How a Carmaker Like Ford Will Spark Changes on the Grid’s Edge

“You change the fuel, you change the market and the customers you’re dealing with.”

Ford, the iconic American car company that pioneered the modern automobile, is also on the cusp of another major technology shift -- this one driven by the connection between the power industry and automobile electrification.

But this time around, Ford isn’t unique. Almost every carmarker is developing an EV and thinking about the business implications that will come as a result.

However, with multiple all-electric and plug-in hybrid models, Ford is attempting to move beyond simple production of automobiles and into a new customer engagement strategy that will change its relationship with technology providers, car owners and utilities.

I recently sat down with Mike Tinskey, director of Ford's global electrification division, at the Verge conference in San Francisco, to talk about how switching fuel from gasoline to electricity changes the company's approach to the market.

Tinskey has a long history at Ford. He was the first high-school intern at the company, and he has since worked his way through different divisions. Tinskey was at Ford when executives were toying with how to get deeper into the production of EVs. Initially, the company thought about entering through acquisition, but with a Ranger hybrid already in the works, it made sense to scale operations organically.

"We had the skill set already and had a good base. In 2007, we saw and predicted growth in the sector and made more investments," said Tinskey.

Ford now has three more models: the all-electric Focus, the Fusion plug-in hybrid, and the new C-MAX Energi plug-in hybrid. The company hopes this diversification will help retain its competitive position against up-and-comers like Tesla, which has seen strong growth in sales along with positive performance and safety reviews of its Model S.

But selling cars is only one piece of Ford's strategy. After making the decision to scale up its EV business, the company moved deeper into the power sector. 

"We noticed very quickly that time-of-use rates (TOU) were becoming an opportunity for us," said Tinskey. 

In 2011, Ford reached out to utilities in "progressive areas" to create a database of TOU rates. It built a simple tool for customers to track rate structures and figure out the best time to charge their vehicles. 

Although Ford had been working with utilities for years prior to model and assess the impact of EVs on the distribution grid, the TOU tool was one of the first big steps for the company into the world of utilities. In January of this year, it moved even further with the development of a pilot called MyEnergi Lifestyle.

The pilot features a partnership with Eaton, Infineon, SunPower, Nest Labs and Whirlpool to connect Ford's C-MAX Energi hybrid with smart appliances, solar production and mobile data about utility rates. The integrated system has been installed at two homes in California and Colorado.

Georgia Tech researchers predicted the platform could reduce energy costs by 60 percent. Tinskey said the early results are stacking up with the models.

"We're seeing the numbers we predicted," he said. "We're learning the art of the possible as we get together with some of the other industry leaders."

That's great news for homeowners, but it also potentially complicates Ford's relationships with utilities. This type of service can help power companies shift demand and phase out more expensive peaking generation. But if platforms like this actually take off in a big way, utilities could eventually face worrying declines in revenue. 

Ford's MyEnergi Lifestyle pilot is a prime example of the disparate forces converging around the grid edge -- creating new competition and collaboration opportunities for utilities.

While Tinskey said it moves Ford to the middle of the utility-customer relationship, he doesn't see the company as a threat to utilities.

"I would call us more of a conduit to the utility," he said. "We brought together players that don't often talk to one another. We will use that to help manage load, but the command is still going to come from the utility."

Competition between utilities and electric vehicle companies is mostly a thought exercise today. However, the convergence of technologies in sectors including the connected home, distributed generation, data analytics and EVs is already starting to happen. 

"I can already see that our role...is changing [from that of a service provider]," said Tinskey. "This is a new area of service -- we've never entered the customer's home like this."

So in a future dominated by distributed, localized energy, would Ford start looking more like a utility itself? Very likely not, said Tinskey. But he's not shutting out the possibility.

"I would never say never. You change the fuel, you change the market and the customers you’re dealing with."