Traditional automakers have struggled to sell electric cars. That could change as Ford, Volkswagen and others introduce new models.
A few weeks before Christmas, San Tan Ford, a dealership in the Phoenix area, invited car buyers to gawk at the Mustang Mach-E, a highly anticipated electric car that Ford Motor recently started selling.
The event drew some 200 people, many driving BMWs, Audis, Subarus and other brands San Tan rarely gets as trade-ins. Ten people put down deposits for a Mach-E — including three who arrived in Teslas.
“Just overwhelming, the level of excitement and enthusiasm,” San Tan’s owner, Tim Hovik, said. “When you drive this thing, the performance is, like, wow.”
While Ford and the world’s other big automakers are earning billions of dollars selling pickup trucks and sport utility vehicles powered by gasoline, they have not yet gained much ground in electric vehicles, the fast-growing segment of the auto business dominated by Tesla.
That could finally change this year. Ford, Volkswagen and other automakers will begin selling several models with greater driving range than an earlier round of Tesla challengers that failed to draw many buyers.
Ford in particular needs its latest foray into E.V.s to be a smash hit. With the exception of its best-selling pickup trucks, the company was struggling even before the pandemic sent auto sales tumbling. Many critics and car buyers have long considered its model lineup tired and uninspiring. And investors value Ford at around $38 billion, about half as much as General Motors and a far cry from Tesla’s $800 billion market capitalization.
A new chief executive, Jim Farley, who took over in October, has pledged to streamline its operations — the company recently said it was shutting down three factories in Brazil — and invest in electric and autonomous cars. The Mach-E will be Mr. Farley’s first big test.
The company is betting that the car will succeed where others have failed in part because, while it is called a Mustang, it is a roomy and high-riding S.U.V., which many American car buyers prefer over sedans. Most of Tesla’s sales come from its Model 3 compact sedan. Other automakers, including Volkswagen, Nissan, BMW, Mercedes-Benz, Volvo and Hyundai, are also planning to introduce electric S.U.V.s in the coming months.
Several of the new entries are also priced attractively compared with Tesla models, and could lure buyers who are interested in electric vehicles but have balked at paying premiums prices.
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 make up only about 3 percent of global auto sales, but are expected to rise rapidly over the next decade. Electrics could outsell gasoline-powered vehicles globally by 2040, some analysts think. As a result, many automakers are spending billions of dollars to introduce dozens of electric models over the next several years.
“You have to be in this race,” said Mark Wakefield, a managing director at AlixPartners, a consulting firm with a large automotive practice. “You can’t take the risk of missing it.”
Tesla now faces stiffer competition in China and Europe, but it still dominates the U.S. market. The company does not break out its sales by country, but analysts believe it sold 200,000 or more electric cars in the United States last year — more than all other manufacturers combined.
The carmakers introducing electric models this year in the United States say they are not trying to lure buyers away from Tesla as much as they are trying to expand the pool of potential buyers for such cars. Tesla has largely appealed to high-income luxury car buyers, and early adopters — consumers who delight in owning the latest, most cutting-edge 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 when his aging Volvo died in November, he found a 2020 Chevrolet Bolt loaded with options. He liked that General Motors recently increased the battery range to 259 miles. Hefty incentives from the automaker brought the price down to just under $35,000. The car’s hatchback shape makes it easy to toss his hockey gear in the back.
“There’s a market for these more practical E.V.s,” Mr. Sheridan said. “The industry is getting closer to serving a whole other 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 is producing the car in Mexico, vowed to begin delivering the car by the end of 2020 and delivered three to customers in December. It has taken orders for all of the Mach-Es it plans to produce this year, about 50,000, Mr. Iorio said. Most will be sold in the United States and some in Europe. Sales in China will start later this year.
If the company delivers as many cars as it says it will, the Mach-E could become one of the top-selling electric cars in the United States, after the Tesla Model 3 and Model Y, and could top the Chevrolet Bolt, about 20,000 of which were sold last year.
“I think it’s going to lift us right up there,” Mr. Iorio said. “I think people will see Ford in a different light.”
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