Thursday, March 23, 2006
Hybrid/Alternative fuel talk again, I'm going to sound like a broken record here
I had an earlier post about the fact that Ford was putting incentives on the hood of Escape Hybrids, and that I thought this was unussual. Two readers commented on this situation, Shawn, who believes that people who buy Hybrids, are not your typical domestic car buyer, and Igor who points out that Ford is not the only manufacturer that is seeing a slowdown in Hybrid SUV sales. So I thought on their comments and the subject in general, and this is my take on it.
Shawn may have a point that many people that would buy Hybrids would not oridnarilly be domestic vehicle customers, but that doesn't mean that there isn't a place in the market for Hybrids. The idea is that people that wouldnt' normally buy Hybrids wil buy them. As gas prices go up and down ( and never down enough) people that wouldn't normally be drawn in by new trends, may want a Hybrid, thinking of the savings in fuel costs. So while Hollywood types and the cultural elite, may not be snapping up Ford Escape Hybrids, maybe some average Joe or Jane would. Escecially if they need a slightly larger vehicle than a Prius.
But Igor points to the fact that Toyota Highlander, Lexus and Honda Accord Hybrids are slowing down in sales. Now when I say they're slowing down, that doesn't mean they're not selling, just that the waiting lists are gone. This was innevitable, as gas prices normalized after the recovery from Hurricane Katrina. But the end of waiting lists is being overhyped by journalists and pundits. Hybrids will have a part of the market in the future, maybe not a huge part, but they're not going away. Especially in fleet sales in the future. The Hybrids that are still selling like hotcakes are the Toyota Prius and Honda Civic, because of their lower prices relative to the others and of course their higher fuel economy.
Ford has new Hybrid models in the pipeline, expect a Fusion/Milan and possibly an Edge version and later the 500/Freestyle. Ford hopes to sell up to 250,000 Hybrid units a year when they're fully up to speed. Spread over the different models this should lower the premium paid for a Hybrid slightly, and offer flexability to customers. But Ford should also consider Hybrid versions of their Focus and Fiesta models when they are replace/introduced in the US market. The trend for Hybrids is toward smaller vehicles. There are several common sense reasons for this. First the increase in economy is higher in smaller models, and since Hybrids are better suited to an Urban style of driving it makes sense that smaller models are easier to park in the city. So Hybrid versions of vehicles like the Focus and Fiesta, and possibly and EcoSport would be better for these markets.
Hybrid versions of 500/Freestyle and Fusion/Milan would be better suited to fleet sales, such as taxis, police cars and municipal services. Ford will have the systems ready by 2008 (?) for many of these models and it's a smart move.
But I've said before, Hybrids aren't for everyone, there has to be more options. The higher price of purchase and maintenance of a Hybrid will keep some people away. Ford and others need to suppliment their Hybrid efforts with Diesel and E85 models. Diesels are also slightly more expensive to buy than gas version of the same model, but maintenance is not more expensive, and they are known for lasting longer ( the powertrains anyway.) Add the Bio Fuel situation into the mix and Diesels can make better sense for people that do longer highway commutes and non urban driving. Ford has a small advantage in their Hybrid Escape, since they've been testing E85/Hybrids taking advantage of both technologies. Ford needs to increase the mix of E85 models too.
No single technologie will be enough to eliminate our dependance on foreign oil or help clean the air we breath. What we need is a mix of alternative fuel technology, Hybrids and smaller more efficient vehicles. Remember the Reflex concept that I love so much? It's got a Hybrid/Diesel powertrain with energy reclaimed for braking and solar panels in the roof, so it can achieve fule economy of 65 mpg. Not bad huh? And if the Diesel it's using is Bio Diesel, what little fuel it burns is cleaner than we could have dreamed of a decade ago.
Ford's "Driving American Innovation" campain, is more than words, they're working with all of these technologies and more. Ford has been working with Hydraulic Launch Assist and Hydrogen Internal Combustion Engines, as well as Direct Gasoline Injection (Mazda) so they are covering all the bases and if they can survive these tough times, can be in a position to respond to consumer's preferences. A good mix of these technologies is what I hope to see from Ford over the next few years.