As we continue to parse through Ford Motor Company’s Q4 2021 earnings report, something has become clear. Despite all of the chatter and hype about going electric (see: F-150 Lightning, Mustang Mach-E, E-Transit, and others), Ford CEO Jim Farley sees opportunity to focus its engine-powered business around vehicles like its Mustang muscle cars or Bronco adventure vehicles. The company affectionately refers to these vehicles as its Icons, and their profit margins – along with the truck portfolio – will continue to propel the company forward.
“The profitability of ICE is very important because it gives us optionality, not only of scaling BEV, but also vertically integrating BEV, which is increasingly becoming important for a profit lever,” said Farley. “So we definitely want to push our ICE business as fast as far as we can.”
Opportunity In Engine-Powered Vehicles
While other Ford executives have talked about “sweating the asset” when it comes to ICE vehicles, Farley touched on just how new the lineup is about to be.
“We’re going into this transition with the freshest ICE lineup I can think of any of our competitors, not just in the U.S. globally,” he said. “But we think there’s… a ton of other levers that we can pull to improve the margins of our ICE business. We see our ICE business increasingly in kind of specialty groupings of passion brands like Bronco and Mustang.”
Ford Motor Company Chief Financial Officer John Lawler concurred.
“We continue to see a lot of opportunity in the internal combustion engine business,” said Lawler, who described Ford’s strong ICE vehicle portfolio as a “strategic advantage,” as automakers seek to pour billions of dollars into Electric Vehicle development; the most expensive transition the industry has ever seen.
Even as that’s the case, a lot of signs point to hybridization as a sort of bridge to the automaker’s full electric plan. Ford has even indirectly confirmed a PHEV for the Ford Bronco. Meanwhile, the Ford Mustang is also expected to see hybrid power integrated into its blood. An engineer let slip that one was on the table for the 2.3-liter EcoBoost and the 5.0-liter Coyote engines.
Adding to this, Ford CEO Jim Farley believes that many EV customers will hedge their garage with an ICE vehicle. Particularly a fun one such as a Ford Bronco Raptor or a Mustang.
“Our BEV customers will want (ICE vehicles) too,” said Farley during last week’s Wolfe Research Global Auto, Auto Tech, and Mobility Conference. “And maybe they just want it for the weekend. But we have the ability to offer our BEV customers specialty products for a very short time period when they need a truck, or they need a Mustang for a track day, or they want a Bronco for their three-day weekend. We can offer that others can’t.”
Hybrid Power Could Keep A Full Electric Mustang At Bay
Ford has patented a hybrid V8 with two electric motors, which could end up being some kind of new-age muscle car that still keeps the howl of a Coyote V8 around into the next decade.
Marketers will likely position an electrified Mustang with the angle of having improved performance, rather than focusing more on fuel efficiency, as fuel economy continues to be at the bottom of the priority list for customers. As for the S650 Mustang, such a radical powertrain isn’t expected right out of the gate, but it could find itself into the lineup as the product lifecycle marches closer to 2030. By then, a fully electric Mustang coupe is expected to hit the market.