Ford Feels Demand For EVs Is Too Low To Justify Fuel-Economy Requirements

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In a story we published earlier in the day, we looked at some of the comments made by Ford Motor Company President and CEO Mark Fields in an exclusive interview with Bloomberg. Notably, he told the publication that Ford would lobby president-elect Donald Trump to lighten the federal CAFE (Corporate Average Fuel Economy) requirements currently in effect.

That may sound like Ford is asking for permission to neglect the environment, but on the contrary, the automaker still plans to invest some $4.5 billion by 2020 into adding new electrified vehicles to its global lineup. Instead, it’s a matter of business; at the present, according to Fields, there’s simply insufficient demand for electrified vehicles to justify their essential role in meeting CAFE standards.

“In 2008, there were 12 electrified vehicles offered in the US market and it represented 2.3 percent of the industry,” the Ford CEO told Bloomberg. “Fast forward to 2016; there’s 55 models, and year-to-date it’s 2.8 percent.”

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The US government’s CAFE requirements come at a time when fuel is cheap, and customers are increasingly flocking away from cars and toward SUVs and trucks. In fact, according to the US Office of Energy Efficiency and Renewable Energy, the average per-gallon price of fuel dropped precipitously from its $3.64 peak in 2012 – $3.80 in inflation-adjusted dollars – to just $2.45 in 2015. Predictably, this has had an impact on consumers, who perhaps no longer feel it prudent to pay more for an unfamiliar, complicated electrified drivetrain.

Whatever reason, Mr. Fields is right; demand for EVs from Ford and its rival automakers is lacking. While the automaker is as committed to green technologies as any, Ford’s plans to push for lighter CAFE regulations are “purely good business,” writes Matthew DeBord for Business Insider. “Carmakers want to bolster their balance sheets now, while the bolstering opportunity is good, ahead of the inevitable downturn.”

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Written by Aaron Brzozowski

Aaron Brzozowski is a writer and motoring enthusiast from Detroit with an affinity for '80s German steel. He is not active on the Twitter these days, but you may send him a courier pigeon.

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