24 March 2020

Ford expects to maintain a price premium for electric vehicles for almost 10 years, even if the price of battery technology comes down. Instead, as battery technology becomes less expensive Ford will use the freed-up margin to extend the range of EVs, something it sees as vital for consumer adoption.

Speaking exclusively to Auto Retail Bulletin, Andy Barratt, managing director of Ford of Britain, said: “We have discussed this with the Government. Their view was, as battery technology increases, surely the cost comes down. But actually, you trade that cost off against range extension.

“My view is that as the cost of battery technology comes down, what you want to do is redeploy that saving into extending the range of the vehicle rather than making a cheaper vehicle.”

Ford’s business transformation director, Graham Hoare added: “When do we get to parity? Many, many factors will determine that and I think it’s too early to call. But well into the second half of the decade would be my opinion. But I think on that basis, Andy’s point is clear. We must manage range anxiety.

“If we’re going to democratise these technologies, we’ve got to take that fear away. The range will be really important for business going forward – particularly for people that aren’t at the leading edge and that aren’t prepared to make some of the sacrifices when they start to take ownership.”

Mr Barratt added retailers would have to help customers view the purchase costs of an electric vehicle, which could be £200 more per month for the same size petrol or diesel vehicle, against the savings they’d make in fuel.

“Customers have got to look at it holistically,” he said. “They haven’t got the fuel costs, versus gasoline. We have to help them. We have to give them that true end-to-end cost calculator. If you look today you would think, ‘oh my goodness, the sticker price per month is a big increase’. But the reality is, if you’re putting £600-£700 worth of fuel in the car every month, that’s going to come down dramatically.”

In other news, Ford reports that it is planning to cull some nearly half of its 400-strong UK dealer network by 2025. The plan announced on 26 February aims to bring the number down to between 210 and 230 sites. The goal is to improve network profitability. Ford is by far and away the largest UK network; its next nearer competitor is Vauxhall with 276 sites which soon will downsize to nearer 260.

Tags: Andy Barratt, EVs, Ford, Graham Hoare, margin, range