Ford preparing for a jolt to the car market

The Globe and Mail - Ford Motor, says Executive Chairman Bill Ford, is on the cusp of launching an entire line of electric cars globally and by 2020 about one-quarter of Ford's global fleet will be electrified in one way or another.

Writing in Fortune magazine, Bill Ford, the great-grandson of company founder Henry Ford, argues that for the first time since the Model T, "some of the most fundamental and enduring elements of the automobile are being radically transformed." He means the movement to replace the gasoline engine with an electric motor and a battery pack is about to start in earnest.

Ford Motor, he writes, will start this year "with an all-electric Ford Focus, followed by a plug-in hybrid and an all-electric version of the company's new global C-MAX vehicle, a sporty five-seater.

"And we're not the only ones going electric. GM (General Motors with the Volt) and Nissan (with the LEAF) already have electric vehicles on the road. The other majors have plans to launch their own versions over the next couple of years too."

So what does "electrified" mean?

For Ford and other car companies, an electrified vehicle has some major portion of its power delivery based on electric drive. The company is "hedging its bets" by developing hybrid, plug-in hybrid and fully electric vehicles, Ford wrote, because he isn't sure which technology ultimately will prevail.

Bill Ford also plays the national security card in his article. Asian countries, he writes, lead the world in the development of the lithium-ion battery and will likely retain that lead if the U.S. Government does not aid the American battery industry.

"I think it's a matter of national security to have a competitive American battery industry," Ford wrote. "Washington should increase r&d spending here unless they want to cede the development of batteries to other nations."

Perhaps the most interesting part here is how Bill Ford articulates a fairly comprehensive vision for a world where electric vehicles are commonplace. That is, he looks at the human element in all this and how other technologies can help to make EVs user-friendly.

Electric vehicles will have real-time information flowing through them," he writes. "You'll be able to use your smart phone to check how much juice you have left in your car and to find an empty charging station.

"In the near future cars will also be able to talk to one another in real time using GPS and Wi-Fi. The system will warn you when another car runs through a red light in an intersection, giving you enough time to brake and avoid a collision."

The potential environmental benefit is huge, he adds. "Smart" in-car systems will "route you away from traffic jams and even help you find free parking places – all of which cut down on the energy wasted while idling or looking for an empty spot."

The Ford Chairman predicts the gasoline and diesel fuels will only get more expensive in the future. Turmoil in the Middle East, he writes, along with China's growing energy demand and the increasing challenge to find more oil all suggest higher prices, which means "customers are going to care increasingly about fuel efficiency."

Finally, Ford says his company is "making money and has invested in significant amounts in electric car hardware, and it's ready to go, but the country is not ready to go right now."

So he's calling for a "smart" electrical grid and the creation of millions of car-charging stations in garages and in public spots across the U.S. To tie them all together, he wants governments and utility companies to create the information technology to tie the entire system together.

"The Chinese government predicts that 5 million electric vehicles will be on their roads by 2020, and they can almost ensure that those projections will be met. (Currently about 70 million cars ply its roads.)," he writes.

"Beijing and the regional governments are heavily subsidizing electric cars – cheap land, loans, and subsidies – and they have a huge number of government scientists involved in battery research at a scale no private company could match."

In short, government has a role. Without progressive-thinking government action, the alternative is for the United States and by extension other Western developed countries to fall behind developing nations such as China. His call to action is around the national security issue of energy independence combined with what he calls the "climate-change problem."

It feels odd to write this, but Bill Ford, the head of a car company, sees a role for government in his and his company's "green" agenda.