Fuel Economy and Greenhouse Gas Emissions

Our current fuel economy performance is discussed in this section. We are also pursuing the development of new technologies with fuel economy benefits for the future, including additional hybrids, plug-in hybrids, battery electric vehicles, advanced diesel engines, hydrogen-fueled internal-combustion engines, fuel cell vehicles and biofueled vehicles, as discussed in the Sustainable Technologies and Alternative Fuels Plan. Our climate change strategy and participation in public policy processes related to climate change and fuel economy are discussed in the Climate Change section.

Fuel Economy Performance – U.S.

For the 2008 model year, the Corporate Average Fuel Economy (CAFE) of our cars and trucks increased by 2.9 percent relative to 2007. Preliminary data for the 2009 model year shows a 4.0 percent improvement in CAFE compared to 2008, with a 2.2 percent improvement for cars and a 4.7 percent improvement for trucks.

In 2008, Ford committed that beginning with the 2010 model year, all of the new vehicles will be best in class or among the best in class for fuel economy in their segments. Many of Ford's 2009 model year vehicles already meet this promise. For examples of Ford's 2009 and 2010 model year vehicles that are best in class for fuel economy, please see "Delivering More Fuel-Efficient Vehicles."

As seen in the Fuel Economy of U.S. Ford Vehicles by EPA Segment graphic, our 2009 U.S. vehicles are generally competitive with others in the industry in fuel economy, ranking better than average in three of nine categories, worse in two and the same in four.

For the 2009 model year, we offered six vehicles that get 30 mpg or better, based on highway fuel economy estimates. These vehicles include the Ford Focus (models of which get 35 mpg on the highway), Ford Escape Hybrid, Mercury Mariner Hybrid, and Volvo V50, C30 and S40. Compared to 2008, the number of 2009 vehicles that achieve 30 miles per gallon or better has increased.

In 2007, Congress passed legislation requiring the National Highway Traffic Safety Administration (NHTSA) to set standards to increase average fleet-wide fuel economy to 35 mpg by 2020. In March 2009, NHTSA issued CAFE regulations for the 2011 model year. As a result of President Obama's One National Standard announcement in May 2009, it is expected that the Environmental Protection Agency (EPA) and NHTSA will issue standards under a joint rulemaking in early 2010. The EPA will issue greenhouse gas standards under the Clean Air Act for the 2012–2016 model years, and NHTSA will issue rules setting CAFE standards for the same period. The EPA and NHTSA rules are to be aligned with each other so that they effectively amount to one standard.

Fuel Economy Performance – Europe

In Europe, we have reduced the average carbon dioxide emissions of the vehicles we sell by 18.9 to 22.9 percent depending on the brand, compared with a 1995 baseline. We have achieved these reductions by introducing a variety of innovations, including an advanced common-rail diesel engine, available on many of our vehicles, and lightweight materials.

In 2007, we announced the Ford ECOnetic label, a new line of ultra-low-CO2 alternatives for selected car lines that leverages several advanced fuel-saving technologies. The ECOnetic name was chosen because it links ecologically friendly technology to our "energy in motion" design philosophy, which combines driving quality and emotional styling. These cars use a combination of the latest common-rail diesel powertrains and other carefully selected features engineered to reduce CO2 emissions to the absolute minimum. The technologies used include high-strength steels and other lightweight materials; electric-power-assisted steering; an aerodynamics kit, including lowered ride height and aerodynamic details such as wheel covers and wheel deflectors; low-rolling-resistance tires; special low-viscosity transmission oil; and low-friction engine oils developed by Ford's fuel partner BP. The following table highlights the fuel economy and CO2 improvements and other benefits of the ECOnetic models introduced thus far.

Benefits of Ford's ECOnetic Models1

We are also working to meet EU regulations for CO2 emissions from passenger vehicles. In December 2008, the EU approved a regulation of passenger car CO2 emissions that limits the industry fleet average to a maximum of 130 g/km, using a sliding scale based on vehicle weight. This regulation provides different targets for each manufacturer based on its respective fleet of vehicles, according to vehicle weight and CO2 output. Limited credits are available for CO2 off-cycle actions ("eco-innovations"), certain alternative fuels and vehicles with CO2 emissions below 50 g/km. The specifics of these regulations will begin being issued in 2012. For manufacturers failing to meet targets, a penalty system will apply, with fees ranging from €3 to €95 for each g/km shortfall in the years 2012–2018, and €95 for each g/km shortfall for 2019. For 2020, an industry target of 95 g/km has been set. This target will be reviewed again in 2013.