Ford Plans Sales of 20,000 Escape Hybrids in 2005

SEATTLE, July 15, 2004; Reuters reported that Ford Motor Co. plans to sell 20,000 of its new Escape Hybrid sport utility vehicles in 2005, though it will absorb much of the cost of adding the fuel-saving, battery-driven electric motor, the automaker said on Thursday.

The cost of adding the battery and other components driving the electric engine, which sits under the hood side-by-side with a standard gasoline engine, is between $5,000 and $7,000, far less than the $3,400 premium Ford is charging customers.

"It's not what you would call your bell-ringer investment," Ford Chief Operating Officer Jim Padilla told reporters at a product demonstration in Seattle.

The world's second largest automaker expects to have the Escape Hybrid in showrooms in September with estimated fuel consumption of 35 to 40 miles (56 to 64 km) per gallon, or 50 percent better than the standard Escape, a mid-sized SUV.

The base model 2005 Escape Hybrid, Ford's first hybrid vehicle, will list at $26,970, or $28,595 for the four-wheel drive model.

The hybrid qualifies for various state and federal incentives, including a "clean fuel vehicles" federal tax deduction of $1,500 for 2004, saving $500 for Americans in the top tax bracket, Ford says.

But that tax break is temporary and Ford officials are actively discussing additional incentives with state and federal officials.

"We're working on it," Padilla said. "We think the government can play a role here."

Anticipating rising demand for hybrid vehicles, Ford officials hope to boost annual Escape Hybrid production past 20,000, which is about 8 percent of the total Escape line.

"We are looking for ways to increase that," Padilla said, noting the primary constraint is the supply of the hybrid components.

Rising gas prices have boosted demand for hybrid vehicles in recent months and California's mandate for sharp reductions in greenhouse gas emissions from automobiles has helped spark plans for hybrids from several manufacturers.

Ford offers an eight-year or 100,000-mile (160,000 km) warranty on the Escape's electric engine and batteries, which draw a charge from the gas engine and from friction created during braking.

At low speed, hybrid vehicles run mostly on their batteries, giving many of them better fuel economy on city streets versus highways.

At some point the Escape's battery will need replacing, though Ford has not yet determined what that will cost.

"I don't think we've figured it out, yet, but it won't be cheap," Padilla said.