Ford to announce hybrid joint venture
According to a report from Reuters, Ford Motor Company will on Monday announce that it has joined with Southern California Edison to create “plug in” hybrid technology. Southern California Edison is the utility that supplies power to the Los Angeles area and has long advocated development of electric vehicles and government initiatives to develop them.
The company claims that electric vehicles could be supplied with power without expansion of current generating facilities, provided that they were recharged at “off peak” periods. That claim is critical to “plug in” hybrid proponents, because critics of the technology have long cited data showing that “plug in” technology actually uses more energy than would be used by conventional internal combustion vehicles once the energy cost of creating the electricity is added to the energy bill. The claim by Southern California Edison is tacit acknowledgement that the critics are on to something.
Ford’s Chief Executive officer, Alan Mulally, and SCE’s International Chief Executive John Bryson (does an “international CEO outrank a mere CEO?) have scheduled a Monday press conference at the utility’s headquarters in Rosemead, California. (Guess so. Mulally’s going to LA, rather than Bryson to Dearborn.)
From the perspective of Ford, the question is whether this is anything more than a public relations stunt. Ford had once claimed that it would build a large fleet of hybrid vehicles for domestic sales, but sharply limited those plans after the launch of the 2004 Escape hybrid failed to meet expectations, selling poorly and costing a lot to produce. Reuters reports that only last month a Ford executive said that Ford was working on “plug-in” technology, but saw what Reuters termed “deep seated engineering problems with plug-in vehicles.” Linking up with a utility company, the expertise of which presumably is in making electricity, doesn’t seem likely to solve those problems any sooner.
Moreover, there remain underlying questions about the focus of the company. To survive in its immediate future, Ford desperately needs new products. It cannot afford to divert valuable engineering resources to problematic technology that may not pay off for years, if ever.
It seems more likely, then, that this is essentially a public relations effort, one designed to burnish the image of Ford as the House of Representative takes up the “energy bill” passed in June in the United States Senate. That legislation, which would raise CAFE fuel economy standards to 35 mpg by 2020, is opposed by all Detroit automakers, including Ford. Industry analysts have estimated that the legislation, if it were to become law, would add as much as $7000 to the cost of a domestically produced vehicle, and would likely bankrupt both Ford and Chrysler.