7 Risky Vehicles Automakers Gambled On
There’s a big difference between a sporting concept car and an automobile set to see the light of day. Innovative real-world cars and trucks take years of product development and huge investments by automakers. Should their bet on superior technology and a willing consumer base fail, it could damage the company’s reputation for years.
The auto shows of late 2013 and early 2014 demonstrated that the world’s top automakers are ready to introduce cars that will drive their brands in very different directions. In one case, it means a car brand known for excess will get an electric motor; in another, it involves a famously durable pickup truck getting a new suit of body armor. Here are seven soon-to-launch vehicles that represent major gambles for automakers.
1. Hyundai Tucson Fuel Cell Crossover
Tell customers they need a hydrogen station to fill up a car’s tank and you have a gamble on your hands. Though Asian automakers are paving the road for hydrogen fuel cell vehicles, California drivers (who else?) are among the first getting a shot at the innovative technology. In fact, the Hyundai (HYMLF.PK) Tucson and other fuel-cell models have electric motors on board, which has sparked a bit of a feud between electric car makers that will power their vehicles using hydrogen and those that already do so with lithium-ion batteries (one from Palo Alto stands out).
Hyundai is powering full-steam ahead with its fuel-cell Tucson that produces only water vapor emissions. By March 2014, customers will be able to lease the crossover in Southern California at $499 a month with fuel and maintenance included. With respect to pricing, the Korean automaker is eliminating most of the risk it is taking in the rollout. The gamble comes in the bet the technology will catch on and the automaker’s extensive investment in development will be worth it.
2. 2015 Ford Mustang
Whenever you alter an automobile icon, you risk alienating the loyal car enthusiasts gathering in garages all across the country. Ford (NYSE:F) took numerous chances in the redesign of its classic muscle car. The 2015 Mustang appears less aggressive to the eye than its ancestors, but even more controversial was the inclusion of a four-cylinder engine model.
A Mustang that saves fuel? Before wondering what heathens Ford consulted in the new Mustang’s design, it’s useful to recall the expanding auto market. China is the biggest car buyer; India is growing rapidly. Ford expects that global clientele will appreciate a more efficient ‘Stang. For the car guy that loves the roar of the Mustang V8, Ford made sure to up the horsepower quotient in that model. Bet hedged.
3. Cadillac ELR
What do Cadillacs and fuel efficiency have in common? Prior to the announcement that GM’s (NYSE:GM) luxury brand had a plug-in hybrid model on the way, few would put the two together in a sentence. That’s about to change with the Cadillac ELR, which is based on the Chevy Volt powertrain and delivers electric-only power for more than thirty miles.
Cadillac is taking a two-pronged gamble with the ELR. On one hand, the lack of the Cadillac growl in electric mode may turn off some loyal fans. On the other hand, the steep price tag presents a greater challenge. At a base price over $75,000, it’s reasonable to wonder how many will pay such a sum when some other highly regarded Cadillacs cost far less. That’s not to mention the all-electric Tesla (NASDAQ:TSLA) Model S, which also has a lower base price than the ELR and a much greater all-electric driving range.
4. Honda FCEV
Honda (NYSE:HMC) has taken up the cause for fuel-cell vehicles as well. In fact, the Japanese automaker already has a limited-edition hydrogen car on the road in California. The concept Honda FCEV, which appeared at auto shows in late 2013, is the fuel-cell car with the most futuristic design. Like its competitors, it has the potential to travel over 300 miles after fueling the hydrogen cells that power an electric motor.
On top of the hydrogen factor, which still must pass numerous hurdles to make it to the mainstream, Honda is taking a major gamble on the styling front. Are auto consumers ready for a car that looks at home in a sci-fi flick?
5. Kia K900
Auto consumers on the hunt for a stately, long-wheelbase luxury car don’t typically put Kia (KIMTF.PK) at the top of their options list. Yet the Korean value brand has officially entered the luxury market in the U.S. with the introduction of the Kia K900. The K900 has many things luxury consumers love: rear-wheel drive; a 420-hp V8 among its engine options; and an interior that’s more spacious than full-size luxury competitors’ offerings.
One could consider it a major gamble since it remains to be seen whether consumers shopping for a Mercedes (DDAIF.PK), BMW (BMAXY.PK) or Cadillac will instead turn to a Kia. If there’s a car that can do it, the K900 has a shot.
6. Toyota FCV
Toyota (NYSE:TM) knows a thing or two about gambling on innovative technology. The development of the Prius hybrid family remains one of the biggest game-changing moves in recent decades. With the introduction of a fuel-cell vehicle, Toyota is showing it is not done making history.
Like the Honda and Hyundai fuel-cell vehicles, the Toyota FCV will appear by 2015 and use hydrogen to power electric motors that emit water vapor as the only emission. As the top selling automaker on earth, Toyota is taking a significant risk in betting hydrogen will supplant lithium-ion batteries in the coming decade. If it wanted to, Toyota could have doubled down on plug-ins in the line of the Prius and Model S.
7. 2015 Ford F-150
Among the biggest industry risks in a decade, Ford may have taken the cake with its introduction of an aluminum-body F-150 for the 2015 model year redesign. As a rule, doing anything to mess with the runaway best-selling vehicle in the United States for 30+ years is an enormous gamble.
Furthermore, F-Series pickup owners depend on the durability and “Ford Tough”-ness that has made the vehicle so popular among construction workers and other people relying on this vehicle for their jobs. Another question is pricing. Will Ford be able to keep the cost low with an aluminum body?