Traditional car manufacturers have been struggling to market electric vehicles. That could move as new models are launched by Ford, Volkswagen and others.
San Tan Ford, a dealer in the Phoenix area, invited car buyers a few weeks before Christmas to gawk at the Mustang Mach-E, a highly awaited electric car that Ford Motor recently began selling.
Some 200 people came to the gathering, many driving BMWs, Audis, Subarus and other brands that San Tan rarely gets as trade-ins. Ten individuals put down deposits, including three who arrived in Teslas, for a Mach-E.
“Just overwhelming, the level of excitement and excitement,” said the owner of San Tan, Tim Hovik. “When this thing is driven by you, the performance is, like, wow.”
Although Ford and the other major automakers in the world earn billions of dollars selling gasoline-powered pickup trucks and sports utility vehicles, they have not yet gained much ground in electric vehicles, the fast-growing Tesla-dominated segment of the auto industry.
This year, that could finally change. Several models with greater driving range will begin to be offered by Ford, Volkswagen and other automakers than an earlier round of Tesla challengers that failed to attract many customers.
Ford wants its new foray into E.V.s to be a smash hit in particular. With the exception of its best-selling pickup trucks, long before the pandemic sent car sales tumbling, the firm was struggling. The model lineup has long been considered outdated and uninspiring by many reviewers and car buyers. And investors value Ford at about $38 billion, about half as much as General Motors, and a far cry from the market capitalization of $800 billion for Tesla.
A new chief executive, Jim Farley, who took over in October, has vowed to streamline its operations and invest in electric and autonomous vehicles, the company recently announced it was shutting down three factories in Brazil. Mr. Farley’s first major test will be the Mach-E.
The company is betting that the car will succeed where others have partly struggled because, though it is called a Mustang, it is a spacious and high-riding S.U.V., which is favored over sedans by many American car buyers. The bulk of Tesla’s sales come from its compact Model 3 sedan. Other automakers are also preparing to launch electric S.U.V.s in the coming months, including Volkswagen, Nissan, BMW, Mercedes-Benz, Volvo and Hyundai. ford
Compared with Tesla models, some of the new entrants are also attractively priced, which could attract consumers who are interested in electric vehicles but have balked at paying premium rates.
The Mustang Mach-E and the Volkswagen ID.4, which is due in dealerships in March, go about 250 miles on a full charge — about the same as the cheapest version of Tesla’s Model Y — and start at about $43,000 and $40,000. The base Model Y starts at about $42,000, but the Ford and Volkswagen models are eligible for a $7,500 federal tax credit that will lower the final cost to well under $40,000, or close to the average price of new cars sold in the United States. The tax credit no longer applies to purchases of Teslas.
Start-up automakers will also put new cars on the road this year. Rivian, which is backed by Amazon and Ford, plans to start selling a luxury S.U.V. and a luxury pickup truck this summer. They are priced at about $75,000, but are intended for off-road use — an ability that Tesla hasn’t focused on, although the company aims to begin producing a pickup truck later in the year.
Electric vehicles account for just around 3% of global car sales, but over the next decade they are projected to grow rapidly. Electrics could, some experts say, outsell gasoline-powered vehicles globally by 2040. As a result, several car manufacturers are spending billions of dollars over the next few years to launch hundreds of electric vehicles.
“Mark Wakefield, managing director of AlixPartners, a consulting firm with a large automotive practice, said, “You have to be in this race. “The risk of missing it can’t be taken.”
In China and Europe, Tesla now faces stiffer competition, but it still dominates the US market. The company does not split out its sales by region, but analysts estimate that last year in the United States it sold 200,000 or more electric cars, more than all other manufacturers combined.
This year in the United States, the carmakers introducing electric vehicles say they are not trying to draw customers away from Tesla as much as they are trying to widen the pool of potential buyers for such cars. Tesla has primarily appealed to customers of high-income luxury car buyers and early adopters who enjoy owning the new, most sophisticated technology.
Dustin Krause, Volkswagen’s director of e-mobility in North America, said the ID.4 was aimed more at people who had never considered an electric car. He pointed out that Americans buy several million compact and midsize S.U.V.s every year. An electric car in that segment at an affordable price, he said, “suddenly opens consideration for a lot of customers who’ve been on the fence, and customers who never considered an E.V. before.”
Pat Sheridan, a technology marketing executive and beer-league hockey player in Los Altos, Calif., considers himself one such car buyer. Some of his friends own Teslas, but he wasn’t prepared to pay $40,000 or more for a small sedan like the Model 3. Tesla’s Autopilot driver assistance system, a big draw for Tesla fans, doesn’t interest him, he added.
But he discovered a 2020 Chevrolet Bolt filled with options when his ageing Volvo died in November. He liked that the battery range had recently been extended to 259 miles by General Motors. The automaker’s hefty discounts took the price down to just under $35,000. The hatchback shape of the car makes it easy to toss in the back of his hockey gear.
“For these more practical E.V.s, there is a market,” Mr. Sheridan said. “The sector is getting closer to serving an entirely different segment of people like me.”
Few electric cars are arriving with as much anticipation as the Mustang Mach-E. Ford had made electrics in the past that were built on the same underpinnings the company used for gasoline models. A few years ago, as Tesla sales were taking off and Ford’s profits began slumping, the company resolved to build an electric car from the ground up.
In hopes of enticing buyers, Ford named its first after its storied sports car. Some auto reviewers and aficionados have criticized the company for its name choice because the Mach-E is so different from other Mustangs.
“We wanted this vehicle to have character,” said Robert Iorio, chief engineer for the Mach-E. “The Mustang name is a link to a product that really resonates in the marketplace.”
Ford, which produces the car in Mexico, promised to start selling the car by the end of 2020 and in December delivered three to customers. It has taken orders, Mr. Iorio said, for all of the Mach-Es it expects to manufacture this year, about 50,000. The bulk will be sold in the U.S. and some in Europe. Sales will start later this year in China.
If the company sells as many vehicles as it claims it would, after the Tesla Model 3 and Model Y, the Mach-E will become one of the best-selling electric cars in the United States and could top the Chevrolet Bolt, around 20,000 of which were sold last year.
“Mr. Iorio said, “I think it will lift us right up there. “I think that in a different light, people will see Ford.”