Ford announces USD4.5-bil. investment in electrification, Focus EV updates, ride-sharing for employees

Ford yesterday (10 December) made several announcements on its ongoing mobility research programmes, outlined investment plans on electrifying an additional 13% of its product range by 2020, and announced a shift in its approach to product design.

Ford CEO Mark Fields announced the company plans to invest USD4.5 billion in electrified vehicle solutions by 2020, an amount he said that will be the most the automaker has ever spent over a five-year period on this technology. Ford says the investment will result in 13 new electrified vehicles for its product portfolio by 2020, at which point more than 40% of global nameplates will be electrified. As part of this investment, Fields also promised an updated Focus Electric, which will have an all-new DC fast-charger, capable of delivering an 80% charge in about 30 minutes and will enable a projected 100-mile range. That charge time is an improvement by two hours on current chargers, the company says. Additionally, the Focus Electric will receive a SmartGauge with EcoGuide LCD instrument cluster with real-time electric vehicle (EV) power usage information in customisable displays and a brake coach for teaching drivers how to use smooth braking to maximise energy captured from the regenerative braking system. The Focus Electric will go on sale in late 2016 and will be offered in North America and Europe.

Along with expanding the Ford company nameplates including electrification by 13 new models, among the elements that the USD4.5-billion investment will produce are expanding battery development globally, including Europe and Asia, as well as a USD2.1-billion investment in a battery laboratory at the University of Michigan, United States, to boost research and development, and expanding EV offerings to more global markets, including Taiwan, Korea, and China.

Ford also announced that it is shifting its approach to product development to an experience-based approach, from a function-led approach. "As both an auto and mobility company, we at Ford are going further than just designing the product to move people from point A to point B. We are considering the way customers interact with our vehicles as a unified experience, looking for ways to excite and delight customers and make their lives better," said Ford's global product development and chief technical officer, Raj Nair.

During a discussion in front of media and analysts, Nair described the change in approach and Ford's shift to observing customers in the research phase, rather than questioning them. "The challenge going forward isn't who provides the most technology in a vehicle but who best organises that technology in a way that most excites and delights people. By observing consumers, we can better understand which features and strengths users truly use and value and create even better experiences for them going forward," said Nair.

Ford is using insights from anthropologists, sociologists, economists, journalists and designers to "reimagine our product development process, create new experiences and make life better for millions of people", said Nair. To that end, Nair made the announcement that Ford is doubling the number of projects that use ethnographic research in 2016 compared with 2015. The company is calling the approach "experience-led design".

Ford also announced that its Dynamic Shuttle service is shifting from the experiment stage to pilot programme. The Dynamic Shuttle pilot programme will be housed on its Dearborn, Michigan, campus, but the pilot was developed from knowledge gained from Dynamic Social Shuttle experimental programmes run in eight cities around the world, one of 25 experiments announced in January 2015 at the Consumer Electronics Show (CES; see United States: 7 January 2015: CES 2015: Ford announces Smart Mobility Plan, 25 global experiments).

During a presentation on the Dearborn pilot project, Ford said that knowledge gained from the experiments in Edinburgh and London, United Kingdom; New York, US; Mumbai and Chennai, India; and Rio de Janiero and Sao Paulo, Brazil was that riders value personal space. Understanding that, Ford has built the Dynamic Shuttle service with storage space for small bags, USB ports, and has configured the seats to eliminate the centre row for easier ingress/egress.

The system in Dearborn will leverage the Transit Connect van, specifically outfitted for the task, as well as a Ford-developed application. A rider plugs into the app where they want to go, that information is routed into Ford-developed algorithms that determine the best route for the available buses, factoring in the destinations of other riders on the bus to minimise stops and riding time, and proposes the route to the user. Once the user accepts to proposed route, the trip is planned and a shuttle will pick them up. For the first phases of the programme, the service will be provided to 129 locations using 21 shuttles, and is expected to shuttle 300 employees per day and drive about 500,000 miles per year. Ford also confirmed that it is using the HERE mapping system for routing and driver directions. Ford also noted that experiences from the global "learnings" included reducing the amount of information a driver must write down (and later type into a system) and provide a tablet environment for drivers to interact with dispatch, receive directions, and provide feedback.

During a question-and-answer session following the programme's announcement, which IHS attended, Ford's head of research, Ken Washington, said that while Ford is looking at a system in which it has created the app, the algorithm, and created the vehicles that are part of this system, essentially any combination may be part of a final business solution. Ford, like other automakers, recognises the massive potential of the car- and ride-sharing markets, but is looking at the possibility of being the service provider as well as vehicle manufacturer. Washington said there is potential for such a solution to be "an additional value stream for our company and shareholders [along with vehicle production]… The two will feed and support each other, because the two are interconnected."

However, Washington also reinforced that this is a pilot programme. Ford has not determined what this might look like in final commercialisation form. It could be a Ford-owned and operated service or it could be a system licensed out for others to operate. Alternatively, Ford may ultimately put the learnings back into simply making vehicles exceptionally well suited to the need of ride-sharing. Washington also pointed out, "We understand our products. We know our electrical architectures and are uniquely positioned to install learnings into product." The researcher also said that Ford has shifted its autonomous project from research to a commercialisation effort, and that in four years, Ford will have a product that fully takes people out of the loop, though Washington did not say it would be ready to market in that timeframe.

Outlook and implications

Ford's investment in vehicle electrification will keep the company moving forward on meeting increasingly stringent fuel economy and emissions requirements globally. Meanwhile, the results from Ford's many ongoing mobility solutions experiments will leave the company with a broad and deep level of knowledge on global mobility needs that should leave it extremely well positioned to adapt to changes in the automotive business model going forward.

Challenges for the electrification of the automobile are largely centred on consumer demand, which is particularly difficult to gauge in periods of low fuel costs. On the other hand, government regulations are forcing automakers to develop these systems even ahead of any certainty on eventual consumer demand. Ford is not immune to this problem and is also being aggressive in the technology's development. According to the IHS Automotive alternative powertrain forecast, Ford will increase its sales of electrified vehicles from about 69,000 units in 2015 to about 381,000 units in 2021. Among the vehicles we forecast are slated for some level of electrification are the Lincoln Navigator and Ford Expedition, Lincoln Continental, Ford Transit Connect, Ford Explorer, and Ford F-150. The Focus Electric will have stiff competition from the Chevrolet Bolt, which promises to have a range of about 200 miles on one charge, and improvements are also expected to the Nissan Leaf's range (see United States: 30 June 2015: Chevrolet Bolt may arrive early, Nissan planning increased range – report).

Ford's experimental approach to exploring mobility solutions may seem to be extremely broad, exploring traditional and non-traditional automotive industry, but the overall approach is experimentation by design, with each programme having a clear mission - and a clear off-ramp for when and how to exit, according to Washington. The updates Ford provided on 10 December follow an update provided in June (see United States: 25 June 2015: Ford Smart Mobility plan moves to implementation phase). The company is moving relatively rapidly with these programmes, using what it learns to move to another phase of development, even if commercialisation on much of the research is still down the road. Ford is not the only automaker involved in this type of research, but the company is open about its programmes and structured in its approach.