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January 12, 2009

Tony Van Alphen

Business Reporter

DETROIT–Magna International Inc. is teaming up with Ford Motor Co. Ltd. to build a battery-electric vehicle for the North American market. The two companies revealed here yesterday they have been working for more than a year on a project to develop and build a compact car that would arrive in showrooms sometime in 2011.

"I think we are within striking distance of bringing a viable electric vehicle to market," Magna co-chief executive officer Don Walker said in an interview after the announcement at the North American International Auto Show.

Unlike current hybrids, in which an on-board electric motor complements the main gasoline engine, the new generation of electric autos will be powered by batteries.

Magna said the vehicle will have an-board battery charger capable of plugging into a 110- or 220-volt standard outlet and will be able to recharge in eight hours, depending on the voltage of the outlet.

"We have leading-edge technology and the interest is there in this from consumers, governments, the car companies and parts suppliers. It's also very exciting for Ford and Magna."

Walker added the two companies are projecting volume of between 5,000 and 10,000 vehicles in the first year but that could climb depending on fuel prices and government support for consumer incentives.

Ford, which is also struggling in the current industrial turmoil that threatens the survival of its North American rivals, said the car will have a range of about 160 kilometres without using any gasoline and without affecting performance.

"The Ford BEV (Battery Electric Vehicle) is expected to offer consumers a familiar driving experience," the automaker said in a statement. "It will operate similar to a conventional vehicle but with smoother acceleration, less noise and zero emission."

The drive to green cars is a dominant theme at this year's show as automakers combat higher fuel prices and environmental concerns. General Motors Corp., Chrysler LLC and Toyota Motor Corp. are among the companies unveiling as many as 50 concept and production models that boast different forms of power.

Aurora-based Magna, one of the world's biggest auto-parts makers, will be responsible for the powertrain and battery modules for the unnamed Ford vehicle.

"In an ideal world, we'd like to make everything associated with the electrification of the car," Walker said.

The company is playing a key role in engineering for integration of the electric propulsion system and other systems.

The project has involved Magna's research and developments centres in Michigan, Austria and its Aurora headquarters.

"The technology has really moved quickly in the last few years around lithium ion batteries and we've been a leading-edge player," said Ted Robertson, Magna's executive vice-president for new product creation.

The two companies, which would not disclose project costs, have not decided where they will assemble the vehicle. However, Magna is considering building a battery plant for the project, Walker suggested.

Magna will also try to secure contracts to build other components in the vehicle since it already has the capability to produce most auto parts from frames to seats and instrument panels.

Walker said Ford and Magna had been talking about an electric car for two years before his company showed the Detroit-based auto giant its capabilities. Ford decided about a year ago to pursue a project with Magna.

"We've known Ford has been interested in being a greener company for years," Walker said. "Bill Ford Jr. (Ford's executive chair) has been pushing that a long time."

Ford also told several thousand journalists at the show that his company plans to introduce a battery electric commercial van in 2010 and a new generation of hybrid models, including plug-in versions in 2012.

"Ford is heading in the direction America and our customers want us to go, which is green, high-tech," he said.

"I think that is where society would like to see the entire industry go and Ford is going to lead that charge."

Derrick Kuzak, Ford's group vice-president of product development, said the company and Magna share the same vision for "the potential of electrification in transportation."

"This partnership leverages the technical expertise of two global companies to achieve a common goal, delivering a no-compromise, zero-emission, battery powered car for the retail market," he said.

Magna chair and founder Frank Stronach has shown a keen interest in recent years in alterative propulsion vehicles beyond the traditional fuel combustion engine.

Walker also confirmed Magna is pursuing electric vehicle projects with other automakers, although he would not elaborate.

"We have a lot other projects but not of this (Ford) magnitude," he said.