Ford's ready-made electric car

Ford saved big money by partnering with parts supplier Magna to develop its competitor to the Chevy Volt.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Peter Valdes-Dapena, CNNMoney.com senior writer

euro_ford_focus.03.jpg
The electric Ford Focus, due out in 2011, will be based on the the next-generation Ford Focus. It wll resemble the European version of the car, shown here.
0:00 /3:28Electric car closer to market

Find your next Car


NEW YORK (CNNMoney.com) -- Ford is preparing to sell an electric car developed almost entirely by an outside supplier. While that may cut down on bragging rights - General Motors created the Chevy Volt in-house - Ford says it also cut down on costs and risk.

In other words, why invent the electric wheel when somebody else can do it for you?

Meanwhile, Ford's partner, auto supplier Magna International, is offering to do for other carmakers what it's done for Ford, and possibly more. If you're a carmaker and you want to sell an electric car, Magna says it's ready to design it and build it for you.

The electric Ford Focus, due out in early 2011, is largely the product of Canada-based auto parts and assembly supplier Magna International (MGA). Magna developed the car mostly on its own, building it inside a Ford Focus body for demonstration purposes.

Adding up the miles

Unlike the Volt, Ford's electric Focus will not be a "range extended car." In other words, it won't have an on-board gasoline-powered generator to pump out more electricity for longer drives.

The Focus will not burn gasoline and will go about 100 miles on a charge. Before hitting the road again, drivers will have to wait to recharge.

Meanwhile, the Volt will only go 40 miles before needing to burn gasoline - still farther than most people drive in a typical day, GM says - but it will have a 300 mile total range.

In August, 2008, Magna presented its electric car to Ford engineers and executives.

"We took a look at that execution and said, 'Hey, together we can really make this a proposition," said Nancy Gioia, Ford's Director of Sustainable Mobility.

Five months later, in January, 2009, Ford (F, Fortune 500) announced its intention to produce the car at the Detroit Auto Show.

Ford had been discussing electric vehicle requirements, in general, with Magna for more than two years, Gioia said, but that was the first time anyone outside of Magna had seen the car.

It was after the August meeting that Ford became seriously involved in the project, providing details and feedback to help make the car feasible for production and to make sure it was the sort of car Ford wanted to sell.

A leg up in electric driving

Magna, a wide-ranging auto industry supplier - it even has a European subsidiary, Magna Steyr, that builds vehicles for BMW, Mercedes-Benz, GM and Chrysler in an Austrian factory - has expressed interest before in designing, engineering and building an entire car.

0:00 /3:28Electric car closer to market

In this case, Magna founder and chairman Frank Stronach asked his engineers to develop an electric car that could be sold under any brand by any carmaker, said Ted Robertson, Magna's chief technical officer for the Americas.

"It's a generic system we were designing so it could be put into anybody's vehicle," Robertson said.

The Focus wasn't chosen because Magna wanted Ford as a customer, Robertson insisted. It was chosen simply because it was the right size, it was light and its design - particularly the suspension design - allowed engineers to experiment with different layouts for the car's electric drive systems.

"We needed to develop the parts not only in the computer, but we needed to build a vehicle to do a proof of concept," he said.

The car drives just like a gasoline-powered Focus, said Bill Pochiluk, an industry analyst with Automotive Compass. The electric Focus's 100-mile range will do just fine most of the time.

"This vehicles makes you wonder: why do we need the Volt?" said Pochiluk.

Ford could have developed an electric car on their own, but Magna's work allowed the carmaker to bypass a lot of expensive engineering and development work, Pochiluk said.

"This certainly leapfrogged a lot of what Ford had been thinking," he said.

Ford, in fact, would have developed some sort of an electric car on its own had Magna not come forward, Gioia said.

The electric Focus will go on sale in early 2011 and it will be based on the next-generation Ford Focus small car. By then, it should be Ford's second electric vehicle. The first will be a small electric work van that's scheduled to go on sale next year. Ford also partnered with an outside supplier, Britain's Smith Electric vehicles, to make the van.

Magna's agreement with Ford isn't exclusive. Magna plans to sell the system to other carmakers besides Ford and, said Gioia, Ford has no problem with that.

"In fact, we encourage it," she said. "We want Magna to be successful."

For Ford, the strategy is similar to the approach taken with the carmakers' popular Sync in-car entertainment system. That system, which Ford credits with boosting sales of its current Focus compact car, was developed in partnership with Microsoft and the software giant retains the right to sell it to other automakers.

If Ford had insisted on exclusive rights to use these systems, Microsoft and Magna would have had to charge much higher fees to cover their costs. That would have erased the financial benefit of having an outside company develop the systems.

In this case, Magna is even developing its own car body in case a a customer doesn't have one to use. And Magna can even produce the car in its factory, if a carmaker wants, said Robertson.

"If a car company doesn't have an electric vehicle and they want one," he said, "we'd be happy to do one for them." To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
These 10 food trends could dominate 2015 So long, kale. Here's what's expected to shake up the food industry next year. More
Beyond Russia: Geopolitical hot spots in 2015 Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More
These 20 antique guns could fetch big bucks Morphy Auctions in Pennsylvania is putting nearly 1,000 old guns on the block. Here are just a few. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.