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I think it’s both adoption and cost, this particular conference is spot-on in how you address battery costs, which is a key Component but there is a whole other set of costs that we need to work on to make hybrids mainstream. A key factor to address cost is to get to volume production/scale. You might also get to scale by reusing components, either across the industry by using similar components or across nameplates. At Ford, we leverage our global platforms and create electrified products on those products as the region adopts.
This helps in three ways:
- it allows us to leverage the scale of the global platform,
- it allows us to produce the vehicle on the same production line as the petrol/diesel products, and
- it allows us to offer electrification in regions of the globe as they are ready.
we can viably offer hybrids at a price point to become mainstream.
Is that the same for the European market then?
The difference in Europe is that you have high efficiency diesel offerings that are well accepted - so the dynamics are very different. In the US, diesel requires more expensive after-treatment, which makes hybrid diesel in the US is less popular. Although in Europe we are seeing diesel emission regulations getting tighter, so we may start to see that same dynamic as the US, and we might see hybrids become offered even at a higher rate. The other interesting factor with Europe is that the cost differential between petrol prices and electricity prices is higher – providing a better customer value equation for plug-in products in Europe than in most regions of the world.
What needs to be done to ensure that battery technology development is cost-effective and is sufficient for hybrid requirements?
I think it goes back to the cost. Between 2009 and 2011, we saw a 40% decrease in battery prices and battery costs. While the trend might not be as steep going forward, there is a group, USABC, who predict that by 2020 we could get down to less than $300 kWh at scale. If we can start hitting those price points, we do think that will be one of the key enablers for not just traditional hybrids, but then plug-in hybrids as you get into larger batteries.
Read the rest of the interview here