Business

'We're all in': Ford doubles down on electrified vehicles

The company will invest $11 billion to put 40 models on the market by 2022.

January 15, 2018 at 11:18PM

Ford said it is increasing its investment in electric vehicles, an emerging sector that many believe will determine market leaders in years to come. (The Minnesota Star Tribune)

Ford Motor Co. will more than double its spending on electrified vehicles, amplifying investment in a segment that the auto industry sees growing from what's now just a fraction of the market.

The carmaker will shell out $11 billion to bring 40 electrified vehicles to market by 2022, Jim Farley, president of global markets, said during a presentation at the Detroit auto show. That's up from the $4.5 billion that Ford said in late 2015 it would invest through the end of the decade.

"This $11 billion you're seeing, that means we're all in now," Executive Chairman Bill Ford told reporters in Detroit. "The only question is will the customers be there with us, and we think they will."

Also at the show, Fiat Chrysler CEO Sergio Marchionne said he would step down next year, and the Chinese GAC Motor said it plans to be in the U.S. market by the end of 2019.

Many say the fight for the electric-vehicle market will determine market leaders in years to come.

After electric-vehicle darling Tesla Inc. surpassed Ford in market value last year, the second-largest U.S. automaker replaced then-Chief Executive Officer Mark Fields.

His replacement at Ford, Jim Hackett, has vowed to cut costs and drop some car models from the lineup to refocus the company's future on sport utility vehicles, trucks and electrification.

With battery costs declining rapidly and regulators around the globe cracking down on the internal combustion engine, automakers have been rushing to step up their game on all-electric models.

While the segment comprises less than 1 percent of annual deliveries in the U.S., global demand is expected to rise as governments phase out gasoline and diesel engines and batteries reach price parity with traditional powertrains.

Ford expects fuel economy and pollution standards to get tougher, "and rightfully so," said Raj Nair, head of Ford's North American operations.

"We believe man-made CO2 is contributing to climate change, and we've got our part to play," he said.

Of the 40 electrified models planned, 16 will be battery-only vehicles. The company identified just one model by name coming in 2020, called the Mach 1, that will be a performance battery-electric SUV.

"The real news for me is not just the doubling of investment, it's where we're playing," Farley told reporters. "We're starting to telegraph where we're going to play in electrified business around the world, and that is to electrify iconic nameplates, and it's going to be higher transaction-price vehicles."

At a different packed news conference, GAC Motor said it is on track to enter the U.S. market in the fourth quarter of next year and introduced two models at the show that likely will come to the U.S.: a concept gull-wing compact electric SUV called the Enverge that will go 370 miles on a single charge and a GA4 midsize sedan that will go on sale in China later this month.

GAC sold more than 500,000 automobiles in China last year, up 37 percent from 2016.

The company says it is negotiating with partner Fiat Chrysler about possible distribution of vehicles. It already has a research center in Silicon Valley and is working on another one in Detroit as well as a Los Angeles design center.

Fiat Chrysler's Marchionne, 65, told media at the show that he'll step down next year after leading the combined company since 2009. He said FCA will release a business plan through 2022 around June. The company will announce his successor after that.

Candidates include Mike Manley, who leads the company's Ram and Jeep brands, and Reid Bigland, who leads the Alfa Romeo and Maserati brands and U.S. sales.

Bloomberg and the Associated Press contributed to this report.

Ford Motor Co., Executive Chairman Bill Ford, stands next to the 2019 Bullitt Mustang and the original Bullitt, right, on the floor at the North American International Auto Show, Monday, Jan. 15, 2018, in Detroit. (AP Photo/Carlos Osorio) (The Minnesota Star Tribune)