We are moving into a new era where technology is radically changing transportation. People not only have more options when traveling from A to B, their journeys are becoming more intelligent and digital. Against this backdrop, traditional carmakers, once the bellwethers in mobility innovations, are busy catching up with new changes in the market.
Global automobile manufacturer Ford took the wraps off five new models this Tuesday in Chongqing, where its joint venture with local partner Changan is located. In addition to a brand new automobile lineup, the company has been laying out in several new initiatives that pave to the way to better days for Ford, including bigger plans for electric vehicles, connected cars and autonomous vehicles.
Why China, why electric vehicles?
It’s no secret that Ford is developing a special focus in China. This week’s event, what the company called its first global launch in China, is part of Ford’s plan to introduce over 50 new or redesigned Ford and Lincoln vehicles in the country by 2025. Of the total amount, 15 will be electric vehicles.
“China is already the largest market in the world for electrified vehicles, even though it’s very young. All the nameplates assembled at Chang’an Ford, for example, will be available for electrified options by 2015. That’s for both Ford and Lincoln brands and we are going to launch a third joint venture in China Zotye-Ford for exclusive engineering, assembly, and marketing of a new range of small electrified vehicles. They will be sold under a new local brand and won’t carry the Ford brand,” Peter Fleet, president of Ford Asia Pacific, told TechNode.
Compelling driving experience
China’s electrified vehicle market grew rapidly over the past decade. Sales of new energy vehicles (NEVs) in China may jump as much as 50 percent to more than 1 million units in 2018, according to China Association of Automobile Manufacturers. Government support plays a significant role in propelling the development of this industry.
As the market evolves, however, the state is planning to raise the barriers for new-energy vehicle makers to access subsidies and will phase out financial support by 2020. This could further raise the price of new energy vehicles (NEV), which are already pricier than traditional cars.
But for Mr. Fleet, this won’t bring as significant an impact to the NEV market as predicted. “As the incentives progressively come off, the cost of technology comes down,” he pointed out.
What’s more important is that the premium driving experience of electrified cars will offer users more possibilities while driving. “The vast majority of customers have zero experience of what an electric vehicle is like to drive, although they may have formed some value about it. I really believe it has nothing to do with these incentives,” he said.
“When I spend a day driving these vehicles, the first thing that strike me is the silence of the vehicle. The customers at the moment are used to that a car would make noise. In the future, they can have a car that is virtually silent. It means that you can have a wonderful quality conversation in your car or listen to high-fidelity audio in you car. You want to have a crystal clear telephone conversation over the hand-free system, you can do that.” Peter added. “Secondly, customers don’t have experience, and have no idea about performance feels of electric cars. If you calibrate the motor and calibrate the regenerative braking in a certain way, you can get a very direct driving experience where you are virtually controlling the car.”
When you can’t do it all, find local partners
In a localization move, Ford has partnered with lots of Chinese tech companies. Some of the cooperation goes beyond the core aspects of a vehicle.
“These are some of the lessons we have learned in China. When Ford started in China maybe it was a little bit of a view that you can do everything by yourself because we are a global corporate. We increasingly understood that success in China comes through multitude partnerships,” Fleet reflected.
In addition to joint ventures with Changan and Zotye, Ford has built a strategic partnership with Chinese tech giants such as Alibaba, Baidu’s Apolo Project for autonomous vehicles, and eDaijia for car maintenance.
Ford’s most recent test drive program in Guangzhou is a practical example of partnership with local companies. In the test-drive pilot launched in Guangzhou, Ford puts a thousand customers in three-day test drives in a kind of fun and innovative way. The interesting and dynamic part of the pilot is that they partnered with Alibaba’s big data to qualify the customers to make sure they have the ability and desire to buy cars, according to Fleet.
Building forces in a crowded market
Although Chinese electric vehicle market is quickly growing, it’s crowded with lots of competitors, be it Chinese automakers, or internet giants.
In order to build its strength in the sector, Ford said they are planning to provide a comprehensive range of clean energy solutions in China – hybrids, plug-in hybrids and full battery powered EVs – this will cover 70 percent of all Ford nameplates sold, including the full range from Changan Ford.
With competition heating up, electric vehicle companies start to get in that game of who will have the biggest range. Lot of startups are talking about 400km, 500km or even more. Fleet believes users’ driving experiences should still be the top priority.
“We announced our first global hybrid electric vehicle, which will be assemble in China.We are talking about a range of 450km and look at driving patterns of Chinese customers, that’s more than enough. Our electric vehicle through Zotye Ford will have a significantly larger range because they are targeting younger urban city dwellers or maybe lower city drivers,” Fleet told us.