{"id":21379,"date":"2017-11-17T16:32:12","date_gmt":"2017-11-17T20:32:12","guid":{"rendered":"http:\/\/henrypayne.com\/?p=21379"},"modified":"2017-11-17T16:32:12","modified_gmt":"2017-11-17T20:32:12","slug":"supersize-suvs-fund-ev-self-driving-car-development","status":"publish","type":"post","link":"https:\/\/henrypayne.com\/index.php\/2017\/11\/supersize-suvs-fund-ev-self-driving-car-development","title":{"rendered":"Supersize SUVs fund EV, self-driving car development"},"content":{"rendered":"<p><div align=\"left\"><img decoding=\"async\" src=\"https:\/\/www.gannett-cdn.com\/-mm-\/7f222935527c62c13bae37265fb76b63f35a95fd\/c=200-0-3400-2400&amp;r=x404&amp;c=534x401\/local\/-\/media\/2017\/11\/12\/DetroitNews\/B99596342Z.1_20171112214247_000_G3E1NV3KI.1-0.jpg\" alt=\"2018-Chevrolet Suburban-006\" \/><\/p>\n<\/div><p class=\"speakable-p-1 p-text\"><em>Los Angeles<\/em>\u00a0\u2014 The death of giant, truck-based SUVs has been greatly exaggerated.<\/p>\n<div><\/div>\n<p class=\"p-text\">Ford Motor Co.\u2019s decision in 2003 to shelve its supersize 19-foot-long Ford Excursion SUV was seen as the end of an era. The world was running out of oil and hybrid vehicles were the future. The Sierra Club dubbed the Excursion the \u201cFord Valdez\u201d \u2014 a reference to the crippled Exxon oil tanker that blackened Alaska\u2019s coastline \u2014 while then-Ford CEO Bill Ford promised a shift to smaller, greener SUVs like the hybrid-electric Escape.<\/p>\n<div>\n<p class=\"p-text\">Fifteen years later and dinosaurs still roam the Earth. Indeed, they are thriving. In Los Angeles last week, Ford introduced an all-new, bigger-than-ever $49,000, 181\/2-foot-long Ford Expedition \u2014 a fraternal twin to the $72,000 Lincoln Navigator SUV that the automaker released earlier this fall. Jeep is getting into the full-size SUV space with its 2019 Grand Wagoneer.<\/p>\n<\/div>\n<p class=\"p-text\">Their introduction points out a duality for carmakers: On one hand, companies like Ford promote a narrative of the future with advanced EVs and robotic piloting. On the other hand, they are turning out ever-bigger SUVs. The reason is simple: Big SUVs are hugely profitable. And those profits finance development of advanced battery systems and robotic cars.<\/p>\n<div id=\"ad-position-189\" class=\"partner-placement partner-spike\" data-monetization-id=\"native-article_link\" data-monetization-sizes=\"fluid,3,3\">\n<div id=\"ad-slot-7103-mi-detroit-C1561-native-article_link-news-opinion-191\" class=\"ad-slot\">\n<div id=\"google_ads_iframe_7103\/mi-detroit-C1561\/native-article_link\/news\/opinion_0__container__\"><iframe id=\"google_ads_iframe_7103\/mi-detroit-C1561\/native-article_link\/news\/opinion_0\" title=\"3rd party ad content\" name=\"google_ads_iframe_7103\/mi-detroit-C1561\/native-article_link\/news\/opinion_0\" width=\"100%\" height=\"0\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\" data-mce-fragment=\"1\"><\/iframe><\/div>\n<\/div>\n<\/div>\n<p class=\"p-text\">\u201cBig, profitable SUVs really enable us to do the things we need to do,\u201d said Craig Patterson, marketing manager for Ford utility vehicles. \u201cThere are a lot of different ways to go with autonomous vehicles and electrified vehicles \u2014 and the future is uncertain. Having the foundation of profitable vehicles like F-150, Expedition and Navigator allows us to have the cash flow we need to invest in all these technologies.\u201d<\/p>\n<p class=\"p-text\">The Chevy Suburban innovated the enclosed pickup back in 1935, but the segment really hit its stride in the mid-1990s as SUVs squeezed out mid-size and large family sedans. Customers with growing families could climb the product ladder from, say, a compact Ford Escape to a mid-size Explorer to an Expedition.<\/p>\n<div class=\"partner-outstream\"><\/div>\n<p class=\"p-text\">GM expanded its truck offerings with GMC and Cadillac badges, while Japanese brands with full-size pickups \u2014 Toyota and Nissan \u2014 saw the opportunity with the Sequoia and Armada mega-utes. The vehicles gushed profits, and Detroit makers looked to expand the XL SUV trend with vehicles like the GMC Hummer and Ford Excursion.<\/p>\n<p class=\"p-text\">But they hit a wall in 2002 as terrorism and green protests grabbed headlines.\u00a0<a href=\"http:\/\/adage.com\/article\/news\/jesus-drive-video\/36341\/\">\u201cWhat would Jesus drive?\u201d<\/a>\u00a0ads aired on television.<\/p>\n<p class=\"p-text\">\u201cKids were coming home from school and saying: \u2018Mom, you\u2019re ruining the environment by driving this vehicle,\u2019 \u201d remembers Patterson. \u201cThere was a significant decline (in sales), but demand never went away.\u201d<\/p>\n<p class=\"p-text\">Neither did technological progress.<\/p>\n<p class=\"p-text\">\u201cThe industry has continued to innovate,\u201d said AutoPacific auto analyst Dave Sullivan, who is a former Ford product manager. \u201cThe highway fuel economy for a 6,000-pound vehicle is almost on par with what a midsize sedan was 12 years ago. People need to pack their SUV with hockey sticks and tow a camper. You can\u2019t do that with a Prius.\u201d<\/p>\n<p class=\"p-text\">While Ford got huzzahs from the Sierra Club for scaling back (\u201cWilliam Clay Ford will go down as the man who was smart enough to kill the Excursion before it became an Edsel,\u201d cheered Sierra Club executive director Carl Pope), GM continued its full line of profitable trucks. Combined sales of GM\u2019s Chevrolet Suburban and Tahoe, GMC Yukon and Cadillac Escalade last year totaled more than 250,000. Insiders say the $73,000 Cadillac Escalade alone is good for $35,000 profit for each one sold.<\/p>\n<p class=\"p-text\">On the other side of the Great Recession, a new generation of buyers has embraced them.<\/p>\n<p class=\"p-text\">\u201cNow SUVs are back in a big way,\u201d Ford\u2019s Patterson said. \u201cMillennials are now getting to the point where they are having children. They are following the same patterns their parents did \u2014 they are falling in love with SUVs.\u201d<\/p>\n<p class=\"p-text\">The all-new Excursion has some catching up to do with GM\u2019s perennial sales leaders \u2014 which are due for a remake of their own soon.<\/p>\n<p class=\"p-text\">\u201cThe money that they\u2019re making off these they are turning around and investing in whatever the future may be \u2014 ride-sharing, autonomous,\u201d Sullivan said. \u201cFord and GM are laser-focused on the future, and they are reinvesting those profits.\u201d<\/p>\n<p class=\"p-text\">But those profits may be in danger as green activists and governments like California \u2014 following the lead of France and the United Kingdom \u2014 target big SUVs again with threats of gas-engine bans over the next 20 years. Twenty years is the product cycle of the Excursion.<\/p>\n<p class=\"p-text\">\u201cThere is a clash coming between what the regulators are pushing for, and what consumers want,\u201d said IHS Markit auto analyst Stephanie Brinley. \u201cYou don\u2019t want to electrify these things, because you make them unprofitable. And that\u2019s a challenge.\u201d<\/p>\n<p class=\"p-text\">With lighter aluminum bodies, 8,700- to 9,300-pound towing capacities and a truckload of high-tech features, Ford isn\u2019t bashful about its new generation of big utes.<\/p>\n<p class=\"p-text\">\u201cAll of the (automakers) adapt to ever-changing requirements whether state or federal,\u201d Expedition Program Director Bill Hoevener said. \u201cYou look back 15 years and these things didn\u2019t have fuel efficiency. Now Expedition gets 24 miles per gallon on the highway.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Los Angeles\u00a0\u2014 The death of giant, truck-based SUVs has been greatly exaggerated. Ford Motor Co.\u2019s decision in 2003 to shelve its supersize 19-foot-long Ford Excursion SUV was seen as the end of an era. The world was running out of oil and hybrid vehicles were the future. The Sierra Club dubbed the Excursion the \u201cFord [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"_links":{"self":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/21379"}],"collection":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/comments?post=21379"}],"version-history":[{"count":1,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/21379\/revisions"}],"predecessor-version":[{"id":21380,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/21379\/revisions\/21380"}],"wp:attachment":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/media?parent=21379"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/categories?post=21379"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/tags?post=21379"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}