Ford's new CEO says the E-Transit cargo van's measly 126-mile range is just right for its target consumer: fleet buyers who don't care about road trips

  • The newly-announced Ford E-Transit van offers just 126 miles of range.
  • That's a lot less than many EVs, which can serve up over 300 miles of range.
  • But as far as Ford's new CEO is concerned, this configuration is just right for the target audience.
  • "Consumers over-buy their battery," Jim Farley told Business Insider. "But the commercial electric customers don't buy any more vehicle [capability] than they need."
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With a storied history and beloved nameplates like the Mustang and F-150, Ford is among the best-known automakers on the planet. But for all that, it holds less than a 15% share in the ultra-competitive American passenger market. 

The Ford Transit van may not be nearly so widely regarded, but it's a legend among customers who use it as a delivery workhorse or as a rolling workshop. And it's the main reason Ford has 50% of the commercial vehicle market in the US.

Which is why inside Ford, the Transit is a major preoccupation, especially for the 117-year-old automaker's new CEO, Jim Farley, who took over in October and just unveiled the all-electric version of the van, the E-Transit.

Farley, the company's fourth chief executive since the financial crisis, intends to lean into that commercial dominance. In particular, he wants to leverage a forthcoming, all-electric version of the van, the E-Transit, to bolster a date-driven services business. In his thinking, Ford can realize a much higher profit margin on connectivity than it has on vehicle sales, where even 10% has been an elusive target.

But for such a vital vehicle, the E-Transit has an awfully limited range: just 126 miles. The advent of bigger, more efficient batteries has, at last, made EVs competitive with internal-combustion-engine cars and trucks. Tesla sells vehicles that can cover well over 300 miles on a single charge. Ford's Mustang Mach-E, which started production this fall, hits that mark, and a much-anticipated electric F-Series pickup, slated for a 2022 launch, should also be a member of the 300-mile club.

But Farley's not sweating the miles, because he knows that van buyers, many of whom operate fleets of vehicles, are different from everyday drivers.

"Consumers over-buy their battery," he told Business Insider. They think about that epic road trip they'd love to take when they go to the dealership, not the 10-mile commute they actually make every day. "But the commercial electric customers don't buy any more vehicle [capability] than they need."

Price, range, and utility in one all-electric package

For the fleet buyers most likely to order the E-Transit, that means a van that's priced under $45,000, offering a 67-kilowatt-hour battery and 126 miles of range.

"They have a totally different way of looking at range," Farley said, adding that a big selling point for the E-Transit is that the battery is "just right."

A commercial owner wants to hit a sweet-spot for price, utility, and usage. So the roughly 130 miles of range for the E-Transit was developed by Ford by crunching 30 million miles worth of data gathered from users of the gas-powered Transit.

"This makes E-Transit ideal for commercial customers who know their drive routes and often work in urban environments," Ted Cannis, Ford's North America commercial business head, said in a statement.

"Affordability is key, and our customers buy only what they need to get the job done. E-Transit provides ample range at a price that makes the transition to electric easy. And Ford is just getting started."

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