For more than a century, Ford Motor Co. has manufactured many millions of vehicles with names like Model T, Falcon, Fairlane, Thunderbird, Taurus, Fusion, and F-150. But ask anyone which brand stands apart from the rest, and you’ll get the same answer: Mustang.
Since its introduction at the 1964 New York World’s Fair, the sporty Mustang—affordable, powerful, as impractical (up to 760 horsepower!) as it is practical (it has a back seat!)—has developed into a pulse-quickening symbol of America’s particular obsession with the open road. Indeed, when the titular character in this year’s hit film Captain Marvel experiences a flashback to her younger days as a military pilot, she’s pictured outside the hangar beside her candy-apple-red, first-generation Ford Mustang.
But symbols don’t necessarily lead to sales, and the ’Stang—a two-door sports car in an age of four-door crossovers, a gasoline burner at the dawn of an electric age—has lately claimed more in the way of reputation than revenue. In the first nine months of 2019, Ford sold 55,365 Mustangs in the U.S., the model’s largest market. That’s down 10% from the same period last year, and about as many Mustangs sold in three quarters as Ford sells F‑Series trucks in three weeks.
Still, the Mustang remains the world’s bestselling sports coupe, and 10 million have sold since the first one rolled off the production line. So what do you do when the world isn’t terribly interested in buying sports coupes?
Enter the Mustang Mach-E, a gamble so great for the world’s sixth-largest automaker that the galloping horse on the vehicle’s grille is one of the few things in common with its predecessor. The Mustang’s slinky silhouette—long hood, short rear deck—has been altered to accommodate the bulbous curves of a four-door, albeit still rear-wheel-drive, utility vehicle. Its signature snarl, courtesy of the internal combustion engine, has been replaced by the subtle whine of a battery-powered electric motor. (Ford will add an artificial sound for the benefit of unwary pedestrians and U.S. regulators.) It’s expected to retail in the $40,000 range with a $7,500 federal rebate, a substantial premium over the $27,000 gasoline-powered base Mustang but competitive with electric-auto maker Tesla’s popular Model 3 sedan. Its range is approximately 300 miles, also on par with the Model 3.
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To Mustang fans around the globe, the Mach-E is an extraordinary, arguably heretical revision of what it means to be a Mustang. “I’m not 100% convinced badging this car a Mustang is a good idea,” says Sam Abuelsamid, a Navigant mobility analyst and former Ford engineer. “Calling it a Mustang has the potential of polluting the brand, and I’m not certain the audience will go for it.”
But to its maker, the Mustang Mach-E—aimed squarely at the heart of the automotive market in 2020—retains the spirit of the original: (almost) affordable, powerful, and a little bit practical and impractical. It is an electrified embrace of where Ford believes the world is headed and a daring move to reimagine its best-known brand in the face of industrywide sales declines that have left no automaker untouched.
Fortune: What does the Mustang brand mean to you?
Bill Ford: My favorite of all time. And I own a lot of them—between 10 and 15.
No one asked Ford to mess with the Mustang. The automaker could have brought to market a far more utilitarian electric vehicle, given it a name that wasn’t already part of Americana, and positioned it to signal zero-emission virtue in the tradition of EV models such as the Nissan Leaf, BMW i3, or Chevy Bolt. The problem: All three of those models have struggled with uninspiring sales.
“Tesla taught the industry that doing a ‘compliance’ car”—built mainly to satisfy stringent pollution and fuel efficiency standards—“is a disaster,” says John McElroy, host of the news and analysis website Autoline. “If you’re going to make an electric, it better look great, have good range between charges, and be desirable. Then you have a chance to make a profit.”
Despite the mindshare that Tesla enjoys, the number of EVs on American roads remains relatively small, representing 1 million of the approximately 275 million passenger-registered vehicles. But with manufacturers under regulatory pressure at home and abroad to limit carbon emissions, the number of EVs sold each year is growing, both in the U.S. and overseas. Ford expects EV sales to grow to 1.5 million a year in the U.S. by 2025, comprising more than 100 different models.
Still, consumers remain cautious. Surveys show a majority of the public believes that EVs are too slow, perform poorly in extreme weather, and take too long to charge—persistent concerns that Ford classifies as “myths.” When their own income is involved, even industry observers are skeptical. Henry Payne, an automotive critic at the Detroit News, says he had “no interest” in environmentally friendly cars—until he bought a Tesla Model 3.
“Tesla positions the battery and motors low, meaning a low center of gravity—just what you’re looking for in a sports car,” Payne says, adding that the car’s software-oriented experience also appeals: “Everything works through the touch screen, and the over-the-air updates to the car are unbelievable—just like your smartphone.”
Ford isn’t exactly new to electrification and its associated tradeoffs. The company’s first entry into the gas-electric hybrid category, which was pioneered by Toyota’s Prius, was the 2004 Escape SUV. The goal in those days was to save energy at a time when gasoline was considered costly, environmental activism was on the rise, and fossil fuels seemed to place Western foreign policy at the mercy of Arab oil producers. Most gas-electric hybrid models sold well; drivers liked that the technology felt like that of a conventional car.
Fortune: You’re Henry Ford’s great-grandson but also a longtime environmental advocate.
Ford: When I started at Ford in 1979, I was shocked at the lack of awareness among some people at the company. There was outright hostility to the discussion of environmental issues.
But battery electric vehicles—BEVs—are a far different proposition. The Mustang Mach-E will be Ford’s first to be built on an architecture designed specifically for a large lithium-ion battery and electric motors. (Ford previously rigged a small number of Focus sedans and Ranger pickups with batteries to develop the technology.) Much like the Model 3, the Mach-E’s battery—which weighs more than 1,200 pounds—sits wide, low, and long in the vehicle, establishing a low center of gravity and strengthening the car’s frame. Ford plans to use the same architecture for a Lincoln luxury model and other future EVs.
If Mustang fans are doubtful that an electric powertrain could adequately carry on the brand’s traditions, consider a key property of electric motors: instant, all-encompassing torque. Unlike gasoline engines, which have a “torque curve” requiring some runway to peak, electric motors immediately offer all the accelerating force they have to give—a characteristic that might appeal to any Mustang fan concerned about the Mach-E’s sprinting abilities.
“This Mustang will excite consumers,” says Ted Cannis, Ford’s global head of electrification. “It will beat a Porsche Macan”—the German automaker’s compact sport utility model—“off the line’’ thanks to a zero-to-60 mph time of about six seconds. (A future GT version with a second motor will manage the feat in 4.5 seconds.)
On top of that is a serious upgrade to the vehicle’s electronic architecture. The Mustang Mach-E will be Ford’s first production vehicle to employ high-speed data connectivity, making possible a large, data-driven dashboard display and over-the-air software updates—just like Tesla’s.
Cannis candidly acknowledges that his team drew heavily from Tesla’s playbook, inside and out. But an open question remains: Can Ford stoke the same level of enthusiasm for the Mustang Mach-E that Tesla elicited with its Model 3 and its 500,000 advance reservations?
Fortune: And now the Mustang Mach-E.
Ford: I was against it initially. As we dug deeper, it didn’t seem like such a crazy idea. I told them: The performance numbers have to stand on their own. They were good, we weren’t giving up a lot of range, and the styling was compelling. That won me over.
Ford needs the Mustang Mach-E to succeed, if nothing more than to prove that its latest strategy works at a time when automakers worldwide are under duress. How bad, you ask? Global automotive sales declined last year for the first time since 2009, and forecasts predict substantial declines every year through 2021. The term “peak car” has been uttered.
A cloud of uncertainty already hangs over Dearborn. Ford shares have fallen 30% in the past year, to about $9, amid mediocre profitability. Moody’s, the credit ratings agency, downgraded the company’s creditworthiness to junk status. Meanwhile, analysts have expressed reservations about Ford’s latest restructuring as well as its plan to improve profitability, quarterbacked by CEO Jim Hackett.
Hackett, the former CEO of office-furniture maker Steelcase, earlier had served as Ford’s head of driverless vehicle technology and future mobility business development. Upon succeeding Mark Fields in May 2017, Hackett ordered a consolidation of electrification efforts, which had been distributed across various departments. Speed wasn’t his only concern. Ford brass fretted that the company’s EV development was progressing toward a mundane model, leading executive vice president Jim Farley to scrap an unnamed crossover slated to be Ford’s first electric vehicle. Approaching Ford’s entry into the all-electric category with a member of the Mustang family increasingly looked like an attractive option.
So the automaker quickly recalibrated. In fall 2017, Ford transferred more than a thousand employees working on electrification to “Team Edison,” a nod to the storied inventor and close friend of Henry Ford’s. Cannis, a 30-year company veteran, was named its leader. Months later, Bill Ford, the automaker’s executive chairman, unveiled a five-year, $11 billion electrification program that is expected to fund 20 new EV models and the build-out of a battery-charging network in the U.S.—reassurance, perhaps, for drivers concerned about charging an electric car.
Today Ford is halfway to its 2022 finish line. In the meantime, it’s happily accepting $500 deposits on the Mustang Mach-E with plans to begin rolling them off its assembly line in Cuautitlán, Mexico, next year. Will Ford’s wager on a reimagined Mustang pay off? And what of the company? Whatever the answer, it’s clear that the stakes couldn’t be higher.
A version of this article appears in the November 2019 issue of Fortune with the headline “Electric Horseman.”
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