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How Ford Will Convince Customers to Pay More for Electric Vehicles

Ford Investor Day Electrification Slide

Here's what Ford's product chief, Raj Nair, said on Wednesday:

Trucks, commercial vehicles, sport-utilities, and performance vehicles are all parts of the market where Ford has a strong position, and where it currently generates big profit margins. Those are the segments where Ford will focus its electrification efforts, on the theory that those customers are most likely to buy into Ford's innovations -- and are most willing to pay for them.

In other words, rather than building an electric vehicle just to satisfy regulatory requirements (what Fields meant by "compliance mind-set"), Ford is planning to bring electric drivetrains to market in ways that will make customers feel they add significant value.

What might these products look like?

How might Ford incorporate electric drivetrains into its most gas-guzzling products in ways that will make its customers willing to pay extra?

Think about a plug-in hybrid Ford pickup that can summon its electric motors' immense torque to start a heavy load moving, or an SUV with an electric motor at each wheel that can adjust its traction on the fly in slippery conditions, or a plug-in hybrid Mustang that runs on electric batteries in normal driving -- but that instantly starts its powerful gasoline V8 when you floor it. Or a fleet of electric commercial delivery vans that operate quietly and don't ever need fuel, just a nightly recharge.

Clearly, there's a lot of potential for Ford to use electric and hybrid drivetrains in ways that add value to its most profitable products. In time, all Fords will be electric. Getting there will be a challenging and expensive journey. But it sounds like Ford has hit on a formula to give its customers some extra value, and its bottom line a little less pressure, along the way.

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John Rosevear owns shares of Ford. The Motley Fool owns shares of and recommends Ford. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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