The Core Problem: Ford is underpricing the Hybrid to meet Government CAFE standards

[X17Ridgeline]

I have had several requests about the source--that Ford is subsidizing the Maverick Hybrid, so here goes: 1+1+1 Just my logical conclusion and others are welcome to disagree.

First, from what I have seen other Hybrid models are more expensive then their base models and according to JD Power: Source https://www.jdpower.com/cars/shopping-guides/what-are-the-disadvantages-of-a-hybrid-car

"Due to their higher complexity, hybrid vehicles are considerably more expensive than their ICE counterparts. In addition to all the technology that is commonly installed in a conventional car, hybrid vehicles feature:

• electric motor(s)
• a large battery pack
• gear mechanisms that complement the necessities of transferring power from ICE and electric motors to the wheels
• substantial additional wiring
• an enhanced cooling system
• a considerably more complex central computer system."

2. Ford CEO Jim Farley is a true believer in decarbonization and wants Ford to be a leader not just corporate virtue signaling. So those who say Ford is making a statement by having the cheapest Hybrid I agree. Just like a grocery store has loss leaders, it is a marketing move and it is getting attention. That is what I mean by a subsidy--the higher profit products are subsidizing the Hybrid Maverick. Whether Ford is selling the Mav Hybrid at a profit only they truly know.

3. While CAFE standards are higher and different for some coastal states, the Federal EPA sets standards for national fleets based on volumes produced so sales everywhere count. I think the fleet calculations are complicated but one electric Mach-E Mustang 96 MPGe is not going to balance out 800,000 F series pick-ups. It has to be based on volume produced in a given model year. Thus Ford needs trucks like the Hybrid Maverick in volume.

Thanks for the conversation.

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[thevol]

Im kinda surprised they didnt put some dog of a motor in the base model, like a na 4cyl at 175hp for the 19k pricepoint. They may have figured out a way to make a cheap hybrid who knows, that ecvt does look pretty simple. I like the concept of a hybrid just not sure I completely trust ford and its software/electronics yet

 

[Falcon first]

I don’t agree with the hypothesis about Ford subsidizing the hybrid For EPA results. They limited it to 40% of production but probably could have sold twice as many as they will sell this year. Simple Economics 101 on supply and demand says they could have been $2,000 higher ($1,000 over gas) and sold just as many. I would have gladly paid $1,000 over the gas model just for the gas savings. I think it was all marketing related to shake up the market.
Bigger impact having the lowest priced hybrid of any vehicle in the market and a way to get car buyers into Ford or current Ford car owners to stay with Ford. Is it subsidized yes but probably not so much for EPA results or the would be building the hell out of hybrids and ecoboost would be the one they hardly build.

 

[atomguy245]

It was my understanding that sales volume didn't matter in CAFE standards? What mattered is the MPG of the fleet? It's like GM shoving a 4 cylinder in a Silverado nobody wants. They offer it and it improves the fleet's MPG.

They do have to actually sell them. Otherwise the automakers would just produce a single copy of a fuel efficient model if that's all they needed to.

 

[atomguy245]

Right now the next cheapest hybrids would be the Toyota Corolla, Hyundai Elantra, and Hyundai Ioniq, and all those start at just under $25k including destination. So the Maverick is dirt cheap at the moment. The Ford Escape Hybrid is just under $30k to start, but comes with many features standard that are extra on the Maverick.

 

[mamboman777]

I'll just leave this here and say that I think it's %40 hybrids for a reason... And I think this link contains the reason.

https://eelp.law.harvard.edu/2019/08/corporate-average-fuel-economy-penalties/

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