Ford to spend $11 bn on EV, hybrid push with 40 new models

Ford Motor Co will more than double its planned investments in electric vehicles to $11 billion by 2022 and will have 40 hybrid and fully electric vehicle models in its lineup, chairman Bill Ford said on Sunday at the Detroit auto show.

Ford Motors chairman Bill Ford

The investment figure is sharply higher than a previously announced target of $4.5 billion by 2020, Ford executives said, and includes the costs of developing dedicated electric vehicle architectures. Ford's engineering, research and development expenses for 2016, the last full year available, were $7.3 billion, up from $6.7 billion in 2015.

While such vehicles account for only a fraction of the market now, carmakers clearly see it as a growth area. ''This $11 billion you're seeing, that means we're all in now,'' Bill Ford told reporters. ''The only question is will the customers be there with us and we think they will.''

Ford chief executive Jim Hackett told investors in October the automaker would slash $14 billion in costs over the next five years and shift capital investment away from sedans and internal combustion engines to develop more trucks and electric and hybrid cars.

Of the 40 electrified vehicles Ford plans for its global lineup by 2022, 16 will be fully electric and the rest will be plug-in hybrids, Jim Farley, president of global markets, said.

''We're all in on this and we're taking our mainstream vehicles, our most iconic vehicles, and we're electrifying them,'' Ford told reporters. ''If we want to be successful with electrification, we have to do it with vehicles that are already popular.''

General Motors Co, Toyota Motor Corp and Volkswagen AG have already outlined aggressive plans to expand their electric vehicle offerings and target consumers who want luxury, performance and an SUV body style - or all three attributes in the same vehicle.

Mainstream auto makers are reacting in part to pressure from regulators in China, Europe and California to slash carbon emissions from fossil fuels. They also are under pressure from Tesla Inc's success in creating electric sedans and SUVs.

Ford's additional investments in electric vehicles contrasted with many of the vehicle launches at the Detroit show which featured trucks and SUVs.

Daimler chief executive Dieter Zetsche hinted to Former California Gov Arnold Schwarzenegger during an exchange on stage next to the G-class that Daimler would someday have an electric version of the vehicle.

SUVs figured in Ford's electric vehicle presentation. Farley said on Sunday that Ford would bring a high-performance electric utility vehicle to market by 2020. The company will begin production of a hybrid version of its popular F-150 truck at a plant in Dearborn, Michigan, in 2020.

''What we learned from this first cycle of electrification is people want really nice products,'' Farley said.

Ford's shift to the electric vehicle strategy has been more than six months in the making after Hackett replaced former chief executive Mark Fields in May.

The plan was finalised in recent months after an extensive review, a person familiar with the process said. In October, Ford disclosed it had formed a team to accelerate global development of electric vehicles, whose mission is to ''think big'' and ''make quicker decisions.''

Some of the electric vehicles will be produced with Ford's JV in China aimed at the Chinese market. One aim of Ford's 'Team Edison' is to identify and develop electric-vehicle partnerships with other companies, including suppliers, in some markets, according to Sherif Marakby, vice president of autonomous vehicles and electrification.

China, India, France and the United Kingdom all have announced plans to phase out vehicles powered by combustion engines and fossil fuels between 2030 and 2040.

With battery costs declining rapidly and regulators around the globe cracking down on the internal combustion engine, automakers have been rushing to step up their game with regards to all-electric models.

While the segment comprises less that 1 per cent of annual deliveries in the US, global demand is expected to rise as governments phase out gasoline and diesel engines and batteries reach price parity with traditional powertrains.