Ford Roots for Higher Gas Prices, Expects Modest Sales for MKZ Hybrid
Over the course of the past few months, Ford officials have been quoted as saying that hybrids could make up as much as 25 percent of their global fleet by 2020. Whether or not it reaches that number, Ford is without a doubt, heavily invested in the technology. The carmaker has brought its hybrid development team in-house in anticipation of the 2012 launch of a brand new hybrid platform and the release of at least two new hybrid offerings that year. This fall, the Lincoln MKZ is also poised to be the first hybrid to come without a gas-electric price premium—a major breakthrough for the market.
With all of this in mind, you’d think that Ford executives would be pretty optimistic about the climate for hybrids—but evidently that’s not the case. Jamie LaReau of Automotive News reports that Ford’s vice president of global marketing, Jim Farley, told her the carmaker doesn’t expect much in the way of sales from its hybrids in the near future.
“You can’t sell a hybrid in today’s market,” Farley is reported to have said in a rooftop conversation at the media unveiling of the new MKZ hybrid. LaReau writes that Farley was equally pessimistic about the car he was there to celebrate:
“ When I reminded Farley he’s about to launch a hybrid, he calmly acknowledged that Ford doesn’t expect to sell 10,000 or so MKZ hybrids — even though Lincoln won’t charge a premium for the sedan’s gas-electric powertrain either. Ford is launching the car because it’s the smart thing to do and it rounds out the product lineup, he said. ”
The subject of that rooftop conversation was gas prices, which are widely blamed for souring what had been a booming hybrid market. Indeed, with gas prices relatively low, not as many new car buyers have been interested in paying the so-called “hybrid premium” that the MKZ is about to shatter. But even without that extra cost, the MKZ is a sedan that starts at a little over $35,000—making it less than ideal for today’s economic climate.
Sweating the Ticker
Farley isn’t the only executive at the company to bemoan low gas prices. Ford Canada CEO David Mondragon told an audience on Thursday that hybrid and electric vehicle offerings will be facing an uphill battle as long as gas remains cheap. “It’s hard to believe that I’m going to say this, but we need higher fuel prices,” admitted Mondragon.
That doesn’t mean Ford regrets its move into fuel efficient vehicles. In the same speech, Mondragon called the oversized gas-guzzlers that the carmaker used to be known for “dinosaurs,” saying that the company’s eyes were fixed firmly on the future, when oil prices are expected to eventually resume their seemingly inevitable climb.
Whether or not that happens as soon as Mondragon or Farley might like, carmakers will have to dramatically improve the efficiency of their vehicles in order to keep up with rising federal CAFE standards. But if consumers still aren’t buying vehicles at the higher end of the fuel economy spectrum a few years down the road, is it possible that the industry might consider getting behind a gas tax? It certainly wouldn’t be politically popular, but it might be a more certain route to 60 mpg than the CAFE is capable of delivering on its own.