Los Angeles — The death of giant, truck-based SUVs has been greatly exaggerated.
Ford Motor Co.’s decision in 2003 to shelve its supersize 19-foot-long Ford Excursion SUV was seen as the end of an era. The world was running out of oil and hybrid vehicles were the future. The Sierra Club dubbed the Excursion the “Ford Valdez” — a reference to the crippled Exxon oil tanker that blackened Alaska’s coastline — while then-Ford CEO Bill Ford promised a shift to smaller, greener SUVs like the hybrid-electric Escape.
Fifteen years later and dinosaurs still roam the Earth. Indeed, they are thriving. In Los Angeles last week, Ford introduced an all-new, bigger-than-ever $49,000, 181/2-foot-long Ford Expedition — a fraternal twin to the $72,000 Lincoln Navigator SUV that the automaker released earlier this fall. Jeep is getting into the full-size SUV space with its 2019 Grand Wagoneer.
Their introduction points out a duality for carmakers: On one hand, companies like Ford promote a narrative of the future with advanced EVs and robotic piloting. On the other hand, they are turning out ever-bigger SUVs. The reason is simple: Big SUVs are hugely profitable. And those profits finance development of advanced battery systems and robotic cars.
“Big, profitable SUVs really enable us to do the things we need to do,” said Craig Patterson, marketing manager for Ford utility vehicles. “There are a lot of different ways to go with autonomous vehicles and electrified vehicles — and the future is uncertain. Having the foundation of profitable vehicles like F-150, Expedition and Navigator allows us to have the cash flow we need to invest in all these technologies.”
The Chevy Suburban innovated the enclosed pickup back in 1935, but the segment really hit its stride in the mid-1990s as SUVs squeezed out mid-size and large family sedans. Customers with growing families could climb the product ladder from, say, a compact Ford Escape to a mid-size Explorer to an Expedition.
GM expanded its truck offerings with GMC and Cadillac badges, while Japanese brands with full-size pickups — Toyota and Nissan — saw the opportunity with the Sequoia and Armada mega-utes. The vehicles gushed profits, and Detroit makers looked to expand the XL SUV trend with vehicles like the GMC Hummer and Ford Excursion.
But they hit a wall in 2002 as terrorism and green protests grabbed headlines. “What would Jesus drive?” ads aired on television.
“Kids were coming home from school and saying: ‘Mom, you’re ruining the environment by driving this vehicle,’ ” remembers Patterson. “There was a significant decline (in sales), but demand never went away.”
Neither did technological progress.
“The industry has continued to innovate,” said AutoPacific auto analyst Dave Sullivan, who is a former Ford product manager. “The highway fuel economy for a 6,000-pound vehicle is almost on par with what a midsize sedan was 12 years ago. People need to pack their SUV with hockey sticks and tow a camper. You can’t do that with a Prius.”
While Ford got huzzahs from the Sierra Club for scaling back (“William Clay Ford will go down as the man who was smart enough to kill the Excursion before it became an Edsel,” cheered Sierra Club executive director Carl Pope), GM continued its full line of profitable trucks. Combined sales of GM’s Chevrolet Suburban and Tahoe, GMC Yukon and Cadillac Escalade last year totaled more than 250,000. Insiders say the $73,000 Cadillac Escalade alone is good for $35,000 profit for each one sold.
On the other side of the Great Recession, a new generation of buyers has embraced them.
“Now SUVs are back in a big way,” Ford’s Patterson said. “Millennials are now getting to the point where they are having children. They are following the same patterns their parents did — they are falling in love with SUVs.”
The all-new Excursion has some catching up to do with GM’s perennial sales leaders — which are due for a remake of their own soon.
“The money that they’re making off these they are turning around and investing in whatever the future may be — ride-sharing, autonomous,” Sullivan said. “Ford and GM are laser-focused on the future, and they are reinvesting those profits.”
But those profits may be in danger as green activists and governments like California — following the lead of France and the United Kingdom — target big SUVs again with threats of gas-engine bans over the next 20 years. Twenty years is the product cycle of the Excursion.
“There is a clash coming between what the regulators are pushing for, and what consumers want,” said IHS Markit auto analyst Stephanie Brinley. “You don’t want to electrify these things, because you make them unprofitable. And that’s a challenge.”
With lighter aluminum bodies, 8,700- to 9,300-pound towing capacities and a truckload of high-tech features, Ford isn’t bashful about its new generation of big utes.
“All of the (automakers) adapt to ever-changing requirements whether state or federal,” Expedition Program Director Bill Hoevener said. “You look back 15 years and these things didn’t have fuel efficiency. Now Expedition gets 24 miles per gallon on the highway.”
Henry Payne is auto critic for The Detroit News. Find him on Twitter @HenryEPayne.