Sales results for natural gas-powered F-150 draw mixed reactions

HOUSTON — When Ford announced last summer it would sell a version of its F-150 pickup specially made to run on natural gas, many saw it as a watershed moment.

Few light-duty vehicles used by everyday consumers are available in a natural gas configuration. Suddenly, the most popular model in America’s best-selling line of vehicles would come in a version that could run on the relatively cheap, clean fuel.

But early sales numbers show that the public isn’t exactly clamoring for an F-150 powered by compressed natural gas. Ford readies the trucks for CNG conversion on the assembly line, and contractors later perform the conversion by special customer order.

Since sales began in December, just over 200 of the CNG-prepped trucks have been sold.

Ford officials say they aren’t worried.

“The first year is always a bit challenging because it’s new to everyone who is looking at it,” said Jon Coleman, Ford fleet sustainability and technology manager. “Once we get established in the market, then we’ll see the sales pick up substantially.”

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Coleman said the third-party modifiers that convert the vehicles only began their work in the last few months, so he doesn’t view the figures as especially low.

“Having that number of orders this early on, we think, is a fairly good endorsement,” he said.

Analysts aren’t as upbeat about the numbers, but they say that from a business perspective, it might not matter for Ford.

“You’re talking small numbers when in the U.S., 16 million vehicles could be sold this year,” said Christian Mayes, an analyst with Edward Jones Equity Research, referring to total projected car and truck sales in 2014. “It’s pretty niche.”

Still, the experience with CNG-ready F-150s isn’t necessarily a dud. Mayes said Ford doesn’t have to use many resources to produce CNG-ready trucks, nor does it have to do the heavy lifting of conversion.

Essentially, the CNG-ready F-150 is giving Ford the chance to test the waters with alternative fuel vehicles — and get some good publicity — without much cost or risk.

“It’s not going to move the needle much for Ford, but it’s about giving customers choice,” Mayes said.

Last year, Ford announced that its 2014 F-150 trucks would come in two options beyond the typical gasoline model: one that runs on natural gas and another that can run on natural gas or gasoline.

Natural gas is less expensive and produces fewer polluting emissions. Ford’s move was significant, since at the time, U.S. automakers geared most of their CNG-ready vehicles toward heavier-duty use. A version of the Honda Civic was the only natural gas-fueled personal passenger car available for sale directly to U.S. customers.

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For the F-150, Ford produces a vehicle that has engine components prepped to run on CNG, and then arranges to hand the trucks over to third-party modifiers to do the nuts and bolts of the conversions.

Because gasoline is a liquid, it naturally lubricates the engine it powers. CNG is a gas, so that lubrication doesn’t occur and the engine runs hotter. Ford’s CNG-prepped vehicles take that into consideration and are made with more heat- tolerant engines, said Paul Shaffer, managing director for the Dallas location of Westport, one of Ford’s largest modifiers.

Through the dealer

Although vehicles converted to run on compressed natural gas have been in commercial fleets for years, Ford’s new system is significant for a couple of reasons.

The whole transaction occurs through the dealer. Moreover, Ford honors warranties for F-150s converted to CNG by its approved modifiers, which isn’t always the case with CNG conversions.

This one-step system for purchasers appeals to Cheritta Johnson, assistant director of fleet services for the city of Dallas, which recently ordered 65 of the new F-150s.

“You don’t have to deal with two different entities if it breaks down,” Johnson said.

Dave Hurst, principal research analyst at Navigant, said the consumer market for CNG vehicles in the U.S. isn’t likely to grow soon. Only about 1,900 consumer-level CNG vehicles will be sold this year, he predicted.

29,000 vehicles

By contrast, he said, fleets may buy 29,000 CNG-powered vehicles this year, mostly heavier duty trucks like Ford’s F-250 and F-350.

He said part of the reason CNG demand isn’t taking off is that fuel economy for gasoline-powered vehicles is improving. Mayes said the aluminum body Ford is introducing on the 2015 F-150 is far more significant than this year’s natural gas model. The aluminum reduces the vehicle’s weight and makes it the most fuel-efficient F-150 yet.

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Every step taken to improve the fuel efficiency of gasoline-powered vehicles reduces the appeal of the more costly CNG vehicles.

According to Ford, an F-150 Regular Cab 4×2 with a 3.7 liter V6 engine starts at $24,445. The prepping option adds another $315. Converting it to run on CNG – which involves new fuel tanks, fuel lines and fuel injectors – bumps the price tag by $7,500 to $9,500.

Compressed natural gas costs about $1.25 less per equivalent gallon of gasoline, according to Energy Department figures. Even with that difference, Ford acknowledges that only higher-mileage drivers are likely to see long-term savings if they switch to CNG.

“The more fuel you use, the more the economics makes sense,” Coleman said.

Drivers also face the challenge of finding places to fill up. Only 686 CNG pumping stations are available to the public nationwide, according to the Energy Department. Texas has 41. Shaffer, of Westport, said most of his customers are fleet operators, because they have more predictable routes and know they’ll have access to CNG infrastructure – often at private company facilities.

“We understand this will mostly be a fleet vehicle,” Ford spokesman Nik Ciccone said, “but it’s also a way to test the waters with consumers.”

Zain Shauk contributed to this report.


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