* Flexibility, insourcing key to Ford's EV, hybrid plan
* Ford looking to take on Japanese rival Toyota
* Ford has 3 pct of U.S. hybrid, EV market; Toyota 66 pct
By Deepa Seetharaman
Aug 15 Ford Motor Co, vying to beat Toyota
Motor Co's record on fuel economy, is accelerating development
of its hybrid and electric vehicles by bringing the design and
production of key components in-house.
The No.2 U.S. automaker said Wednesday it will spend $135
million to design parts for its next wave of electrified
vehicles and double its battery testing capability by next year.
This summer, Ford began building its own hybrid
transmission. More than 1,000 Ford engineers are devoted to
advanced vehicle development and Ford plans to hire more.
These efforts allow Ford to complete projects more swiftly
and cut overall development costs, executives said. They also
allow Ford to react more nimbly to changes in consumer demand.
"We're not wed to any one specific technology," said Kevin
Layden, head of electrification programs and engineering. "I'm
free to play the field and I'm very comfortable with that."
Improving fuel economy is a cornerstone of Ford's vehicle
strategy. Ford expects hybrids, plug-in hybrids and EVs will
account for as much as 25 percent of its global sales by 2020.
Ford this year is launching five electrified vehicles,
including hybrid versions of the Fusion midsize sedan and C-Max
crossover. The C-Max gets 47 miles per gallon, beating the
Toyota Prius V, which gets 44 miles per gallon.
But Ford still lags far behind Toyota, which has dominated
the market with its Prius hybrid family. So far this year, the
Toyota brand has accounted for two-thirds of the U.S. hybrid and
EV market, while the Ford brand represents 3 percent, according
The high cost of batteries and electric drive components
represents another challenge. To combat that, Ford, like other
automakers, is increasingly looking to maximize the number of
models and parts that can be built on a single line.
For example, Ford now builds a hybrid transmission at its
Van Dyke Transmission Plant near Detroit. On one side of an
aluminum palette, workers build a conventional six-speed
automatic transmission. On the other side is the hybrid version.
Ford previously bought these transmissions from Japanese
parts supplier Aisin. Bringing production in-house
allowed Ford to shave 20 percent from development costs, partly
by saving on shipping and component costs. The model also gives
Ford the choice to build more or less depending on demand.
"It's not just cost savings. It's market opportunity as
well," said David Cole, chairman emeritus for the Center for
Automotive Research. "If your competitior has products but you
don't, that's a problem."
Ford is also seeing savings from bringing battery design and
testing internally after relying heavily on outside suppliers to
design and test batteries for its earliest hybrids.
The expansion of battery testing allows Ford to finish
projects at least 25 percent faster than with the previous
generation of hybrid and electric vehicles.
The automaker said its current hybrid system costs 30
percent less than the previous version. The new system relies on
a more-efficient lithium-ion battery, while the Ford's original
Escape SUV hybrid used a nickel-metal hydride battery.