Ford’s new Mustang Mach-E electric SUV is CEO Jim Hackett’s big bet on the future
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Ford’s new Mustang Mach-E electric SUV is CEO Jim Hackett’s big bet on the future
Ford has just taken the wraps off its vision for the future of the automobile.
With the Mustang Mach-E, the automaker is gambling that two areas of growth in U.S. car sales — SUVs and electric vehicles — make good stablemates. It’s tying them together with its famed muscle car nameplate.
“The market for this is right now,” said Ford CEO Jim Hackett.
Ford replaced former CEO Mark Fields with Hackett in 2017, looking to shake up the company amid falling profits and an unclear future direction.
“When I arrived I was trying to get the focal length a little further out and work back from that,” said Hackett in an exclusive radio interview with “Marketplace” host Kai Ryssdal. He also discussed whom he sees as potential buyers for the new Ford EV, and what he’ll do if this gamble doesn’t pay off.
Hackett is working to position Ford as an automaker ready for the future challenges of the motor industry: Preparing for a transition to electric and autonomous vehicles, but still making money today. For Ford, that means continuing to build the F-series pickup trucks — America’s bestselling vehicles — but also satisfying buyers looking for an alternative.
“Following Jim Hackett’s arrival as CEO, he formed a group entirely focused on building a business model around electrified vehicles, known as Team Edison,” said Sam Abuelsamid, analyst at Navigant Research. That team ditched the more traditional electric SUV that was under development, and replaced it with something that would be more exciting, he said.
On paper, the Mustang Mach-E is a compelling entrant to the small but growing selection of electric vehicles now on sale.
Hackett said the base model would be available in the mid-$30,000 range, but that is including a $7,500 federal tax credit for EV buyers — which Tesla and GM have already sold too many electrics to qualify for in full. Without that, the starting price is more like $43,000, with the higher-end versions going for up to $60,000.
Hackett also said the vehicle will be built in Mexico, but stressed that Ford didn’t lose any jobs in the U.S. to make that happen. In fact, “we’ve just signed a UAW agreement, and made a bigger commitment for investment in the U.S.,” he said.
The Mustang Mach-E’s specs mean comparisons are already being drawn with Tesla’s upcoming crossover, the Model Y, which has a similar performance and range across various configurations. The Mach-E also has a large touchscreen replacing most of the buttons on the dash, something that Tesla pioneered.
The Mustang Mach-E will also have competition from high-end electric SUVs from Audi, Jaguar and Mercedes, and more affordable vehicles from Hyundai and Kia.
The Mustang Mach-E manages to be distinctive, though.
“It’s different from what’s already available, and buyers do like to see new and different products out there,” said Stephanie Brinley, analyst at IHS Markit.
Calling the Mach-E an SUV will be a stretch for some. It’s perhaps better described as a crossover — a vehicle that aims to hit the sweet spot between the high driving position of a truck, and the compact parkabilty of a car. Building a larger vehicle than the traditional Mustang muscle car is a smart bet. American buyers are flocking to SUVs. Combined with trucks, they account for nearly 70% of sales in 2019. In 2018, Ford said it would stop making sedans for the American market.
The electric vehicle part of the Mach-E proposition is more of a wager. Tesla may be good at generating headlines, and its all-electric cars have been selling well, beating other, conventionally powered luxury vehicles. But electrics still make up less than 2% of U.S. car sales.
Ford will be hoping the electric Mustang becomes a halo car, a high-end example of cutting-edge technology that will lift perceptions of the entire brand. Porsche, synonymous with gas-propelled power and performance, has pulled off that trick with its electric Taycan sedan, said automotive consultant, Rebecca Lindland.
“I think Ford is saying, ‘Look we can do this even better,’ and use the Mustang nameplate for this technology,” she said.
The Mustang Mach-E is not Ford’s only big bet on electric. It’s promising a fully electric version of its ever-popular F-150 pickup truck. The automaker sold nearly 1.1 million trucks worldwide in 2018. If it can achieve even a fraction of that figure with its new electrics, Hackett’s big bet will be deemed a success.
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