Ford's Electric Car Strategy Rivals Toyota's Prius

The automaker will offer the C-Max in hybrid and plug-in versions only

Ford Motor Co. is launching a plan for hybrids and plug-in-electric vehicles it hopes is smarter than its rivals strategy.

The automaker has been watching Toyota eat its lunch when it comes to sales of hybrid vehicles, namely the Prius. And it has winced as General Motors has reaped truckloads of positive public relations over its extended range electric Chevy Volt.

But next year, Ford will have a car that can compete with the Volt and Prius. Ford will launch its C-Max, five passenger hatchback in 2012 and will offer it only in three environmentally friendly options: As a hybrid, an extended range "plug-in" electric/hybrid. The company did not say it would offer it as a full-on electric vehicle, not yet anyway.

The company is following the example of Toyota's Prius brand, which only offered as a hybrid. Ford hopes the strategy will better capture the imagination of consumers than just offering hybrid or electric versions of its other vehicles.

"This is a unique car with a unique identity in the marketplace," said Jim Farley, Ford's group vice president of marketing, sales and service. Farley came to Ford from Toyota, where he had extensive experience building the Prius plan in 2007, and has been a key executive in re-engineering Ford's product line and marketing,

How it will work for consumers

The Ford C-Max is a five passenger vehicle hatchback with a fairly high roof-line, making it a roomy alternative to a sedan or crossover SUV. It will come in two versions:

The C-Max hybrid version will behave like today's Ford Escape or Fusion hybrid, as well as the Prius, with a battery that can push the vehicle at low speeds and short distances, and boost fuel economy to well above 40 mpg.

The C-Max Energi plug-in hybrid will enable a driver to drive for many miles, possibly up to 40 miles like the Chevy Volt, before a gas-powered motor kicks in, so the driver never has to worry about running out of battery power.

View Gallery: 2012 Ford C-Max

By offering two versions of the fuel efficient vehicles on the same basic car, Ford says it will lower its costs, and spread the technology over a greater number of vehicles sold. That should result in lower costs for consumers. Vehicle prices, though, have not been set.

"We will be better than competitive with what is out there now and what we know is coming," says Farley.

There's a wide range of prices for hybrids and electric cars: The Chevy Volt costs $40,280 retail, but $32,780 after tax credits kick in. The Nissan Leaf full-electric vehicle costs $32,780. The Toyota Prius costs $21,650. The Ford Fusion Hybrid costs $28,600.

Toyota is expanding its Prius lineup with a slightly larger version, called the Prius V, a plug-in version, and a smaller sport version. The company is turning Prius into a sub-brand to be sold at Toyota dealerships.

Flexibility key to success

The jury is still out on how much consumers, long term, want extended range electrics and fully-electric vehicles. The Volt has been held back by its high price tag and the sluggish economy. Nissan took more than 10,000 pre-orders for the Leaf before the first one was delivered, but its limited range of 80 to 100 miles may put a ceiling on its popularity as many consumers express "range anxiety" about driving EVs.

Ford believes its ability to "toggle" among the two versions at a U.S.-based plant, according to consumer demand, will make the C-Max program more successful and profitable in the long run than Prius, Volt or Leaf.

"And the number of people who say that fuel economy is their leading consideration when buying a new car keeps going up ... that's what makes us confident," says Farley.

The hybrid and plug-in versions of the C-Max will go more than 500 miles on a tank of gas or combined use of battery and gas motor. The actual fuel economy figures will be set next year.

Why not offer the C-Max in just a gas version? Ford believes that consumers will respond better to the C-Max if its has a 100% alternative drive-train and green image. Clearly, though, if neither the hybrid or extended range electric sold up to expectations, Ford could offer it with a gas engine.

"The Prius has shown everybody that the majority of buyers like to advertise the fact that they have chosen a hybrid car, and the best way to do that is to keep the car unique and dedicated to that," said Aaron Bragman, auto analyst with research and strategy firm IHS Global Insight.

Celebrity appeal

The Toyota Prius has captured the hearts and wallets of green minded glitterati. Prius owners include such celebrities as Curb Your Enthusiasm creator and star Larry David, who has driven his Prius on the show; actress Jodi Foster, who recently told AOL Autos, "Why wouldn't you drive a Prius?;" and actor Leonardo DiCaprio. Ford is hoping that the C-Max comes to eclipse the Prius in American pop culture.

Ford offers a gas and diesel version of the C-Max in Europe. The automaker says it will offer the hybrid and electric versions in Europe, exported from Michigan. But, for now, it has no plans to offer the gas or diesel versions in the U.S.

Besides the Ford Escape, Ford Fusion and Lincoln MKZ hybrids, Ford is already offering an electric version of its Transit Connect small commercial van to buyers. And it will launch an EV version of the new Ford Focus later this year.

Ford is selling about 35,000 hybrids a year now, and sees that number tripling by 2013 when the C-Max is in full production.

Toyota has sold more than 2 million Prius vehicles worldwide since it went on sale in 1997. It sold 140,928 in the U.S. last year. Through May, Toyota sold 62,180 in the U.S. and is moving production of the Prius to the U.S.

An earlier version of this story said that the Ford C-Max would be offered as a full-on electric vehicle. In fact, Ford will only offer the vehicle as a gas-electric hybrid, and an extended range electric plug-in starting in 2012.

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