| LOS ANGELES
LOS ANGELES Ford Motor Co will be slower to build electric-powered pickups and other larger vehicles because the batteries to power them are still extremely costly, Ford CEO Alan Mulally said on Tuesday.
The second-largest U.S. automaker is now electrifying the platforms used to build compact cars and mid-size sedans, a move that allows Ford to curb costs by building electric, hybrid and gas-powered versions of the same car on a single assembly line.
But for larger vehicles, "the electrical components are so much bigger and costlier," Mulally said at a meeting with reporters in downtown Los Angeles. "So I think the migration to the bigger vehicles will be slower."
Ford says American car buyers have increasingly focused on fuel economy since 2008 when gasoline prices shot past $4 a gallon. As a result, Ford has made improving fuel economy the centerpiece of its design strategy.
For now, Ford can better boost the fuel economy of its larger vehicles, which include the top-selling F-150 pickup truck, by lowering the vehicles' weight by using lighter materials.
"The value of light-weighting in the bigger vehicles is so much bigger than on the smaller vehicles," Mulally said.
Ford also forged a partnership with Toyota Motor Co last year to develop hybrid trucks and SUVs that will be ready to market by the end of the decade.
By 2020, Ford expects hybrids, plug-in hybrids and electric vehicles will comprise between 10 percent and 25 percent of its sales as oil prices rise and government standards on fuel economy and emissions grow stricter.
Cost has been the major curb on sales of low-emission vehicles: The battery used in an all-electric vehicle such as the Focus Electric, Ford's first all-electric passenger car, can cost between $12,000 and $15,000, Mulally said this week at a conference in Dana Point, California.
That would represent around a third of the Focus Electric's overall price of around $39,000. At the conference, Mulally said the batteries used in hybrids cost around $2,000 while those in plug-in hybrids can be between $7,000 and $8,000.
Building these types of cars alongside traditional gas-powered vehicles is one way Ford can maintain "reasonable margins" on those vehicles, Mulally said Tuesday.
"We're not doing loss leaders to subsidize some other altruistic reason," he said. "It has to make business sense otherwise we can't keep investing."
Vehicles built on the same platform typically have similar design and engineering characteristics and share parts.
Ford's push to electrify platforms differs from the strategy adopted by Nissan Motor Co, which builds its Leaf electric car on a separate platform. By contrast, Ford is building its 2013 Focus Electric at an assembly plant in Wayne, Michigan alongside the gas-powered Focus.
(Reporting By Deepa Seetharaman; Editing by Eric Meijer.)