Ford Motor Co (NYSE:F)’s New Hybrid Rivals Toyota Motors (NYSE:TM)’s Prius

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By Mark Michaels on August 21, 2014 Company, Technology & Software

Ford Motor Co (NYSE:F) announced earlier today that it will be introducing a new hybrid vehicle that runs on both gasoline and electricity in later 2018. According to sources who are close to company, this vehicle will compete directly against Toyota Motors (NYSE:TM)’s Prius.

The new hybrid will be a compact car, and will be Ford’s very first car model that is designed to be marketed and sold exclusively as a hybrid, not a hybrid spinoff of an existing vehicle model that runs on gasoline, like the Ford Fusion hybrid. The vehicle does not yet have a name. It will be manufactured in the company’s factory plant just outside of Detroit.

According to rumors, Ford could eventually offer multiple different body types and styles of the new hybrid car, similar to how Toyota has done with the Prius. The different styles would feature different versions of the gasoline electric drivetrain, such as a more expensive model that plugs in and can be recharged from an electrical outlet.

Ford’s new hybrid vehicle will probably be released as a 2019 model, which is twenty one years after the arrival of the original Prius in Japan. Toyota plans to debut its fourth generation Prius sometime late next year in 2015.

Chris Preuss, the spokesman for Ford, made a statement yesterday that the company has a policy of refusing to comment on future product speculation.

The new hybrid vehicle will most likely be manufactured in Ford’s Wayne assembly plant, located in southeastern Michigan. The company likely plans to aim for an annual production rate of 120,000 units.

Some of the technological specifications that the hybrid car will feature will be pulled and adapted from the current hybrid models in Ford’s lineup, including batteries, controllers, and electric motors. However, the new 2019 hybrid will likely use improved versions of these technologies and will provide drivers with a better fuel economy and a more improved range than today’s hybrids.

The company’s 2019 hybrid model has an internal code of C240. Its design and technology will be built upon Ford’s new C2 global compact architecture. This move will also help boost the next generation of Ford’s Focus and Escape models.

Like other major global car makers, Ford has been focusing its investing activities in hybrid technology in order to meet the increasingly strict regulations and standards for emission and fuel economy in North America, Europe, and Asia. However, the main issue is that consumer demand for hybrids still has a lot of ground to cover before meeting the sales projections of the auto industry.

For example, General Motors (NYSE:NM)’s sales of the Chevrolet Volt have only hit 10,625 units through the first 7 months of 2014, despite the company’s expansive advertisements. Sales dropped 9 percent from one year ago, despite heavy discounts from dealers.

Ford’s C-Max hybrid has also experienced decreasing sales figures. In the first 7 months of the year, sales of the C-Max fell 29 percent to 16,444. The company’s Fusion hybrid, however, have risen 24 percent to 31,092. However, the sales of the hybrid version of the car only account for about 1 in every 6 Fusion sold in the United States.

Toyota’s Prius, which has been on the market in North America since 2000, is still the leading hybrid vehicle in global markets. Its sales in the United States for the first 7 months of this year fell 11 percent to 127,776. Last year in 2013, Prius sales hit over 400,000.

The success of Toyota’s Prius can be partly attributed to the company’s efforts to market its eco-friendly car into a family of different hybrid models, ranging from the small Prius C hatchback to the van like Prius V. Prices for the Prius start at just $20,000.

General Motors’ Chevrolet Volt, however, has been held back by its higher price tag. Despite a cut in prices of $5,000 last year, the price of the Volt starts at $35,000. However, dealers of the Chevy Volt continue raising their discounts to up to $6,000, and also offer zero interest financing and low rates for leases.

Sometime next year, Chevy plans to release a new, second generation of the Volt as a 2016 model with redesigned features and improved performance.