Brilliant presentation by Ford Wednesday’s redesign of the fossil-fueled Mustang sports car goes against the industry’s narrative of ditching gasoline and diesel cars to make way for electrified models.

Ford is betting the 58-year-old Mustang has enough life left to pay for the electric company’s future, with CEO Jim Farley investing US$50 billion to build two million electric vehicles a year by 2026. With the Mustang, Ford also offers a plug-in version of the Mach-E, sales of which are up 49% this year.

Despite this, gasoline-powered Mustangs still sell better than electric-powered ones. That helps explain why Ford has invested in a new version to give the low-slung Deuce coupe what it calls “sexy and edgy” styling and the most powerful V8 engine ever.

“We definitely see a market there, and that’s why we invested in this product,” Kumar Galhotra, president of Ford’s newly formed Blue unit, which deals in traditional combustion engine vehicles, said in an interview. “The entire Ford Blue portfolio is a profit engine and will continue to fund the company’s future needs.”

Despite the dramatic unveiling of the seventh-generation Mustang on the banks of the Detroit River at the North American International Auto Show on Wednesday, sales of the classic Mustang this year are expected to be less than half of what they were six years ago. It will surpass the Mach-E by 2027, according to a forecast by researcher LMC Automotive.

Analysts see this as the beginning of the end of the famous car with a roaring engine under the hood. Ford is already preparing for the day when it puts the old warhorse out to pasture to make way for a plug-in pony. Farley said he expects more than half of Ford’s total sales worldwide to be electric vehicles by 2030.

A tight rope

“Ford is walking a tightrope,” Jeff Schuster, president of LMC Americas, said in an interview. “They have the competitive and successful Mach-E, and that allows them to slow the transition of the regular Mustang to an electrified version. And they may get some short-term benefit from it.”

That’s because by the middle of the decade, Ford looks set to dominate the gasoline muscle car market. Stellantis, maker of the Dodge Charger and Challenger, announced last month that it will phase out its gasoline-powered hot rods at the end of next year to make way for electric muscle cars. And General Motors doesn’t plan to produce its Chevrolet Camaro after 2025 as it transitions to an electric lineup.

“We expect a certain number of customers, those who really want this type of product, will consider the Mustang,” Galhotra said of current Charger, Challenger and Camaro buyers.

Read: South Africa needs to stop unfair electric car taxation: Mercedes-Benz CEO

Although muscle cars accounted for just 1.4% of the US market last year – down from 2.1% in 2015 – they are still a profitable proposition, sold mainly to affluent baby boomers , willing to spend big to experience the rumble of an open throttle. With this Mustang, they can feel it before they even get behind the wheel: Its key fob has a button that starts the engine as they approach the car.

Ford also carried over the Mustang’s most expensive components – the two engine options and mechanical platform – from the previous version. The automaker’s engineers improved, but did not replace, the 2.3l four-cylinder and 5l V8 engines that have powered Mustangs for years. Ford hasn’t released power figures yet, but said the V8 has been tweaked to generate more power than ever.

Most of the Mustang’s exterior sheet metal is new, except for the roof and door openings, which give the car a sportier look. But it is built on the same chassis that underlies the previous generation of the car.

“Why would we continue to make drastic changes when we can take this existing platform and really improve it further?” said Eddie Hahn, chief engineer of the new Mustang.

The lean approach to the Mustang redesign symbolizes how Ford will selectively invest in gas burners to help Farley realize his goal of turning the company’s best-selling combustion engine models, such as the F-150 bakkie and Bronco SUV, into “profits and cash flow.” companies.

“We’ve been very careful about where we invest” in the Mustang, Galhotra said. “Investments should be made where customers will value it most.”

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Farley has pledged to boost profitability across Ford’s lineup, in part by cutting $3 billion in internal combustion engine costs. Earlier this month, it cut 3,000 jobs, mostly from its Ford Blue division, and could cut thousands more.

In a move that may offend traditionalists, Ford has removed the twin-head dashboard design that has been on the car since its inception. Instead, it installed a wide, curved touchscreen that flows from the steering wheel to the middle of the dashboard and is aimed at the driver. It also eliminated all knobs except the volume dial to appeal to those used to swiping and pinching on their smartphones.

“We’re trying to attract new customers, from young millennials to Gen Z people,” said Jim Owens, Mustang’s brand manager, who described himself as a baby boomer. “Our generation is getting older and may not be buying as many cars as they used to.” — Keith Naughton, (c) 2022 Bloomberg LP

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