Ted Cannis orders a glass of wine. At a business lunch. Already, Ford Motor Company’s Global Director of Electrification doesn’t come across as your typically cautious, by-the-book auto executive, even before he launches into a freewheeling discourse on Ford’s newfound commitment to EVs.
Backed by floor-to-ceiling views from Tower 4 of New York’s World Trade Center, Cannis starts with the basics: The company’s $11 billion bet on an electric future, set to yield 40 electrified models around the world by 2022, 16 of them full EVs. That investment comes as Ford faces mounting pressure to accelerate its turnaround under CEO Jim Hackett. That restructuring hinges on a profound shift away from traditional cars — bye-bye, Fusion and Focus — to more SUVs, pickups, semi-autonomous and electric models. Ford’s hybrid F-150 pickup is slated to reach showrooms next year, along with its long-touted, “Mustang-inspired” electric crossover SUV. Those will be followed by an all-electric version of the F-150, a pickup that Ford recently teased in prototype form by towing a 1.25 million-pound load of railcars stuffed with F-Series trucks.
Q: Any projections on how big the electric-car business could be in the future?
A: We originally said that, in 2030, we could see one-third of global demand being hybrids. Obviously that’s still internal combustion, with no change of driver habits, but better from a fuel-economy and climate standpoint. The other third could be plug-in hybrid or full battery-electric. So fully two-thirds of the market, electrified in some form.
Q: Those kind of optimistic projections have come like clockwork in recent years, but they’ve always been wrong.
A: That’s what’s changed; you needed all the factors to come together. You needed EV costs and technology to improve. Compared with the original Focus Electric (in 2012), costs for batteries, motors and controls have fallen by about two-thirds. You needed the infrastructure, and you needed your neighbor to buy an EV. And you need to have enough choices: “Oh, you don’t have any electric pickups? Then you’ve got nothing for me.”
A prototype Ford electric vehicle testing in frigid, snowy conditions. (Photo: Ford)
Q: You tend to think of pickup people as traditional car buyers, leery of change. Is that a tough audience to reach with such a radically different truck, a hybrid or all-electric F-150?
A: You’re talking a massive eduction campaign. It’s like the early days of turbocharged Ecoboost engines. At the time people said, “Heresy!” Now, around 60 percent of our F-150 sales are Ecoboost. We did a survey of 3,000 people and asked “What do you think of battery electric vehicles?” Well, 42 percent still thought you had to fill an EV with gas or oil. Most people don’t know, and why would they? They’ve never owned an EV, most of their friends have never owned one. So there’s a steep learning curve. We have to show that this truck isn’t “as capable,” but “more capable.” Is the guy in the Midwest equally positive about electric compared to California? No. We see the different geographies and younger age groups that are more willing to early adopt. But we’re doing 800,000, 900,000 F-Series sales a year. Let’s say that only five percent, 10 percent of customers are interested. That’s still big numbers compared to other companies. And we know those customers intimately.
Q: Ford has invested $500 million in Rivian, the Michigan-based start-up that plans to bring its own electric pickup and SUV to market next year. Ford has also partnered with Volkswagen to use its electric MEB platform, for a Ford-branded EV in Europe around 2023. What’s the value there?
A: To cover more markets, weight classes and vehicle sizes, you need more than one electric platform. The Rivian deal allows knowledge sharing to create a Ford vehicle off their skateboard platform, built in the old Mitsubishi plant in Illinois. It’s a high-end platform, super capable, for an off-road-ready vehicle. That’s a very different application than your larger, work-based F-150. At the other end of the scale is VW, for a vehicle more tuned for Europe. We’ll also have an electric Transit van in Europe.
Q: It wasn’t that long ago, pre-Tesla, where people assumed the great mass of EVs would be tiny, economical hatchbacks and city cars.
A: The only goal then was efficiency and regulatory compliance. Now, compliance is a worthy goal. I’m very concerned about the climate, and the company is very concerned. We believe in climate change. But that’s not going to move people. They want to be safe in their vehicle, they want something better. So Ford is going to lean into what we do best: SUV’s, performance vehicles, commercial vehicles.Let’s go where our most loyal customers are, let’s go where demand is, and let’s go where the margins are. If it’s an F-150, it has be Ford-tough and capable. It’s it’s “Mustang-inspired,” it had better be fast.
Ford’s electric F-150 prototype towing 10 double-decker rail cars stuffed with 42 F-Series’ pickups, weighing more than 1 million pounds. (Photo: Ford)
Q: The current F-Series is the cash cow and key profit generator for Ford. In contrast, no company, including Tesla, has shown it can make money with EV’s. Is there a corporate mandate that Ford’s electric cars must turn a profit?
A: We’ve said publicly that the project will be “contribution-positive.” In Ford-speak, that means if we sell one, we make money. And where our profit margins are the best, that’s where we’re going to put the products, in many cases.
Q: Tesla’s Supercharging network seems a big part of its competitive and consumer appeal. Ford is planning a partnership with the VW subsidiary Electrify America, whose own charging network is growing rapidly. How important is the charging infrastructure?
A: That capability, to have both range in the battery and fast charging, has got to be part of the solution. Now, 80 percent of EV owners charge at home, and many of the rest charge at work. Public charging is a distant third. I’ve met with research customers in all three markets (U.S., Europe and Asia), people who’ve had vehicles for up to three years, and many have never used a public charger. But we’re going to make sure that, if you need to charge quickly, you can.
Q: Would you like to see more support for EVs on the public side?
A: It does require policy action, if you believe it’s important for the country. The data is crystal clear, that the policy actions that move people are the ones that encourage the customer: Federal or state incentives, HOV lanes or free parking. If you’re an F-150 owner with a job to do, and you’re stuck in traffic for three hours, having that HOV lane is a game-changer. On the infrastructure side, there’s a similar discussion. You want to go electric, you don’t have a place to charge at your apartment, so how are you going to do that? It’s challenging. But the cities really want to go forward; they’re the ones who want it the most.
[Note: This conversation has been condensed and edited for clarity.]