Ford Motor Company's Global Electrification Strategy

Article excerpt

Ford Motor Company has developed global platforms for its vehicles, including hybrid electric vehicles and forthcoming battery-electric and plug-in hybrids. Providing electrification technologies is a key element of Ford's broader strategy of producing vehicles that have improved fuel economy and reduced greenhouse emissions. The breadth of this effort across a range of vehicle types--is unique in the automotive industry. Of particular importance is using the same vehicle platforms for electrified vehicles as for conventionally fueled vehicles in Ford's global strategy. Infrastructure development is a key element in the success of plug-in hybrid and battery electric vehicles. To this end, Ford is developing home-charging systems and communication networks that will enable drivers to find recharging stations.

Business Economics (2011) 46, 167 170.

doi:10-l057/be.2011.10

Keywords: Ford, electric vehicles, global strategy, sustainability

The NABE Policy Conference offerings during the last 10 years have been increasingly at the forefront of emerging economic policy topics, with subject matter experts participating in panel sessions or giving keynote addresses on important issues confronting global policymakers. This year's session on "Electric Vehicles and Clean Energy Standards" was no exception.

As chief economist at Ford Motor Company, I represent a global automotive industry leader, with about 166,000 employees and 70 plants worldwide. Ford manufactures or distributes automobiles across six continents. I was honored to represent Ford in this session.

Ford's automotive brands include Ford and Lincoln, and the company provides financial services through Ford Motor Credit Company.1 Through our company's global "One Ford" strategy. Ford has forged ahead lo create global platforms (that is, the underlying architectures of our vehicles) and to provide cutting edge vehicles with content and features that are characterized by "Quality. Safe, Green, and Smart." The purpose of this paper is to focus on the "Green" component in general, and vehicle electrification in particular.

Along with improvements in our operating results, Ford continues to make significant progress on a number of the environmental and sustain-ability issues that have been identified as top public policy priorities, including improved fuel economy and reduced vehicle greenhouse gas emissions. In 2007, we launched our "blueprint for sustainability" plan, a series of near-, mid-, and long-term product actions that address climate change, energy security and affordability issues. The goal of this plan is to reduce the carbon dioxide emissions of our U.S. and European vehicles by 30 percent by 2020 relative to the 2006 model year. The plan also commits us to being the best or among the best in fuel economy for every vehicle segment in which we compete. (2)

In the medium term (through 2020), Ford will fully implement known technologies to drive toward our sustainability objectives. These technologies include automatic stop-start (so that our vehicles save energy during the many times along a journey when a vehicle is waiting at a stop light or otherwise pauses), substantial weight reductions, and "low carb" diets for all our new vehicles. We will also add world-class battery electric and plug-in hybrid electric vehicles (PHEVs) to complement the Hybrid Electric Vehicles (HEVs) that Ford has already launched. Beyond 2020. our strategy will further leverage electrified vehicles, along with the utilization of alternative energy sources.

Ford customers have already begun seeing the benefits of our sustainability strategy. In today's market, as gasoline prices have risen above $4.00 per gallon in the United States since the September 2010 low of S2.70 per gallon, fuel economy has consistently been the number one reason for purchases of hybrid automobiles in the United States. The hybrid Lincoln MKZ is the most fuel efficient luxury sedan in America, and the hybrid Ford Fusion is the most fuel efficient midsize sedan in the United States. …