Yahoo Finance Ford teases F-150 reveal, plans to capture buyers not yet sold on electric vehicles
Pickup drivers worried about being forced to drive an all-electric vehicle need to just breathe. Not only will gasoline-powered trucks be around for at long time, but the maker of the bestselling truck in America just disclosed plans to keep traditional F-150 customers happy.
Ford CEO Jim Farley said he is hearing consumers who express apprehension about all-electric vehicles and has adjusted company strategy in a way that sets the automaker apart from competitors.
A deep dive into sales data over the past three years helps explain why he disclosed that Ford will reveal a refreshed Ford F-150 hybrid at the Detroit auto show in mid-September. Many competitors are touting a desire to shift completely to electric vehicles. Ford is pumping the brakes.
Ford plans to continues its push into hybrid vehicles, which use both gasoline and battery power, to accommodate consumers who want to slow down their pending divorce from the traditional fuel pump, Farley revealed after second-quarter earnings were announced last week.
While consumers are purchasing electric vehicles, the market pricing is still dynamic and Ford is losing billions on the pivot from old internal combustion engines (ICE) to battery electric. Meanwhile, traditional F-Series trucks are selling like crazy and continuing to generate profits that have sustained Ford for decades.
Farley also dialed back the Ford forecast to produce 600,000 electric vehicles annually by 2024, not 2023.
He spotlighted hybrids, which increase fuel efficiency for truck owners while allowing them to go to the gas pump in times of need rather than find a charging station to plug in. As automakers figure out how many EVs to build, and what prices will work, Ford says it will work to tip-toe consumers away from internal combustion engines into electrification.
It's a move that includes only one competitor: Toyota and its Tundra full-size pickup truck.
Ford CEO spells out the plan
What Farley told industry analysts after the company earnings, which exceeded Wall Street expectations:
"We maintain flexibility on ... when we reach 2 million total EV globalcapacity because we are balancing growth, profitability and returns."
"We have the flexibility to offer customers choice of ICE, hybrids and full electrics in the years to come."
"Our hybrid offerings are extremely popular. F-150 is the bestselling vehicle in the U.S. for 46 years. 10% of all F-150s and 56% of all Mavericks sold in the U.S. are sold as hybrids."
"We are adding hybrid options across our ICE lineup, and we expect to quadruple our hybrid sales in the next five years, and we're already No. 2 in the market last year."
"We believe demand for our internal combustion and our hybrid portfolio will be ... potentially longer and richer than most expected. ... We made sure Ford is profitable as we move through this ICE-to-EV transition."
"A couple of years ago we decided to continue our hybrid investment in our heavier vehicles. And those hybrid systems are quite different, let's say, to Toyota and the Japanese OEMs. And we have been surprised, frankly, at the popularity of hybrid systems for F-150."
"We never thought we would be at 60% hybrid mix for Maverick. It was far beyond our expectation. And so we're just listening to the market. We believe that ICE customers, Blue customers don't want to be left behind.
"We have a lot of choices between electrification, partial electrification and ICE. ... So all I am saying is you're going to see a lot more hybrid systems from us, but don't think of them in the traditional sense of an Escape hybrid or Prius."
"The hybrids I am referring to are not plug-in hybrids. They are vehicles without a plug."
Hybrid: How it works
A hybrid combines at least one electric motor with a gasoline engine to move the car, and its system recaptures energy via regenerative braking. Sometimes, the electric motor does all the work, sometimes it's the gas engine, and sometimes they work together, Car and Driver magazine wrote in a 2019 hybrid analysis.
Hybrid vehicles burn less gasoline, which means better fuel economy. Hybrid vehicle electricity comes from a high-voltage battery pack, separate from the car's conventional 12-volt battery, that's replenished by capturing energy from deceleration that's typically lost to heat generated by the brakes in conventional cars, Car and Driver wrote.
Hybrids also use the gas engine to charge and maintain the battery.
F-150 hybrid quietly sets an industry record
Since its introduction of the Ford F-150 hybrid during fourth quarter 2020 through June, the automaker has sold 103,709 vehicles. In the last three months, F-150 hybrid sales spiked 33% over the same period a year ago with 13,285 vehicles. It was the best quarter since its introduction. Meanwhile, the Ford Maverick hybrid is the No. 2 selling hybrid truck in the U.S.
Hybrid vehicles, which represented about 3.5% of the full-size pickup truck segment during second quarter, are up from 2.2% from a year ago. Overall, full-size hybrid pickup truck sales in the second quarter jumped 84% from 2022. During the first half of the year, the industry sold nearly 1.1 million full-size pickups; Toyota sold 14,280 hybrids while Ford sold 24,395 hybrids.
"Customers get better fuel economy with the hybrid, great towing capability, plus the convenience of an onboard generator at the job site or if power should go out," Erich Merkle, Ford U.S. sales analysts, told the Detroit Free Press. "Many people that work construction carry a portable generator around to job sites, but with F-150 hybrid it is integrated as part of the truck, thereby freeing up the space required for a portable generator for other things and not having the hassle of having to maintain a portable generator. We see hybrid pickups as a growth segment within the full-size pickup segment for years to come, as it provides so many additional benefits to the traditional truck buyer."
Mike Levine, Ford North America product communications director, said in contrast to the previously announced strategies of other automakers betting on a fast transition to EVs leading to the end of hybrids and ICE vehicles.
"We never said we would immediately abandon ICE," he told the Free Press. "We said we would offer customers choices to best meet their needs well into the next decade."
In this case the updates to F-150 and F-150 hybrid are expected to focus on style and technology. Various models of camouflaged F-150 trucks have turned up in spy photos on the internet in recent months.
EVs get headlines but hybrids growing in a big way
The Maverick midsize pickup compares in size to the Hyundai Santa Cruz but that competitor has no hybrid option. Ford offers the only hybrid in the segment. And Maverick hybrid sales grew from 2,311 in 2021 to 31,369 in 2022. The current trajectory indicates continued growth with 22,911 hybrids already sold during the first half of 2023, with additional capacity to build recently added. Maverick hybrid has gone from 42.2% of overall Maverick sales in 2022 to 53.9% for the first half of this year.
For the first half of the year, hybrids made up 6.1% of Ford's sales, with 77% being Maverick and Ford F-150 and the rest Escape and Explorer. Maverick and F-150 make up 4.7% of Ford’s total vehicle sales from January through June.
While the industry is seeing significant growth in electric vehicle sales, the hybrid sales numbers are worth noting:
From 2021 to 2022 to the first half of 2023, electric vehicle sales in the U.S. steadily grew from 3.2% (490,365) to 5.7% (810,466) to 7.0% (557,330), respectively.
Total Ford EV sales that include F-150 Lightning, E-Transit and Mustang Mach-E made up 2.6% of total Ford sales through the first half of this year. EV sales made up 2.8% of GM sales during the same time period, with new plans to not discontinue the Chevy Bolt after all.
Meanwhile, hybrid sales in the U.S. went from 2021's 6.1% (936,914) to 6.7% (956,087) the next year to 8.2% (647,351) in the first half of 2023. Sales are on target for more than 1 million vehicles for the first time ever this year.
While Ram and the Chevy Silverado directly compete with the F-150, neither the Stellantis nor GM pickups are available as hybrids. GM is planning to reveal its Silverado EV soon. As first to mass market in the electric vehicle space, Lightning makes up 1% of F-Series sales.
More: General Motors starts shipping Chevy Blazer EV, reveals price and range
Buyer, seller say hybrids fill a niche
Car dealer: Jeff King, vice president and general manager at Bozard Ford Lincoln in St. Augustine, Florida, drives an all-electric Mustang Mach-E. He told the Free Press he just talked a customer out of buying an electric vehicle because it wasn't a good fit. A hybrid better serves a Florida restaurateur who drives 1,000 miles a month and doesn't want to worry about finding charging stations, he said.
Truck buyer: Randy Jones, 68, a retired refinery worker from the town of Katy, Texas, just outside Houston, is the owner of a 2021 Ford F-150 hybrid truck with Pro Power onboard. He told the Free Press he thinks the hybrid is the perfect truck for everything from adventure to providing power at home during outages. "I use it for hauling my trailers, and ATVs and that type of stuff. When I’m doing that, I use the plug-in in the back for various things, like a tire compressor or a coffee pot. For what I do, I couldn't go all-electric. ... I need too much power (towing) to be all-electric. The hybrid supplies added torque and horsepower when I go through the mountains."
The gas-powered full-size pickups print money for the automakers. They're the lifeblood of the Big Three operations, by every objective measure.
Hybrid full-size pickup market share is strongest in Texas, followed by California and Florida, Ford told the Detroit Free Press. The sales patterns mimic gas-powered pickup sales. Michigan is also a solid hybrid market.
More: 2024 Ford Mustang goes back to the '80s in salute to a hero from Detroit’s darkest days
Analysts say Ford is hedging bets where others cannot
Industry analysts say Ford is uniquely positioned during this dynamic period.
Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said, "ICE vehicles, especially when comes to pickup trucks, are going to be around for a long time. The volume in full-size pickup trucks will include ICE engines for 15 to 20 years yet. ... Ford builds a million full-size trucks a year, so they have a lot of room to spread that technology across. It does not make sense for General Motors to introduce a hybrid now. The expense of GM developing a hybrid midcycle just as they are rolling out their EVs isn't likely to gain many buyers. Adding a hybrid now is likely to slow the transition to its EVs among the traditionally conservative pickup buyers."
John McElroy, host of the "Autoline After Hours" webcast and podcast, said, "Ford is hedging its bets. Chevrolet and Ram are going to continue building its ICE trucks. Ford’s got a pure electric, it's building ICE and continuing with hybrids. A lot of pickup buyers are not ready for an electric truck. They tow heavy loads, go long distances and an electric really isn’t for them right now. They’re going to stick with the internal combustion engine. If they can get better fuel economy by going with a hybrid ... a pretty attractive proposition for a lot buyers."
Sam Abuelsamid, principal analyst at Guidehouse Insights, a market intelligence firm, said, "It makes perfect sense for Ford to be doing this. They've had the hybrid for a couple years now with the PowerBoost system. That first iteration that they launched in 2021 was really designed more for power performance. ... What you see, the same as with gas trucks, efficiency drops by about half when pulling a big heavy trailer in back. But with a gas truck, it's a lot easier to fuel it back up again. I think there’s potential for Ford to grow the take rate for the hybrids on their trucks. The current F-150 hybrid and Tundra are pretty comparable on performance, but the F-150 is a little better on fuel efficiency."
Detroit auto show reveals in September
Detroit auto show organizers have announced that the Detroit Three carmakers will reveal a total of six vehicles at the Detroit auto show, running from Sept. 13 through Sept. 24 at Huntington Place in Detroit.
Contact Phoebe Wall Howard: 313-618-1034 or phoward@freepress.com. Follow her on Twitter @phoebesaid.
This article originally appeared on Detroit Free Press: Ford teases F-150 reveal, plans to go after buyers who don't want EVs
