Ford Motor Co., which pioneered the racy pony-car body style 55 years ago, will use the Mustang name and insignia on an electric crossover utility vehicle coming next year.

The automaker said it’s expanding the Mustang stable for the first time with a model that will lead its charge in the electric-vehicle market dominated by Tesla Inc. The battery-powered Mustang Mach-E will be unveiled November 17 at an event preceding the Los Angeles Auto Show.

“The launch marks the first real milestone in Ford’s increased emphasis in electrification, and more importantly marks an increased effort by the legacy US automakers to be relevant in electrification,” Dan Levy, a Credit Suisse analyst, wrote in a report on Thursday. “For all the competition entering the market we are still awaiting the EV that will be a true competitive threat to Model 3, especially in the US.”

Ford is spending $11 billion to roll out 40 electric and hybrid vehicles by 2022. It’s employing a strategy of electrifying its icons, first with the Mustang electric crossover and then with hybrid and battery-electric versions of its top-selling F-150 pickup truck. The automaker aims to show its EVs can be fast and tough and aren’t just so-called compliance cars intended to meet more-stringent environmental regulations.

Moving towards electrification

Ford is beginning its pivot toward electrification by closing a 46-year-old engine factory in suburban Detroit that produces big V8 engines for the Mustang Shelby GT350. The United Auto Workers, now voting on a new contract with the automaker, is concerned the switch from gasoline to battery power endangers employment of 35,000 union members.

Tesla has commanded a dominant share of the US electric-vehicle market thanks to the Model 3 sedan, which starts at $39,490. Premium brands have priced models including the Audi e-tron, Jaguar I-Pace and Mercedes-Benz EQC too high to snare many buyers, Credit Suisse’s Levy said. Lower-priced entries including the Hyundai Kona, Kia Niro, Nissan Leaf and Chevrolet Bolt have struggled because they cost roughly $15,000 more than comparable models powered by internal combustion engines.

Ford’s battery-electric vehicle “should provide a more compelling alternative at the Model 3 price range than the other comps, especially given the performance focus,” said Levy, who rates Ford a buy and Tesla a sell. “However, the ultimate proof point of its success will be if it can truly take BEV share from the Model 3 – far from guaranteed.”

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