When Ford Chief Executive Jim Farley split the company’s passenger vehicle business into two parts – one for electric cars, the other for gas-powered vehicles – Farley took on the task of the electric car business, a division called Model e. The assumption of many industry watchers was that whoever ran the gas-powered vehicle companies was then there to nurse this dying technology in its final years.
Except it doesn’t die, said Kumar Galhotra, president of Ford Blue, Ford’s internal combustion vehicle division. On the contrary, I said, it is booming.
“For someone who could be a nurse, I spend a lot of my time and investment developing [production] capacity for all of our Ford Blue vehicles,” CNN Business said. “So for me, Ford Blue is a story of growth.”
Basically, by keeping a firm foothold in the internal combustion world, Ford is taking advantage of customers who are losing access to other automakers’ gas-powered vehicles even as Ford itself rolls out new electric vehicle models.
]Ford has just unveiled a new Mustang coupe which, in particular, is not electric or even hybrid. The new two-door Ford Mustang was able to remain entirely gas-powered, Ford executives said, as the company meets its emissions targets using electric vehicles, like the Mustang Mach-E SUV, and plug-in hybrids like the Ford Escape PHEV. (Hybrids are also included in the Ford Blue division of Galhotra.)
But there’s still a market for internal combustion performance, and Ford has decided to serve customers who still want it, Galhotra said. Meanwhile, Stellantis has announced that it will stop production of the Dodge Challenger coupe and the closely related Dodge Charger in 2023.
“In this particular segment, in Mustang, even though the segment may be shrinking, there is a lot of speculation that our competitors may exit this segment,” he said. “So even if the industry segment is shrinking, we can grow.”
Unlike GM, which has publicly stated that it plans to sell only zero-emission vehicles by 2035, Ford has not set a deadline for manufacturing and selling gasoline-powered vehicles. Although Ford has had some success with electric vehicles such as the Mustang Mach-E and F-150 Lightning, they sell alongside gas-powered models in the same market segments. And Ford is also selling hybrid and plug-in hybrid models, while GM has said it will go straight to electric vehicles.
Ford focuses its gasoline vehicles in three broad areas that encompass all models sold by Ford, Galhotra said. These are enthusiast vehicles like the Mustang and Bronco off-road SUVs, versatile SUVs like the Ford Escape and Explorer and, of course, trucks like the F-Series and Maverick. In these areas, he said, Ford is always finding new niches to explore, such as with Bronco and Maverick, a small truck with car-like engineering. Both are newly introduced models in segments that Ford hasn’t previously competed in and they are doing well.
“We can’t make enough Mavericks,” Galhotra said. “We are completely exhausted.”
The majority of Bronco and smaller Bronco Sport customers are new to Ford, he said. About 60% of Ford Bronco buyers have not recently owned a Ford. Is it close to Ford’s so-called “conquest rates” of electric vehicles like the Mustang Mach-E electric truck and Ford F-150 Lightning. But Ford has sold more than 75,000 Broncos and more than 71,000 Bronco Sports in the first eight months of 2022, compared to about 26,000 Mustang Mach-Es. Similarly, Ford has sold almost 50,000 Mavericks and the majority of buyers of this little truck are also new to Ford.
To maintain sales growth, Galhotra said Ford can continue to develop and expand its various model lines. Bronco is already a family of models, including the full-size Bronco SUV and the smaller Bronco Sport. Each also has a variety of special editions like the Heritage models. Ford has successfully used a similar strategy with Mustang, creating seemingly endless variations, from the $27,000 4-cylinder Mustang Ecoboost to the $80,000 760-hp Shelby GT 500.
“I see the potential for Maverick to one day become a family,” he said.
Obviously, at some point gasoline-powered vehicles will be phased out, Galhotra allowed. But it’s not all clear when that will happen, and as other automakers shift to offering electric-only vehicles, Ford has an opportunity to boost driver sales. not ready to make the switch, Galhotra said. At the same time, of course, Ford will also offer electric vehicle options for those who are ready, he said.