile Ford's only battery electric vehicle (BEV), the Focus Electric, saw only a sluggish 150 sales in July.  The C-class (compact) platform Focus Electric has a range of 71 miles and is ironically one of Ford's more aggressively price options, retailing for $27,500 USD ($35,200 USD pre-credit).  It may seem a bit odd to see the BEV priced at over $4,000 USD less than the than C-Max Energi with less than a third of the range, but that's partially an artifact of the tiered federal EV credit structure.  Ford recently said it won't be making any big moves in terms of upgrading the Focus Electric for 2014, despite continued low sales
2012 Ford Focus Electric

Ford's has hybrid variants of the C-Max and Fusion which have seen much greater sales.  It also makes a Lincoln MKX Hybrid, which has sold relatively well in the entry-level luxury segment.

Those numbers document Ford's modest summer sales.  But this fall things have started to pick up for Ford.

In August it reported sales of:
Fusion Energi : 600 units
C-Max Energi 621 units
Focus Electric: 175 units
Total (passenger) EVs Sold: 1,396 units

... a record setting month.  And in September it moved:
Fusion Energi : 750 units
C-Max Energi 758 units
Focus Electric: 110 units
Total (passenger) EVs Sold: 1,538 units

III. Closing on Second... or Even First Place

In the traditional market Ford is narrowly behind GM in sales, while being narrowly ahead of Toyota.  The Ford brand is the top-selling traditional brand, ahead of GM's Chevy.

GM, Toyota, Nissan, and Honda Motor Comp., Ltd. (TYO:7267) all saw major dips in EV sales last month, in part because Labor Day fell in "August" in the auto industry's slightly asynchronous calendar, which counts the first weekday of the next month as the last day of the current month. (To the rest of the U.S., Labor Day happened on Sept. 2.)

In the PHEV/BEV electrified market, Ford is creeping towards Nissan (#1 in September) and GM (#2) in sales, followed closely by Tesla Motors Inc. (TSLA).
Notably, Fords 1,396 EVs only narrow missed surpassing GM's sales, which sunk to 1,766 Chevy Volts and 78 Chevy Spark EVs (for a total of 1,844 total EV units).  Tesla, who moved 1,000 units of the luxury Model S electric sedan, might have leapt into first place (incredibly) were it not production limited (inventory is essentially sold out for several months due to the sedan's wild popularity, despite a higher sticker price).

2013 Ford Fusion Hybrid

In the hybrid market Nissan Motor Comp., Ltd. (TYO:7201) notably has no product, despite being a game player in the BEV market.  Toyota has long seen a runaway lead in the hybrid market -- with about four times the monthly hybrid sales of any other automaker -- but Ford is the next closest.  The hybrid market remains the top selling EV market and a serious component of Ford and Toyota's monthly sales, versus the more nascent PHEV/BEV efforts.

Ford has fallen short of its big dreams promised in 2010 when Sherif Marakby, Director of Ford's Hybrid and Electric vehicles program expressed his hopes of delivering a 700 mile-range (gas+electric) PHEV by 2012.  To be fair, though, no one has achieved that.  Ford actually came the closest, achieving 620 mile ranges in its Energi brand PHEVs; by contrast the Toyota Prius PHEV has a range of 540 miles (11 mi. on electric), while the Volt has a range of 380 miles in the current model year, according to the DOE's federal fuel economy site.

Overall the industry has expressed mixed feelings about the EV transition with some vocally speaking outright blasting it (mostly on the luxury/sports car end), some like Chrysler/Fiat S.p.A. (BIT:F) calling it a low priority, and still others like Nissan/Toyota/Ford/GM/Tesla making it a top PR point of pride.  But ultimately the CAFE standard in the U.S. may force even the holdouts to begrudgingly electrify.  Even with fresh transmissions and a shift towards lighter engines, it may be very difficult to bump gasoline vehicles to the levels the federal government wants without some form of electrification, so it might be wise to at least get a steady start now, as Ford is doing.

Sources: Ford [1], [2], U of M

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