Ford looks set to abandon its petrol-powered Escape and Puma SUVs – and it might be the best decision the Blue Oval could make.
Ford CEO Jim Farley dropped a bombshell in a recent earnings call that attracted only modest reporting, confirming that the company is quitting internal combustion crossovers and two-row SUVs to focus on its larger vehicles like the F-150 and Ranger as well as electric alternatives.
When asked about the company’s profit margin, Farley said one of the key reasons for his optimism is a decision to get out of markets that don’t suit the brand, and while the didn’t specify nameplates, those markets include models like the Escape and Bronco Sport.
“So I’m very optimistic about our eight percent because we are not going to be playing in the two-row commodity crossover market because that’s – because Ford’s tried that in the ICE [internal combustion engine] business and it didn’t really work out for us,” Farley told the call. “We want to play our hand, our strength, commercial, truck, larger vehicles on the category side.”
What this ultimately means is that SUVs like the Escape look set to be cut, and the focus will be put on pick-ups and larger SUVs like the Explorer in the USA and the Everest here in Australia. This news isn’t a complete shock though, with Ford of Europe confirming in early 2022 that it will have four electric SUVs on sale by the end of 2024.
This new quartet will include an electric version of the Puma compact crossover and the Mustang Mach-E, plus what Ford has called a ‘Medium-size Crossover’ and a ‘Sport Crossover’ in its imagery. This all-but-confirms that the Escape nameplate will be dropped as Ford tries to forge a new future as an electric brand.
While these two announcements have been centred on the US and European markets, the impact for Australia is obvious – the Puma and Escape will almost certainly be dropped in the near-future.
The Puma and Escape have been modest sales performers for Ford Australia, selling just 2408 and 2179 respectively in 2022, so losing both won’t impact the brand’s chances in Australia in the same way losing the Ranger and Everest would.
In fact, switching to an electric-only SUV range, particularly one featuring the evocative Mustang nameplate, could be just what Ford needs to turn around its SUV fortunes in Australia. Frankly, it could hardly do much worse.
The Puma and Escape typically are amongst the worst sales performers in their segment, certainly for a mainstream brand like Ford. The Escape’s 2179 sales pales into insignificance next to the more than 34,000 RAV4s Toyota sold in the same period.
While there’s no certainty when, or even if, Ford Australia will get all four of the European electric SUVs, even getting two plus the Mustang Mach-E could be a boost for the brand. Obviously Ford has been one of the slower brands to make the EV switch, with the first battery-only model – the E-Transit – not arriving until later in 2023, but it has the opportunity to play catch-up.
Assuming all four are on sale in Europe by 2024 as originally planned, Ford should be able to start adding them by the end of next year or 2025 at the latest (of course, we’re still waiting for the Mach-E which was revealed way back in 2019, so there are no guarantees with Ford Australia’s timing).
Taking a best-case scenario that Ford Australia can secure all four of these new electric SUVs by, say, the end of 2026, that could put them in an ideal position to take advantage of the increasing interest in electric vehicles in Australia. With the Tesla Model Y, Hyundai Ioniq 5 and Kia EV6 already on sale in the electric SUV space, the Toyota bZ4X, Subaru Solterra and others are coming to get in on the party.
Given Ford only sold less than 4600 examples of the Puma and Escape in 2022, splitting that across four models means they’d only need to sell between 1100 and 1200 of each to be ahead of their current position. And the potential for something as evocative as the Mustang Mach-E is obviously greater than those numbers (assuming Ford gets the price right locally).
The reality is Ford has little to lose and a lot to gain by becoming one of the first mainstream brands to make a majority switch to electric SUVs, but the timing will be key. Ford simply cannot compete against Toyota and Mazda in the current ICE market, so it should take a risk and switch to an electric future as quickly as possible to try and reposition itself as a market leader once again.
Keyword: Ford quitting petrol-powered SUVs: But going all-electric for next-generation Puma, Escape and others is the right move to take on Toyota, Mazda and Tesla | Opinion