Living Up to the Legacy
Aug/Sept 2013
Laura Black, Associate Senior Editor and Peggy Smedley, Editorial Director

The automobile market is rapidly changing, and so is today’s car buyer. Sales of alternatively powered vehicles are enjoying a pleasant surge, which could be the beginning of a much larger shift for conventional hybrid and plug-in hybrid electric vehicle models by the motoring public. This ultimately begs a series of questions: What are hybrid and plug-in hybrid electric vehicles? Who are purchasing these models? Just how big a slice of the car market do hybrid and plug-in hybrids currently possess? Are electrified vehicles becoming mainstream? How will these vehicles impact the average American’s electric bill? And will these vehicles reduce our carbon footprint? All of these questions are important, and it’s no wonder they are raised by automakers and consumers alike. But as noted at the outset, times are changing and so are the reasons for purchasing an automobile.

Just look at the evolution of the American household. In the 1930s, the average American home used about 500 kilowatt hours of electricity annually. Looking at 2011 statistics, the average American home uses more than 11,000 kilowatt hours of energy per year, a number that continues to creep up as more connected gadgets and products inundate the home.

Today’s smart car buyers know what they want, and know how to shop. They are demanding a vehicle that takes into account a connected lifestyle, while at the same time helps them remain energy-efficient at all times.

Enter Ford. Yes, Ford. It’s obvious how transformative Ford Motor Co.’s influence has been on the automotive industry, and now it’s extending that vision into the American home. Ford has a vision for reducing energy consumption to help the typical American home save about 60% a month on a typical electric bill and 55% in terms of carbon dioxide in the environment.

But let’s rewind to the beginning. This will help to fully understand how America’s first automobile manufacturer came to where it is today with its electric and hybrid vehicles, and how it ascertained the way in which the future will impact not only automobiles, but a whole ecosystem of connected objects from homes to roads. In 1903, with $28,000 in cash, Henry Ford started Ford Motor Co. The company’s milestones throughout its first century include introducing the world to the Model-T, acquiring the Lincoln brand, developing a relationship with the United Automobile Workers union, playing a role in developing and operating NASA’s Mission Control Center for the Gemini and Apollo space programs, early participation in the production of consumer electronics and home appliances, and, of course, involvement in developing alternative fuel technologies, among many other contributions to society.

Ford himself was a conservationist who preferred harnessing nature as an energy source and using zero emission hydroelectric energy. In fact, Ford designed a model of the Fordson tractor that would burn alcohol as well as fossil fuel. This particular model of the Fordson wasn’t put into production due to high distillation costs. From 1932 to 1942, Ford also produced its own brand of alternative fuel called “Benzol.” Ford additionally looked for ways to reduce waste in his factories.

Fast forward to 2004. Roughly a century after Henry Ford started his business, Ford Motor Co., introduced its first hybrid-electric SUV, the Escape Hybrid. From 2004 until October 2011, roughly eight years passed before electrified vehicles reached 2% marketshare, according to Ford. As of October 2012, and with more hybrid car options than ever before, the industry is now seeing about 4% of electrified products in sales. What does this mean? The market is growing—quickly—and can no longer be referred to as a niche market.

The numbers look even better according to the Electric Drive Transportation Assn., which reports the automotive industry saw hybrid vehicles climb to 163,915 in the U.S. from January 1 through April 30, up from 146,107 during the same period from last year. Even plug-in cars soared to 31,948, more than quadrupling from 7,942 during the same time period the previous year.

“Our hypothesis and what we are seeing from the data is that adoption that took eight years to get to the first 2% but only took 12 months to get the next 2% (indicates) an acceleration in what customers are adopting this technology,” boasted Ford’s Global Director of Infrastructure and Vehicle Electrification Michael Tinskey during the Connected World magazine Ford Tweet Chat and The Peggy Smedley Show broadcast at the Connected World Conference in June in Santa Clara, Calif. In fact, he now calls it a tipping point for electrified products.

More so, the company continues to contemplate the future and predicts cars are going to play a much greater part in our everyday lives, connecting to roads and homes and allowing consumers to live a completely connected and energy efficient lifestyle.

Driving EVs Forward
What exactly is the difference between a hybrid and an EV (electric vehicle), and how do you determine which is right for you? The U.S. EPA (Environmental Protection Agency) defines hybrid electric cars as vehicles that combine features of internal combustion engines and electric motors. In comparison, EVs are 100% electric. Hybrid vehicles also do not need to be plugged into an external source of electricity to be recharged, and most operate on gasoline.

Ford, in particular, offers three different types of “electrified” products: a hybrid can be refilled with gasoline, but also captures regenerative braking; a plug-in hybrid that uses the same technology, but with a larger battery that can charge using wall electricity; and 100% electric vehicles.

Breaking down the different types of electrified vehicles, the all-electric car (Ford’s Focus Electric) is a good fit for a consumer who has a fixed route, a shorter commute, and potentially has access to charging infrastructure at work and at home. The plug-in hybrid (Ford’s C-MAX Energi and the Fusion Energi) is designed for drivers who have a 21-mile commute or less, allowing those individuals to drive and never use gasoline. However, if a weekend trip arises, the car owner can still get up to 620 miles between the two power trains on one tank of fuel. Finally, the hybrid (Ford’s C-MAX Hybrid and the Fusion Hybrid) doesn’t plug in, but does optimize the engine and captures regenerative braking.

“The typical driver on a daily basis drives less than 40 miles per day, but people think they drive more because of the time they spend in their vehicles. So you really need to understand and look at how much do I actually need and how much do I really drive,” says Tinskey. “On our Fusion Energi and our C-MAX Energi we have a 21-mile all-electric range. We are finding that the data from those vehicles is showing about 60% of all the miles they are driving are all electric, zero gas.” Ford says interest in hybrid vehicles has gained steady momentum, with more than 37,000 sold in the first five months of 2013. In comparison, the company had sold more than 35,000 in all of 2010, while admittedly sales were not as brisk in 2011 and 2012 combined for hybrids. Looking at current growth in hybrids, that’s a whopping 375% increase compared to the year ago period.

Since 1997, Toyota Motor Corp. has sold more than five million hybrid vehicles worldwide. Despite Toyota’s dominance, the Ford C-MAX Hybrid is currently proving to be a very compelling alternative to the Prius. Even the Fusion Energi is beginning to take a bite out of the competition, and is in such demand right now that automotive dealers seem to be happy with the turn rate, as the hybrid version makes up almost 15% of Fusion sales.

The timing is right too, as the government is developing some strict initiatives aimed at encouraging auto manufacturers to improve emissions from cars. At the end of 2012, the U.S. EPA and the U.S. Dept. of Transportation established a standard that aims to improve the amount of CO2 (carbon dioxide) emitted from vehicles. Regulations require that by model year 2025, an average industry fleet needs to reach 163 grams/mile of CO2. This is the equivalent of 54.5 mpg (miles per gallon), if achieved solely through improvements in fuel efficiency.

In mid-June, the U.S. automaker released its 14th annual Sustainability Report adding that even though more changes are still on the horizon it has already cut CO2 emissions at its global facilities by 37% per vehicle between 2000 and 2012. It noted even more reductions are in store that will allow for an additional 30% drop in CO2 emissions per vehicles between 2010 and 2025 by addressing everything from new products and technologies to manufacturing processes.

These automotive regulations are sending some automakers scrambling for fuel efficiency, but Ford sees these regulations as the ground level, not the benchmark. Tinskey says the regulatory element will essentially just be a ‘floor,’ and rather Ford will continue to exceed those regulations through consumer pull. “So our view is (not to) offer a single technology and try to make it fit all customers. Rather let the customer choose the technology and then from a regulatory environment we will be just fine as we continue to progress the technology over time.”

In order to move the automotive industry forward though in this particular area of the market, electrification will need to be both a competitive and a collaborative arranagement. Tinskey explains, “We all have to work together and agree: What does that coupler look like; what does that receptacle look like; what are the communication protocols; where do we want to support the industry in terms of public infrastructure; what are those standards?”

Case in point: The next frontier in electrification is wireless charging. Imagine having a wireless charging station that only works with each manufacturer’s product.

“We are obviously very competitive with some of the other companies, but if we don’t work together, the industry just won’t make it,” explains Tinskey. “So we are really looking forward to that electrification collaboration.”

Connectivity to Cars
Ford’s vehicles are energy efficient, but they are also fun, something Tinskey reiterated more than once on the Tweet Chat with Connected World magazine and on The Peggy Smedley Show radio this past June in Santa Clara.

Now we know Ford Motor Co. is committed to the space. The interior is pleasing with more room for people and cargo, and of a higher quality than the hard-plastic styling of its leading competitor Toyota Prius.

From safety features such as lane departure warnings to infotainment and connectivity offered in SYNC, Ford is also looking to give its customers a safe and fun way to drive. Many automakers are taking different approaches to connectivity in cars. Ford’s philosophy and framework are built around the customer bringing a smartphone into the vehicle.

“We believe the customer has already made an investment in their smartphone and the connectivity that is associated with that smartphone. We bring that experience into the vehicle,” remarks Tinskey. “Now we augment that with both the in-dash and MyFord Touch, which brings other information about the vehicle out to the customer.”

Such information includes the latest status of charge and whether somebody has plugged or unplugged the vehicle, among other metrics and data. The car also has a navigation system, the ability to see where power is flowing from, and a coaching assistant, meaning the vehicle will tell consumers how fast they are driving, how fast they are accelerating, and how well they are regenerative braking. The car gives drivers all this feedback and informs them how they are managing energy.

Not all the features are solely aimed at vehicle efficiency. Some simply are designed for comfort and convenience. Consider the preconditioning feature—something Tinskey dubs as one of his favorite in his connected ride. Preconditioning will heat or cool the vehicle using the wall power, allowing the cabin to achieve the desired temperature regardless of what the weather is outside.

But that’s not all. Many parents appreciate the hybrid’s MyKey option, which gives drivers a keyfob that contains personalized settings. For instance, it limits the top speed to as much as 80 mph and it can be set to chime at 45, 55, and 65 mph to keep young drivers aware of their speed. The MyKey option can even be set to limit the radio volume.

These functionalities are just the beginning when it comes to the connectivity features Ford offers. The challenge now becomes educating consumers on how to use the technology, and which options are best for them. Tinskey explains that Ford prides itself on providing customer education as part of the sales process. Customers are taken through the basic levels of how to use the in-vehicle technology before they depart the dealer’s lot.

These types of connectivity features and service offerings will only improve, explains Tinskey, who envisions a day when connectivity in the vehicle will extend to other vehicles, the road, and even the home. He is referring to V2V (vehicle-to-vehicle) communication, which allows a car to communicate with another vehicle, and V2I (vehicle-to- infrastructure), which continues to evolve with sensors in the road.

V2G (vehicle-to-grid) could also experience significant growth, with utilities and automakers sharing power between the vehicles and the grid. “Those types of V2G, vehicle-to-grid, operations or features can only happen when you get critical mass of these products in certain areas of the country and the utility space. That is happening. We are starting to see the growth. Now we are starting to see the communication standards to enable the technologies,”says Tinskey.

With the amount of information available in vehicles today, consumers can expect cars to have even more connected capabilities in the future. Take the example of parking. Tinskey says throughout the lifespan of a car roughly 10% of vehicle fuel is wasted looking for parking spots. Ford is identifying how it can use sensors and information to improve this process, which will ultimately waste less energy.

The connectivity in the car will also inevitably spill over to the home in the future. One instance is controllable thermostats. When a connected car comes within in a certain range of the home, the vehicle will be able to do things such as turn on a thermostat and change the temperature. This is coming, according to Ford.

An Energi Lifestyle
Ford’s vision for the future of energy efficiency and connectivity extends far beyond the vehicle and into the home. Building on the automaker’s overall belief that it needs to be an ambassador of the environment and Henry Ford’s original desire to harness nature as an energy source and use zero-emission hydroelectric energy, the company continues to innovate and develop programs and partnerships to drive efficiency forward.

Many trends are converging today that encourage collaboration among automakers, appliance manufacturers, technology providers, and even homebuilders to enable consumers to improve their overall energy consumption byaugmenting their lifestyle.

One of the biggest shifts as of late is electric utilities across the United States switching to time-of-use rates. Previously, consumers would pay the same price for electricity no matter when they used it. Today, this model is changing with the advent of smart meters, which allow the customer to pay for electricity based on the time of day they use it. Typically electricity during the day tends to be more expensive. For EV drivers time-ofuse rates are actually a huge benefit because car owners can typically charge at night when rates are the lowest, meaning the overall cost of driving goes down.

Recognizing this trend, Ford developed a time-of-use database across the United States, which it calls value charging. That database can also enable savings in many other areas of the home, which is why Ford developed a program called MyEnergi Lifestyle and brought on partners such as Whirlpool, Eaton, Infineon, SunPower, and Nest to use that database to identify how to take advantage of the low cost night electricity. The MyEnergi Lifestyle includes electric vehicles, smart and connected appliances, efficient hot water heaters, learning thermostats, and rooftop solar systems.

“We are trying to find avenues of mainstream to get people to understand what their current energy is and how they can switch over to a more efficient lifestyle, not only on their vehicle side, which is what we sell, but also on the other pieces,” says Tinskey.

Here is what Ford did: It took a typical 10-year-old American home with 10-year-old appliances, and a 10-year-old conventional vehicle. Then it updated the scenario with an electrified driving product, all new appliances that can access the value-charging database, and added solar. Comparing the two homes, with help from Georgia Tech, Ford discovered consumers could save 60% a month on electric bills and 55% of carbon dioxide. What’s more, if everyone in the United States did something similar to MyEnergi Lifestyle, it is the equivalent to taking about 32 million homes off the grid—or the entire states of New York, California, and Texas.

Additionally, Ford teamed up with Los Angelesbased homebuilder KB Home in the hopes of appealing to environmentally conscious customers. The no-cost partnership is an effort to make energy efficiency a compelling proposition to would-be homeowners and drivers of hybrid and plug-in vehicles. Consumers can go into KB Home Zero-House 2.0 and purchase the MyEnergi Lifestyle components, which includes having solar and smart appliances installed as the home is being built.

The project culminated in a contest among consumers with a product giveaway to drive awareness to MyEnergi Lifestyle and prove the model is accurate. The MyEnergi Lifestyle proves energy efficiency is not just about the car, but rather a consumer’s lifestyle.

What comes next? Tinskey says the concept of mining for data and using analytics to understand how customers are using vehicles is big. This data is something Ford is leveraging to understand what future vehicles should be.

In the end, many of the big projects at Ford today are focused on energy efficiency, but will Ford also be looking at other elements of our life, such as health and overall well being in the future? If the MyEnergi Lifestyle is any indication, Ford may soon have its hands in more ventures than just the car. For a company built on innovation and conservation, Ford is proving it is much more than just an automobile manufacturer. Could it be the success of hybrid and plug-in hybrid vehicles is energizing the company, as well as the connectedcar industry in general? Surely, William Clay “Bill” Ford Jr., is making his great-grandfather very proud.

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June/July 2014
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