Why the City of London Is Helping Ford Motor Company Test a New Van

By John Rosevear Markets Fool.com

Ford Motor Company (NYSE: F) said that it has partnered with the City of London on a project to help improve air quality in the British capital city -- and to help test and promote an upcoming new vehicle from the Blue Oval.

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Working with the City of London to test an upcoming hybrid commercial van

Ford said that it is providing 20 plug-in hybrid versions of its Transit Custom commercial van to businesses in London for a 12-month trial. The idea is that the vans will run solely on electric power for the majority of their daily trips, allowing Ford and the city government to "explore how these commercial vans can contribute to cleaner air targets while boosting operator productivity in urban conditions," Ford said in a statement.

One of 20 plug-in hybrid Ford Transit Custom vans set to participate in a year-long trial project in London. Image source: Ford Motor Company.

The project is partially supported by Transport for London, an effort funded by the U.K. government to help explore ways to clean up the city's polluted air. The hybrid commercial vans are key to the project.

"The freight sector's transition to ultra-low emission vehicles is central to cleaning up London's toxic air," said London mayor Sadiq Khan. He said that the data from the 12-month trial will be an "invaluable resource" for an ongoing city effort to encourage businesses to adopt low-emissions vehicles.

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"The U.K. is a global leader in low-emission motor technology. This new project, with nearly 5 million [pounds] of government money, has secured work here in the U.K. and demonstrates our commitment to not only reducing carbon emissions, but to work with industry on developing next generation technology that will make a real difference to people's lives," said Nick Hurd, the U.K.'s Minister of State for climate change and industry.

The plug-in hybrid Transits are being designed and engineered at a Ford technical center in Dunton, Basildon, Essex. A Ford factory in Essex makes engines for the Transit vans produced in Europe.

Why it's important: These hybrid Transits could have a significant global impact

Earlier this month, Ford confirmed that a plug-in hybrid version of its big-selling Transit commercial van is in development and expected to join Ford's global product lineup in 2019. It's one of 13 new advanced hybrids or electric vehicles that Ford has promised to introduce by 2020 in a $4.5 billion "electrification" effort.

This is a big deal. The Transit van is among the biggest-selling commercial vehicles in the U.S., Europe, and China -- three huge markets in which regulators are actively seeking to reduce vehicle emissions. If Ford can show that the upcoming plug-in version can offer bottom-line benefits to small (and not-so-small) businesses at an affordable price, it could turn out to be a significant product -- not just for global air quality, but for Ford's bottom line as well.

This project with the City of London could give Ford the data it will need to make that argument.

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John Rosevear owns shares of Ford. The Motley Fool owns shares of and recommends Ford. The Motley Fool has a disclosure policy.