Inside Ford’s Strategy to Lead America’s Shift to Electric Vehicles
Episode ID S2E03
March 30, 2022
Recorded in the CoBank booth at the NRECA PowerXchange and TechAdvantage meetings, in this episode of Power Plays CoBank’s Teri Viswanath talks with Dave Hurst, energy services manager with Ford Motor Company. He reveals what the company has learned as it embraces the EV market. Plus, Dr. Gil Tal, director of the Electric Vehicle Research Center at UC Davis, unpacks the factors ahead for EV adoption – including manufacturers’ role to make or break the market.
Teri Viswanath: Welcome to Power Plays, a CoBank Knowledge Exchange podcast series, an audio program where we connect you with top energy and environmental innovators and policymakers who share their insights, experience, and market observations. Hello, I'm Teri Viswanath, your host and lead economist for power, and energy, and water at CoBank. I'm joined today by co-host and CoBank managing director, Tamra Reynolds. Hi, Tamra.
Tamra Reynolds: Hello, Teri. At the NRECA Tech Advantage conference that took place in Nashville earlier this month, we wanted to continue the conversation on rural adoption of electric vehicles. With this in mind, we spoke with two experts on the topic, Dave Hurst, the energy service manager with Ford Motor Company, and Dr. Gil Tal, the director for the Electric Vehicle Research Center at UC Davis.
Teri: We actually recorded these interviews in our booth at the NRECA Annual Conference. It was really something. There were more than 8,000 electric co-op staff from across the nation that gathered in Nashville. Because last year's event was held virtually, it was the first time I participated in this in-person gathering. It was also the first time that our guest from Ford Motor Company, Dave Hurst, attended. It was really impressive.
The engagement with our co-op community was terrific. In fact, Dave took the opportunity to really listen to what our co-ops had to say about electric vehicle charging and heard their unabashed admiration for Ford vehicles. The Ford F-150 has been an important workhorse for rural communities and he gets this. Here's my conversation with Dave.
Okay, I want welcome Dave Hurst to who is the manager of energy services with Ford Motor Company.
Dave Hurst: Well, thank you very much. It's a great pleasure to be here.
Teri: We had a great conversation this morning with a lot of the cooperative executives, and managers, and directors. We've got about 8,000 people at the show right now, and so really glad to have you talk a little bit about Ford Motor Company, about your role, about the engagement with the co-ops. I think, first and foremost, why electric vehicles and why the commitment that Ford's made to electric vehicles?
Dave: Ford realized early on that the approach to electric vehicles and the appeal of electric vehicles really meant a change in strategy. Ford looked at where the opportunity lies, and it was really in our strength in pickups, performance vehicles, vans those vehicle that Ford does well in ICE vehicles. There was a recognition that they would do really well in EVs as well. There was a big shift within Ford to play into that and really lean on, particularly our iconic nameplates--the F-150, the Mustang, Trans AM.
Teri: Also a big announcement of course, Tennessee is our host state this year, really excited to be in Tennessee. You guys made a very big commitment for your manufacturing site, Blue Oval City, that came out in November.
Dave: In terms of the Blue Oval City, which is our manufacturing, that's really about being able to deliver on this promise around EVs with complete assembly. Then, the F-150 is, what can you say? It's such an iconic vehicle to begin with and then to do it electrified, we've got a number of new key features that have never been introduced before. The pro power onboard that we can supply off of the battery pack. It's zero emissions, it'll take almost 10 kilowatts off the vehicle. We've got the mega power frunk up front, which is the biggest front trunk, frunk. It's got power in there as well. Then the one that's been particularly of interest at this event is the intelligent backup power.
Teri: I think our vehicles, especially in rural communities, are working vehicles, let's be clear. Having a mobile source of electricity out in the field where we need it is very exciting and to have that resource at home. You mentioned some of the statistics around a backup source of-- it's a backup source of power for us.
Dave: Ford is known as a work truck. We have definitely leaned into that image. Our truck is designed to put power on a work site. It's designed to deliver power to a home in the case that the home needs the power. With the extended range electric F-150 Lightning, the battery is big enough. We can supply home to a typical house for three days. If they're doing energy rationing it could be up to 10 days.
Teri: That could be meaningful. As of last year, the average American had eight hours they were in the dark, that they didn't have access to power. Now, I think one of the questions we were asked on the panel, we heard a lot about, is making sure there's that outreach with cooperatives, so I think an important part, your role in particular as a manager of Energy Services for Ford Motor Company, is to be able to do that outreach.
Dave: In order to be able to do the intelligent backup power you need an 80-amp Charge Station Pro from Ford and that 80 amp, if you think about that, that needs 100 amps of service. In a lot of homes, that's going to need a whole new service to the home to be able to support that. You get two or three of those in the neighborhood, and you're talking quite a bit of power that's required that's new. We understand that utilities need that engagement to know when these vehicles are coming up. The last thing the utility wants is to be surprised with all of a sudden, this huge new load just pops up.
We understand that. I think the challenge is trying to make sure that we're communicating that to the right people at the right time. Within Ford Motor Company, there's a team of us that are doing it. There's thousands of direct utilities, and co-ops, and things, and just trying to manage that is challenging. I think we recognize the need and we would use events like this and others to try and help figure out the right path for that.
I think there's a couple of others that I want to make sure we mention there, is around installers and then around the dealers as well. These are the folks that are boots on the ground in the communities making sure that there's the connection there as well. We haven't even talked about our Ford Pro which is for our commercial and government fleet programs.
Teri: The fleet, that's right, yes. Which is really fun because you wear two hats. We've to be clear that it's the grid integration for Ford, but you also have charging, that's also part of your oversight, right?
Dave: Yes, so I spend a lot of my time working on public charging issues and we definitely recognize that rural communities, there's a need for public charging there as well.
Teri: Right, we often consider ourselves the desert when it comes to public charging, and something that we have to resolve and figure out.
Dave: Yes. One of the ways we can support all this extra load is through managed charging from utilities. Ford is part of a multiple OEM consortium working on a platform called the Open Vehicle Grid Integration platform. This platform is really that one-stop-shop for utilities to be able to connect to one platform to be able to impact multiple OEMs charging. That's an important piece that, from the OEM side, it's the same thing. There's a lot of you guys and we want to be able to have one connection point, not have to have individual integrations with each of the utilities.
This platform is designed to solve that problem and then open up a lot of these use cases that we hear all the time, that utilities need. Things like demand response, aggregation, other ancillary services, support renewables on the grid. All of that and that's what that platform is designed for.
Teri: Is meant to do, exactly. Now, I think it was interesting because you had opened up the questions to the audience. You had said, "Listen, I need to understand how you see the use cases for our vehicles. We need to understand how the communication is, because other than please reach out to your utility co-op or muni, you want to understand what the engagement should look like, right?" That was an important part and you had a number of follow-up questions at the booth.
Dave: Certainly did. It's tough for us because as we're communicating with customers we can say, make sure you talk to your utility. The customer we can't tell them exactly to do that or what they're supposed to be asking their utility. Are they going to call the 800 number at the back of the bill and talk to whoever happens to answer the phone and say, "Hey, I bought an EV," and hope something happens? Probably most of them won't do that unless there's money involved. Are they getting some incentive or something like that?
Because this is different across utilities, we really need to better understand what do you guys need from that engagement and how best can we support that happening?
That's why I think as we talk about some of the boots on the ground, is it more appropriate for dealers to do that, is it more appropriate for installers to do that, or the customer? I don't have any answers to that. I'm just going to pose the question.
There's a lot of different things that we're working on in terms of that engagement. I think first is just how do we accelerate the engagement with utilities to make sure that we're communicating with you guys. I think that's a big piece of it. We've got an outstanding press team that's working on how do we reach out to customers in unique ways and capture some of the-- particularly with the F-150. There's a lot more different lifestyles and things like that, that we're starting to see come through. It's not just work trucks, it's not just sporty things, there's folks that have a variety of different things they do with their vehicle, and so how do we reach out to those folks and really engage with them? There's a whole other team besides me that's actually working on that piece of it.
Teri: Super fun. I just think ending on a fun note, which is the vehicle experience itself, driving these cars. I think the Mustang in particular, we have one of our CoBank employees that is amateur race car driver, and he said he was behind the wheel of a Mustang and he was surprised about the acceleration. We forget, the reason we buy vehicles is not to just get from point A to point B, but it's because we love our vehicles, we're passionate about them. He said this, as a race car driver, there was a lot of pickup in the Mustang. I think you said the same thing, yes?
Dave: Exactly. There was some somebody I was talking to, was telling me about their utility has a program where they allow the employees to take the vehicle home for the weekend and use it for the weekend, and that is really as soon as you get the butt in the seat and get them to experience in their own life kind of what it's like, that does the sale for us sometimes.
Teri: It does. Our member drive programs are very popular with our co-ops. Well, I want to thank you so much, Dave, for being present with our co-ops, being here in Nashville with us, and we're hoping that Ford comes back next year.
Dave: Well, thank you. I appreciate the opportunity.
Tamra: Teri, Dave says that car manufacturers are keen to collaborate with electric co-ops as Americans shift to a future of electric vehicles, but he readily acknowledges the current struggle. Beyond telling Ford customers to simply make a call to your utility, it's far from clear on how a smooth handoff should actually take place. As he says, are EV buyers supposed to call the 1-800 number on the back of their bill and talk to whoever answers the phone and say, "Hey, I bought an EV," and hope something happens?
Teri: That's right, but I take it as a really hopeful sign that so many of our co-ops came up after our morning breakout session to speak with Dave and offer advice. Engaging this sort of dialogue will help smooth the road ahead, and what exactly will the future look like for electric vehicles? During that NRECA breakout, I referenced really compelling research that UC Davis had recently published on adoption trends, and way in the back of the room, and it was crowded that morning and more than a little loud, was the author of the work I referenced Dr. Gil Tal.
Gil spoke up in that session and I asked him to join us at the booth later in the day and discuss the trend toward evolving electric mobility, and what it means for our home refueling stations. Here's that conversation with Gil.
I'm joined by Dr. Gil Tal from UC Davis, he's the director of the Electric Vehicle Research Center out of UC Davis. Really glad you could join us.
Gil: Great. Glad to be here.
Teri: In 2020, we only had a little over 2% of all new vehicle sales that were electric. The real question that comes up is, how many vehicles are we going to see on the road that are electric, and from a co-op perspective, we're going have to charge those, so I need to know kind of the run rate and what its going to look like? I'd love to hear your thoughts on this.
Gil: I believe that about a third of the new cars that will be sold in the US in 2030 will be electric, one out of three, let's say.
Teri: Okay, one out of three cars.
Gil: But and there is a big one, half of them will go to California.
Teri: What's driving that? Is it the state incentives? Is the mindset of consumers, or what's driving the shift toward electric vehicles?
Gil: It's all of the above, the first thing that drives it is that California had a ZEV mandate, zero-emission vehicle mandate, that forced the car company to sell X percent of the cars as electric, that's what actually started Tesla. Then when you see them on the road, people like them, and when they see their neighbors drive them, they feel that it's something normal to do, and they all buy them for many different reasons. It's electric, it's autonomous, it's the future, it's had big screens and all of these things.
Teri: But it's interesting, a lot of the band on internal combustion engines is sort of on the future, and maybe that's important to know. We have a big billboard that California is not going to allow the sale of internal combustion engines, and maybe that's signaling but they're not the only state as I understand. There's more than a dozen states that have adopted the same sort of practice, which is we're not going to be able to actually buy an internal combustion engine in a number of U.S. states.
Gil: At 2035, California and many other states saying that they're going to ban gasoline cars. Europe is doing just the same. Norway is already there. China is already doing similar things. To be honest, I don't really believe them, but 100% is a good number. As a politician, you cannot say 84.3% will be electric and that's good enough. You say 100, but the idea is same idea.
Teri: I think that's a really good point, but I think we were able to speak to Dave Hurst, who is the manager of Energy Services for Ford Motor Company and when we take a look at this, the states are talking about bans, and what we're seeing is that the manufacturers are actually more excited because they're seeing the consumers adopt the technology.
Gil: Yes, but the manufacturers are the one that take the big risk. The car companies are the one that will make it or break it. Some of them will not survive this transition and they are losing sleep on when to jump in, when to jump to the deep end, or to wait a little bit longer. Some of them are already there. Some of them are waiting. It's a huge, huge, huge risk for them and if they will be able to wake up in the morning and it's all gone, they will be happy. They know how to make cars without it. It's there, it's happening, but it's not going to happen without the government support, without the continuous push.
Teri: I think that's an interesting point, but certainly, if we think about Wall Street and where the money is flowing and if we take a look at Tesla, that's a good example in terms of big bets where the future lies and where consumers are going to run to. This is maybe sending a signal, right?
Gil: Absolutely. When you go to Wall Street, they all like to talk about disruptive technologies and Tesla if you are, let's pick BMW, for example, you are already losing market. You already see a big risk. You need to move fast because Tesla is eating into your revenue. If you are Ford, you're a little bit behind and if you are on a gas station or utility, you have 20 years of margin before your business is going to change, so you can plan for it.
Teri: There's an urban driver, there's a suburban driver and there's a rural driver. Of these three, we know that our rural drivers are going to drive the most.
Gil: Your rural drivers also drive much more and we always said, the limiting factor is time. There's 24 hours a day, we need to work 8, to sleep 8. We cannot drive more than three, four hours a day. That's just within the range of the modern electric cars because we are not expecting any commuters to do more than 200 miles a day.
Teri: I think that's a relatively important, especially last week, our price at the pump was $3.65 this week, it's $4.06, it likely to be a remain elevated. We think about the e-gallon equivalent, that's quite a bit of savings. At an average cost of $1.16, $1.15 based on $0.12 per kilowatt, this is a--
Gil: Very simple. You drive about three miles per kilowatt hour, and if you a drive an electric car today in most places in the US, you pay better than driving a Prius or any of these most efficient cars. In the future it's going to be even better. We like to talk about TCO, total cost of ownership. You pay more for the car, and you save on every mile you are driving. When you buy an electric car today, a small one, a Chevy Bolt or a Kia, you already, and you drive it, let's say, if you have an 80-mile commute, you already save today. As is, it's a great choice.
Teri: The amount of that savings, I think, is eye-opening. On average, we're looking over a 15-year life of the vehicle and looking at a roughly an $8,000 savings. Anywhere from $4,000 to $13,000. We're looking at a relatively significant savings and if the price tag is lower competitive, so the average cost of a U.S. vehicle last year was $40,000. That is we're looking at that in terms of looking at the tax incentive, we're looking at cars that have to price under that level already. Right off the dealership lot, we're saving money.
Gil: You're not only saving on driving. I'm driving electric car for 12 years now, you need to change the air cabin filter because you don't have an engine filter and you need to change the wiper blades. That's it. That's the only maintenance you have.
Teri: That's a really good point. That brings us to an interesting conversation. If I'm not going to have to pay a lot of money out in servicing and maintaining this vehicle, do the dealerships have the same incentive to sell me an electric vehicle?
Gil: I'm really worried about the dealers. We have a problem with dealers in the U.S., trusting the dealers, and it's not about electric cars, but dealers have a problem. It's a tough business and they believe that if you come into a dealership, they have one chance to sell you a car, an electric car is a much more complicated story. You start asking, "Will I get the federal incentive, the credit?" Then you start asking them, "How will I charge it? Do I need to upgrade my home panel?" Dealer's, "Okay? You see down there, that's the gas one. Let's go there and--"
Teri: Makes it easier.
Gil: Any of these questions scares the dealers because they're afraid that you will leave without closing a deal. The car companies spend a lot of money on trying to fix it. Tesla had a really nice way to fix it. They just cut the middleman. They sell the car directly. Other car companies thinking about EV dealership only. They will only sell EVs. It's not going to be an easy fix.
Teri: I think a lot of our cooperatives have had to do an outreach program. The dealerships within their community, they've got to make sure that they know how to sell an electric vehicle.
Gil: It was a very slow process to find the right people to train, and to stay a little bit longer, but you're absolutely right. The education process is something that happens in the community.
Teri: Now I want to go back to our original question, which is how many electric vehicles are going to be on the road, and our co-ops have-- a lot of our co-ops have a loaner car, an electric vehicle, so their members get to understand what it's like to drive an electric vehicle. How important are those membership programs you think?
Gil: Butts in seats, that's the way to do it. If you have a loaner, give people the car. It takes 20 seconds to understand how fun to drive it, to accelerate. Then it's take you two or three days to understand that the range is enough and you're not going to get the struggle. Then it takes another two or three days, up to a week, to learn how to charge it. Oh, I don't even need to charge it every day. I can use the timer. It's a process. It's a process that a friend can teach you if you already have one, or let people drive, and try, and that's why the drives are great, and actually experience it.
Teri: Let's talk about wearing your hat as director of the Electric Vehicle Center would love to hear a little bit about what UC Davis is doing with our co-ops.
Gil: Great. What we are trying to do is, help forecasting how many electric cars you will have, how many of them will be used for commute. Then from there, derive how much electricity, how many chargers and so on in different years.
Teri: We can get at least a crystal ball on where the future might lie and what our expectations are going to be around charging.
Gil: Exactly. Then we don't need to go and build all these chargers today, but if we already doing some upgrade, we can, with very little cost, put the conduit in, make ready, and get ready for it when it's coming.
Teri: When we think about these numbers, 160,000 gas stations in the country, and the administration's talking about a half-million are required in order to support electric mobility. Quite a bit. When we think about how many are required, are we really thinking about this problem from an internal combustion engine lens, and is it the right lens to look through?
Gil: Probably not. We all have a gas station at home. Most of us, as we said. If you have a dryer plug, if you have any 240 volts in your garage, that's it. You don't need anything more than that. You go, you plug in your charger and in the morning you are full. If you are not full in the morning, we will have some fast chargers around that will help you to top off when you need.
Most of the charging will happen overnight, at home, or while you're at home. Then we will have, during the day, while you're at work, and the push for day charging or night charging depends on when do we want people to charge, based on how much we pay for this electricity, what the source of the electricity. Sometimes, we like them to do it during the day, we'll put more workplace chargers. We don't want them to do it during the day, we'll put less workplace charges. That's the trick. It's totally not the gas station model, the gas station model will be the most expensive way to go for electric vehicles.
Teri: Public and work, if we want to get that charge done during the day and more support in the garage at night, that's great. Dr. Tal, I really appreciate your time. I'm really looking forward to more work coming out of UC Davis. It's been a pleasure.
Gil: Great question. Thank you very much.
Tamra: That was a terrific overview. Gil and the research staff at UC Davis are doing incredible work with the co-ops. He mentions the push for day charging or night charging will really boil down to when people want to charge. That will be based on how much we pay for the electricity and what the source of generating that electricity is. If we need more day charging, then we need to plan for greater workplace charging opportunities. If the ideal time is at night, well, the rates really need to incent that sort of charging behavior.
Teri: As member adoption picks up, co-ops need to determine just how much power supply will be required to charge a growing fleet of EVs, and, most importantly, where and when that charge will occur. Studies measuring the impact of mass EV deployment on the bulk U.S. electric power system demonstrate that recent trends in investment ensure the country's generation portfolio will be up to speed, yet the real challenge will the point of charge or the distribution system, as our recent Knowledge Exchange work emphasizes.
Tamra: I hope that our audience found this discussion helpful. For our next podcast, we are going to dive deeper into power supply and distribution planning for EV adoption. This was a great conversation that took place in the NRECA Learning Center at Tech Advantage, featuring Brian Sloboda with NRECA, Peter Muhoro with Rappahannock Electric Cooperative, and Scott Hammond with Central Electric Power Cooperative.
Teri: That was a great group. I couldn't have gathered a better crowd for that discussion. I hope you will listen in next month. Goodbye for now.
Disclaimer: The information provided in this podcast is not intended to be investment, tax, or legal advice and should not be relied upon by listeners for such purposes. The information contained in this podcast has been compiled from what CoBank regards as reliable sources. However, CoBank does not make any representation or warranty regarding the content, and disclaims any responsibility for the information, materials, third-party opinions, and data included in this podcast. In no event will CoBank be liable for any decision made or actions taken by any person or persons relying on the information contained in this podcast.