DETROIT--Ford Motor says consumers like hybrid vehicles but not the hefty sticker price that most hybrids carry.
That's a major change. Before, it says, consumers doubted the performance and reliability of hybrids.
"When we first launched a hybrid six years ago, many customers were concerned" about the battery, says Sherif Marakby, Ford's director of electrification programs and engineering. Customers asked: "'How long would the battery last?' 'How much does it cost to replace it?'" he says.
But batteries have proved to be long-lasting, Marakby says. It's now imperative to lower the cost of its hybrid system, he says, which will allow Ford to lower hybrid vehicles' sticker prices and boost sales.
"We're seeing that the loyalty rate on hybrids is very high," he says. "We just need people to get used to the technology, bring the cost down and the price down for consumers, and we believe it's only going to go up in terms of sales volume."
Next year, when assembly of the C-Max Hybrid crossover begins at the Michigan Assembly Plant outside Detroit, Ford expects that the cost of the vehicle's hybrid system will be 30 percent lower than that of the previous-generation hybrid system, which was introduced on the 2010 Ford Fusion Hybrid.
Marakby's goal is to cut the cost of the next-generation Ford hybrid system another 30 percent. Ford hasn't said when the next-generation hybrid system will be launched.
Ford has been cutting costs by bringing many technologies in-house, Marakby says. "By developing the hybrid system's design in-house and sourcing individual components to suppliers, Ford can use less people and less time to get the job done in an efficient manner," he says.
For example, Ford has developed in-house a battery system that will be manufactured at the automaker's Rawsonville, Mich., plant next year.
Marakby says: "We design the whole system from the tooling, the battery packs, the wiring, the sensors, the controls. We do the engineering, and then we also assemble all the components in our facility." The battery packs use cells Ford buys from Compact Power.
Ford also developed a hybrid transmission, which will be manufactured at a suburban Detroit plant. And Ford is working on the design for the battery system it will use in the 2012 Focus Electric, but Ford has not said which plant will assemble it, Marakby says.
Do it in-house
Ford also brought system integration and software development in-house. The latter includes the software used to send commands to hardware parts. It can control the battery and motors, as well as the total system, Marakby says. For example, motor control software runs the motor for optimal efficiency.
"We're finding we're able to commonize most of the parts used for our hybrids and the plug-in hybrids and also reuse much of the software and control systems. This provides us scale to reduce the cost, while at the same time offering us the ability to achieve the best performance and fuel economy," Marakby says. "By doing this, we're able to build on our base development to achieve better results for our next generation."
By 2020, Ford estimates 10 to 25 percent of its total sales will be hybrid, plug-in hybrid, or electric vehicles. Last year, sales of such vehicles accounted for about 1 percent of Ford's global sales.
Ford has firsthand knowledge of the shift it sees in consumer attitudes toward hybrids.
Ford priced the Lincoln MKZ Hybrid at the same level as the gasoline version. Both start at $35,455, including shipping. Ford's MKZ pricing decision was a way to test customer response. The automaker expected the hybrid to account for about 15 percent of total MKZ sales. Instead, since January, the hybrid version is tracking at about 22 to 23 percent of MKZ sales.
(Source: Automotive News)