Ford says hybrids beat electric for self-driving cars

Key Points
  • Ford prefers hybrid cars over electrics for autonomous driving.
  • The choice makes sense, as hybrids are subject to less downtime than cars that need to charge, say auto industry analysts.
Ford Argo
Handout: Ford

Hybrids make better self-driving cars than the electric cars some automakers are using, a top Ford executive said Monday.

Hybrid cars will be able to stay on the road for longer periods of time than electrics — Ford plans to have its cars on the road for 20 hours a day, said Jim Farley, Ford's executive vice president and president of global markets, told Automotive News.

Farley gave his comments days after publishing a post on Medium elaborating on Ford's plans for developing autonomous vehicles.

Using hybrids is a different strategy from the path some other companies are taking. Ford's U.S. rival General Motors has been using all-electric Chevrolet Bolt cars for its own autonomous testing.

And of course Tesla has been outfitting its own electric cars with all the hardware the company says is necessary for full autonomy since 2016.

Ford has been stepping up its efforts on new mobility businesses such as ride-sharing and autonomous driving technology. The company is battling a perception among investors that Ford is falling behind peers.

Ford's shares have risen just more than 3 percent so far in 2017, compared with nearly 20 percent for GM and more than 50 percent for Tesla.

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Ford's choice makes sense, said Dave Sullivan, an auto industry analyst with AutoPacific.

"The auto industry has been working on full battery electric vehicles for over 110 years now," Sullivan told CNBC. "We still have many of the same issues today as we did then in regard to range and charge time. Hybrids are much better suited to robotaxi and delivery duty because their downtime can be minimized."

Cold weather can also reduce battery range on electrics, which further reduces the amount of time the car can be on the road, but this is offset in hybrids by the gasoline engine, he said.

Ford plans to market autonomous vehicles not only for ride-sharing, but for other commercial driving applications, such as delivery vehicles. And commercial vehicles are likely to be especially sensitive to shorter ranges and long charging times, Sullivan said.

Finally, electric powertains are likely to remain more expensive than internal combustion engines for quite some time, and autonomous technology will be very expensive on top of that.

"Hybrids offer the best mix of uptime, efficiency, and cost," Sullivan said.

That may change if battery technology improves and charging times can be reduced.

"If/when batteries can fully recharge in the 3-5 minutes it takes to refuel with gas, then an all-EV fleet would be appealing," Kelly Blue Book analyst Rebecca Lindland told CNBC, "But that technology is not available yet."

But one of the reasons Ford is choosing hybrids is the fast-charging technology touted by companies such as Tesla degrades batteries more quickly, requiring more frequent replacements, Farley told Automotive News.

Ford recently said it is shifting production of an electric car to Mexico in order to free up space for self-driving cars at its plant in Flat Rock, Michigan. Ford plans to bring autonomous vehicles to a test market in 2018 and to the general market in 2021. GM plans to have a fleet of self-driving cars by 2019.

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