Bloomberg News

Ford’s Mulally Prepared for Gradual Growth in Battery Car Demand

April 17, 2012

Ford Motor Co. (F:US)’s Alan Mulally says the carmaker’s goal to more than double deliveries of electric- drive autos won’t stall should initial sales of the new battery- powered Focus hatchback start at a slower-than-planned pace.

The Dearborn, Michigan-based company this month is selling the $39,200 electric Focus that averages 76 miles (122 kilometers) per charge, without providing a volume target. Nissan Motor Co. (7201)’s Leaf hatchback, with a $35,200 base price and averaging 73 miles per charge, sold 9,674 units in its first full year.

Even selling fewer than 5,000 Focus EVs in the first year wouldn’t be a failure, Mulally, Ford’s chief executive officer, told reporters yesterday in Laguna Niguel, California.

“No, because we believe that the electrification of vehicles is going to continue as the battery cost comes down, as we move to generate electricity cleanly,” Mulally said at a conference hosted by Fortune magazine. “We see this as continually growing. This is a long-term journey.”

The average price of lithium-ion battery packs for electric vehicles fell 14 percent in the past year as production capacity exceeded demand, Bloomberg New Energy Finance said. Batteries cost $689 a kilowatt-hour in the first quarter of 2012, compared with $800 a year earlier, the London-based research company said today in a statement.

Ford, the second-largest U.S. automaker, is competing in a nascent market for vehicles powered wholly or in part by electricity that includes Nissan, General Motors Co., Toyota Motor Corp., Mitsubishi Motors Corp. (7211) and startups Tesla Motors Inc. (TSLA:US) and closely held Fisker Automotive Inc.

Sales Surge

Ford expects hybrids, plug-in hybrids, which travel short distances on electric power before an engine engages, and all- electric cars to account for as much as 25 percent of its new vehicle sales by 2020. Of that figure, conventional hybrids will account for the biggest share of sales, Mulally said.

Electric-drive vehicles were the fastest-growing segment in the U.S. auto market in the first quarter, according to data compiled by Bloomberg. Sales of those models rose 49 percent to 117,182 vehicles in the first quarter, from 78,527 a year earlier before Japan’s earthquake and tsunami pinched output.

Electric cars and hybrids are surging in tandem with regular unleaded gasoline prices, which averaged $3.90 a gallon on April 16, approaching the July 2008 peak of $4.11, according to AAA. Toyota (7203)’s Prius hybrid and GM (GM:US)’s Chevrolet Volt plug-in hybrid electric car each had record sales in March. Nissan Chief Executive Officer Carlos Ghosn repeated this month in New York he’s “bullish” that pure electric cars will capture 10 percent of the market by 2020.

Electrified vehicles secured 3.4 percent of the U.S. light- vehicle market in this year’s first quarter, up from 2.6 percent a year earlier, according to data compiled by Bloomberg. Hybrids fell to 2.2 percent of the U.S. market last year, down from 2.4 percent in 2010, after peaking at 2.8 percent in 2009, according to LMC Automotive.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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