Ford bets on an electric Mustang to charge its turnaround
The Mach E has become within Ford a high-profile test for a restructuring that has been marred by profit warnings, costly quality problems and the troubled launch this year of another important vehicle, the Ford Explorer sport utility.
For Chief Executive Jim Hackett, the Mach E’s aggressive design and futuristic interior represent a long-awaited, visible sign of the overhaul of the company’s product creation process that he has tried to explain to skeptical Wall Street analysts for the past two years.
By accelerating the “clock speed” of vehicle development, cutting overlapping product architectures to just five from 13 and extending the company’s most successful brands to new products, Ford could slash $20 billion out of a five-year, 2018-2023 product plan, Hackett told Reuters.
“This is the first thing we generated out of this new thinking,” Hackett said in an interview ahead of the Mach E unveiling. “We have a lot more coming.”
For Ford Chairman Bill Ford Jr., the Mustang Mach E puts together two previously conflicting goals: His desire for Ford to be a leader in clean cars and make the automaker carbon-neutral by 2030, and his personal love of the Mustang and its growling V-8 engine.
“We are really pushing our chips in on the table with this vehicle,” Ford said in an interview ahead of the Mach E’s unveiling. The automaker has said it will spend $11.5 billion developing electric and hybrid models by 2022.
The Mach E started with humble ambitions.
The SUV originally was to be what Ted Cannis, Ford’s global director for electrification, called a “compliance” play - an electric variant of a front-wheel drive internal combustion vehicle, aimed at generating emissions credits to comply with clean air regulations at low cost. There was no link to the Mustang’s muscle car image.
Boring electric cars were the norm for Ford and other legacy automakers. Then Tesla Inc (TSLA.O) in 2013 launched its Model S - an electric car that looked like a sporty European luxury sedan with a giant screen for a dashboard and entertainment and functional features that could be upgraded with over-the-air software updates.
Tesla’s market value is now higher than Ford’s.
Ford’s own customer research showed dull electric cars were a mistake, Cannis and other executives said.