Ford CEO reassures investors of EV plans as it pours money into electric F-150, Mustang-inspired car

An electrical charging port sits on the bodywork of a Kuga Vignale hybrid automobile displayed during a Ford Motor Co. launch event in Amsterdam, Netherlands, on Tuesday, April 2, 2019.Jasper Juinen | Bloomberg | Getty ImagesWith the automaker's first long-range electric vehicle set to be unveiled later this year, Ford officials said Thursday they're on the right path as they “reconceptualize” the company's vehicle lineup as well as its future.
Ford is in the midst of one of the most dramatic transformations the company has faced since founder Henry Ford threw the switch to start the auto industry's first assembly line rolling more than 100 years ago. The automaker is largely abandoning passenger cars in favor of SUVs and crossover vehicles, pursuing the development of self-driving vehicles and exploring the transition from a classic automaker into a provider of mobility services.
The automaker laid out plans last year to spend $11 billion on the technology by 2022 — up from its original target of $4.5 billion by 2020 — to develop 40 new all-electric and hybrid models. The company has already announced two EVs it plans to introduce next year: a fully-electric F-150 pickup and a “Mustang-inspired” electric crossover vehicle.
VIDEO1:2901:29Ford is investing $500 million in electric truck maker RivianThe Bottom Line “When there's new technologies, it takes a while, and there's a tipping point,” CEO Jim Hackett told investors during the automaker's annual shareholder meeting Thursday. “When it happens, you want to be there.”
Investors need some reassurance. While the company's shares are up by more than 33% so far this year, they're still down by almost 8% over the last 12 months. Sales of its first-generation EVs, like the Ford Focus Electric, have been modest at best. Hackett assured investors that more buyers will plug in. Company data shows one in five younger buyers would consider buying an electric vehicle at some point.
That's not far out of line with a study released by AAA on Thursday that found that 16% of American motorists it surveyed are giving serious consideration to an electric car for their next vehicle. The AAA report also said 40 million Americans would consider a battery-electric vehicle, or BEV — especially as prices drop, range improves and it becomes easier and quicker to recharge batteries.
Ford is clearly not alone.
Two of Europe's most powerful automakers, Volkswagen and Mercedes-Benz parent Daimler AG, launched sales of their first battery-electric vehicles this week. VW said it took about 10,000 advance orders for the new ID.3 crossover during the first day, even though the vehicle won't actually reach showrooms until next year. VW AG CEO Herbert Diess last year said his company is committing about $10 billion through 2023 to electrification. He also upped the number of battery-electric vehicles VW expects to sell by 2029 from 15 million to 22 million.
Japan-based Toyota plans to bring more than 10 EVs to market in the next six years, aiming to sell about 5.5 million battery-electric vehicles by 2030. The Renault-Nissan-Mitsubishi Alliance – which launched the world's first BEV, the Nissan Leaf, in 2010, is making a similar push.
Ford was an early proponent of electrification, rushing to market with a mix of conventional hybrids, plug-in hybrids and first-generation battery-electric vehicles, like the Focus Electric. But a variety of factors, including limited range and high sticker prices, limited demand. The automaker briefly hesitated before stepping up its efforts. But since Hackett replaced former CEO Mark Fields in a boardroom coup two years ago this month, he has ordered major new commitments to Ford's electrification, autonomous driving and mobility services efforts — including a “Mustang-inspired” crossover vehicle that's generated all sorts of buzz.
VIDEO3:3103:31Here's why Ford is the only auto stock Cramer endorsesMad Money with Jim CramerThe scant details and cult-following of the Ford's iconic muscle car has helped fuel speculation of what the electric version will look like. “Spy photographers” stake out the routes and locations where Ford is known to test its products, hoping to catch a glimpse of even a heavily camouflaged version of the vehicle.
“There's a lot of intrigue around this product,” said Hackett, adding that, “we're going to be telling our community more about it, but it is going to be a great story about Ford.”
Hackett shed little new light on the car Thursday.
“What we've done is reconceptualized [vehicle design] with all of the extra space that you actually retrieve using battery-electrics into a very, very unique vehicle that takes advantage of some inspiration from our Mustang brand,” Hackett said.
Whether Ford's bet on electrification will pay off is far from certain, as its earlier sales serve to remind observers. Nonetheless, there is a growing belief among those in and around the auto industry that battery power is the way of the future.
Ford plans to bring out a mix of hybrids, plug-ins and BEVs, betting that the unique characteristics of each will resonate with different groups of consumers.
In the Snowbelt, for example, where there are fewer public chargers and cold weather reduces range, analysts like IHS Markit and the Boston Consulting Group see stronger demand for the plug-ins that can switch to gas power when their batteries are depleted.
Rivian EV SUV.Adam Jeffery | CNBCMany experts believe that BEVs will be the long-term solution, a strategy underpinning new competitors like Tesla and suburban Detroit-based Rivian. EV ownership is expected to spike by 2030, according to the International Energy Agency, with an expected 125 million Americans owning an all-electric vehicle by that year.
Rivian revealed a pair of all-electric models, the R1T pickup and R1S sport-utility vehicle, at the Los Angeles International Auto Show last November and hopes to launch production within the next year. Rivian has raised more than $1.2 billion in capital recently, first lining up $700 million from a consortium led by Amazon. Ford kicked in the other $500 million. Rivian agreed to a new battery-powered electric vehicle for Ford as part of the deal.
The tie-up with Rivian will help Ford produce at least one, and likely several, new BEVs, according to industry analysts. But it won't slow the battery-car development program Ford already had underway for vehicles like the all-electric SUV that has gone by the codename “Mach One.”
If handled properly, experts contend, electric vehicles offer a number of advantages, including reduced – albeit displaced – emissions, lower energy costs, reduced vehicle noise and even more roomy interiors. That's because there's no engine under the hood anymore, Ford and most other manufacturers migrating to a skateboard-like platform where batteries and motors are mounted under the load floor.

Nissan: Nissan Group reports April 2019 U.S. sales

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Mitsubishi Wants UK To Give New Incentives To PHEV Drivers

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VW ID 3 racks up 10,000 deposits in first day

2020 Volkswagen ID Neo spy shots
Three years after Tesla started taking $1,000 reservations for its Model 3, Volkswagen is racking up similar orders for its upcoming ID 3 hatchback in Europe.

Perhaps not to the degree, sure. Tesla amassed 180,000 orders for its “affordable” long-range electric car in one day in the US, while VW took 10,000 first-day deposits on the day it opened reservations for the ID 3 hatchback.

DON'T MISS: VW names fully electric hatchback ID 3, starts taking deposits in Europe

Still, the advanced orders are a hopeful sign for VW, after Tesla, Nissan, GM, and other automakers got a head start in building long-range electric cars.

Volkswagen said the orders exceeded its expectations, and said that in some cases its computer systems couldn't keep up with the deposits.

READ MORE: VW releases video of electric ID hatchback testing in South Africa

The company is booking reservations for the first edition of the ID 3, the ID 3 1ST, which comes with the long-range 62-kilowatt-hour battery pack, as well as 2,000 kwh of free public charging at Ionity fast charging stations around Europe.

The 62-kwh battery is expected to give the ID 3 a range of 260 miles on the notably generous European WLTP driving cycle. A shorter range, 48-kwh, is expected to deliver closer to 200 miles.

CHECK OUT: VW ID Buggy teases potential of electric-car platform with some beach fun

VW says the ID 3 will go into production by the end of 2019—about six months later than its original estimate—and the first cars will be delivered in Europe in mid-2020.

Volkswagen has no plans to sell the ID 3 the US, though it does plan to import future electric cars based on the ID 3's platform to the US, starting with the ID Crozz later in 2020.

VW’s $2 billion penalty for diesel scam, Electrify America, builds electric chargers across US

Source: Electrify America
Electrify America charging station

Almost a year to the day after opening its first charging station, Electrify America says it is rolling out the country's fastest-growing network of fast chargers.

Funded by $2 billion from Volkswagen's 2016 diesel emissions settlement, it has a goal of building hundreds of stations and putting nearly 2,000 chargers in place by the end of this year.

Many of those will let battery-electric vehicle, or BEV, owners charge up nearly as quickly as they could fill a gas tank. Charging speed — along with the lack of a national network of charging stations — has been cited as a key obstacle to the widespread public adoption of electric cars.

“Longer range and faster charging times are critical to the widespread adoption of electric vehicles,” said Brendan Jones, the chief operating officer at Electrify America, during a conversation at the company's headquarters in Reston, Virginia. It's the equivalent of the classic chicken-and-egg problem.

EVs go mainstream

Extended-range vehicles, offering anywhere from 200 to nearly 400 miles per charge, are starting to roll out in large numbers from mainstream brands such as Daimler, Ford, General Motors and Volkswagen, as well as start-ups such as Tesla and Rivian.

Setting up a nationwide infrastructure is the next big challenge, according to many analysts. An August study by McKinsey & Co. projected it will cost as much as $50 billion to ensure public charging stations are as easily accessible as gas stations in three key markets — the U.S., Europe and China. The U.S. alone is expected to require an investment of as much as $11 billion, McKinsey estimated.

Several key players have entered the field and are starting to ramp up efforts to fill the broad gaps that exist across the country. These include Tesla, which has already put into operation 1,441 Supercharger stations across North America, the vast majority of them along U.S. roadways. Those facilities are only available to Tesla owners, but companies such as EVgo and ChargePoint are targeting the rest of the market. So is Electrify America.

Emissions settlement

Electrify America must spend that $2 billion by the end of 2026. The company, based in the suburbs of Washington, D.C., was created as part of Volkswagen's diesel emissions settlement with U.S. and California regulators.

The company is spending that money on a mix of consumer education and infrastructure, the latter drawing the vast majority of the funding. Though Electrify America is housed in the same faceless office complex as Volkswagen's U.S. headquarters, the settlement calls for it to operate as an independent entity. That was underscored by a network television ad the organization ran last year that featured a number of different electric vehicles, including those from Nissan, BMW and General Motors, but none from VW.

Electrify America's charging stations are being outfitted to allow any plug-based vehicle to connect, though Tesla owners will need an optional, proprietary adapter.

The first of its charging stations opened for business about a year ago. Since then, more than 160 have come online, with dozens more in various stages of completion. Each station features an average of four to five chargers, with a maximum of 10 at what are expected to become high-volume locations.

Building out

The goal is to have about 2,800 Level 2 and more than 2,000 Level 3 chargers in operation around the U.S. by the end of this year, said Electrify America CEO Giovanni Palazzo. To put that into perspective, the U.S. Department of Energy said a total of 54,638 public Level 2 and 3 chargers were in operation across the country at the end of 2018.

Electrify America's initial focus is on regions with high levels of EV ownership such as California and parts of the East Coast, he said. But it eventually plans to have charging stations that are no more than 70 miles apart along all major roadways in most states. Urban areas where EV ownership is expected to peak will have more of them.

The Level 2 systems, much like those that electric-car owners can install at home or find at many shopping centers and offices, provide 240-volt current at a rate that normally requires anywhere from four to 10 hours for a long-range vehicle to fully recharge. In many instances, Electrify America is targeting locations where owners who live in multifamily dwellings may not have on-site access to a charger.

The real transformation, industry observers believe, is the emergence of a Level 3 network. Around mid-decade, only a handful were open to the public in the entire country, but they are believed to now number in the 100s of stations and expanding rapidly, according to Palazzo and other experts.

Level 3

The first of these punched out 50 kilowatts of direct current, something that allowed for much more rapid charging — a Chevrolet Bolt EV, for example, can replenish about 80% of its charge in an hour or so.

Moving forward, Electrify America's new Level 3 systems will almost all provide a minimum of 150 kilowatts at 400 volts and many will push even further, taking that up to 250 kW and 800 volts. That's far more than most of the current crop of electric cars can handle. The new Porsche Taycan will be the first to be able to make full use of the technology, which can add about 20 miles of range per minute.

Source: Porsche
2019 Porsche Taycan

“That will let it recharge in about 10 minutes,” said Jones, “about the same amount of time as it takes to fill up a gas tank.”

To make things easier and speed up the charging process, Electrify America this week is rolling out a new smartphone app that can be used to locate its charging stations and see how long it will take for someone already hooked up to finish charging.

At the company's technical center, a short drive from its Reston headquarters, chief engineer Seth Cutler demonstrated to reporters last week what he hopes will further improve the customer experience and shave another minute or two off the charging process.

Tricky pricing

Normally, a user has to plug their vehicle in and go through a set-up process similar to paying for a tank of gas. But this time, as Cutler plugs a car into a charger prototype, everything is handled automatically. New software allows the charger to query the vehicle's on-board controller to find out how much power it can handle and how to bill it.

Pricing is still a bit of a challenge for EV owners. At home, based on typical U.S. energy rates of around 11 cents a kW, a vehicle like the Chevy Bolt, with a 65 kilowatt-hour pack, will cost less than $10 to “fill up.” And many owners are eligible for time-of-day rates that drop substantially when charging overnight.

That's why industry data show that about 80% of EV owners currently charge either at home or at an office during the day, noted Electrify America's Jones.

But the forecast is that more and more buyers won't have ready access to those Level 2 systems, while others will tap out their batteries while traveling longer distances, requiring them to plug into a commercially operated charging station.

Pricing can vary from company to company and even from one state to another. Charging companies typically offer discounted subscription services, but they also penalize nonsubscribers with “hook-up” fees of as much as $5.

More than gas

More often than not, motorists are billed on a per-minute basis, and that can add up if a vehicle is slow to charge, as I found out plugging in a Hyundai Kona EV to an EVgo charger in Ferndale, Michigan, earlier this year. After about 50 minutes, the battery crossover had gained only 80 extra miles of range on the 50 kW Level 3 system. The bill? Around $16, or 20 cents a mile. At the time, Michigan gas cost around $2.30 a gallon. A gasoline-fueled Kona, with mileage of 23 city and 28 highway, would have averaged less than 10 cents a mile.

While faster Level 3 chargers operated by Electrify America and other companies levy a higher fee when pumping out more current, the premium is modest, so it still works out to a lower final price. And that's before factoring in the convenience of not having to wait around for an hour or so.

Electrify America is now dropping its prices by 20%, which should make running an electric car while having to use public charging stations more cost-competitive with a gasoline vehicle, said Jones.

Yet another step some charging companies are taking will let their systems talk to one another and, in the process, accept competitors' subscribers without charging exorbitant hook-up fees.

Such steps will be critical to gaining acceptance for battery-electric vehicles, said Palazzo and Pasquale Romano, the CEO of ChargePoint.

In the red

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