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Mulally expects “major portion” of Fords electric within decade…

March 7, 2009

Source: Automotive News

SANTA BARBARA, Calif. (Reuters) — Ford Motor Co. expects electric vehicles will represent a “major portion” of its lineup a decade from now as the automaker breaks away from a recent reliance on pickup trucks and SUVs, CEO Alan Mulally said.

Ford-Magna electric Focus

“In 10 years, 12 years, you are going to see a major portion of our portfolio move to electric vehicles,” Mulally said at the Wall Street Journal ECO:nomics conference in Santa Barbara, California.

Ford has outlined plans for a range of battery-powered and hybrid vehicles over the next several years but the comments by Mulally represented one of the clearest indications of the automaker’s longer-term plans for electric car technology.

Ford was the first U.S. automaker to roll out its own hybrid with the Escape SUV in 2004. But Ford backed away from an ambitious commitment to hybrid development and sales just a year later as its own financial problems deepened.

In recent weeks, the No. 2 U.S. automaker has announced plans to introduce a battery-powered commercial van in 2010, a battery-powered small car the following year and a plug-in hybrid to challenge the Chevy Volt from General Motors starting in 2012.

The stakes are high because Ford’s stepped-up investment is coming at a time when the U.S. government is demanding steep increases in fuel economy and has put money forward to help automakers adopt new fuel-saving technologies.

“Ten years is going to come very quickly and I think we’ll have a significant

improvement in the fuel efficiency in the internal combustion engine,” Mulally said in response to a question about what Ford expected a decade from now.

“You’ll see more hybrids, but you will really see a lot more electric vehicles,” he said.

Ford just negotiated a new round of concessions from the United Auto Workers for a contract set to expire in 2011 and on Wednesday launched a debt exchange program intended to cut its automotive debt by up to about $10 billion.

Both actions are aimed at cutting costs in response to a collapse in auto sales in the United States and a deepening slowdown in key overseas markets.

Mulally said Ford was committed to shifting away from its recent reliance on light trucks for 60 percent or more of its sales so that more fuel-efficient passenger cars dominate.

“We can now make cars in the United States and we can do it profitably,” he said.

The global recession has brought gas prices in the United States down sharply from peak levels of last summer, but Mulally said Ford was building a strategy around longer-term energy scarcity.

“Over time, we are going to see ever-increasing prices for energy,” he said.

Ford, which has been lauded for recent quality advances, has tried to position itself as a competitor with Japanese imports in the U.S. car market and distance itself from its ailing cross-town rivals GM and Chrysler LLC.

Mulally, who testified last year before Congress when Ford was seeking a $9-billion letter of credit, said again that the automaker could complete its restructuring without government aid.

“We went to Washington to help GM and Chrysler, we didn’t need the money,” he said.

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