Delivering More Fuel-Efficient Vehicles

Consumer demand for more fuel-efficient and cleaner vehicles continues to grow. Ford is taking a multipronged approach to meeting this demand. We have committed to improving the overall fuel economy of our entire fleet. In 2009, Ford committed that every all-new or redesigned vehicle we introduce will be best in class or among the best in class for fuel economy in its segment. Since then, we have followed through on this commitment with vehicles introduced in both the United States and Europe, and we will continue to do so in future product launches. According to the U.S. Environmental Protection Agency (EPA), no automaker has posted a larger fleet-wide gain in fuel economy in the past five years than Ford has. Based on EPA measurements, Ford's combined car and truck fuel economy has improved nearly 20 percent since 2004 – almost double the gain of the next-closest competitor. In addition, Ford's tailpipe CO₂ emissions are declining. In the United States, Ford's 2009 fleet-wide average CO₂ emissions are down approximately 9 percent from 2008.

As of May 2010, many of our vehicles meet the commitment to be best in class or among the leaders in their segment for fuel economy. For example:1

• The all-new Ford Fiesta, which will be introduced in North America in 2010, will deliver best-in-class fuel economy for its segment with an EPA-rated 40 mpg on the highway, topping both the Honda Fit and the Toyota Yaris. The Fiesta will use the combination of a Ti-VCT 1.6-liter engine, PowerShift dual-clutch transmission and other fuel-economy technologies to accomplish this best-in-class performance.
• The 2011 Ford Mustang with a new Ti-VCT 3.7-liter V6 engine and six-speed automatic transmission will deliver up to 31 mpg on the highway. This vehicle delivers superior performance – including 305 horsepower – and better fuel economy than any other V6-powered sports coupe in the world.
• The 2011 Mustang GT, featuring a new 5.0-liter V8, delivers up to 26 mpg on the highway – better than any competitor – as well as 412 total horsepower and 390 lb.-ft. of torque.
• The next-generation Ford Edge is expected to have unsurpassed fuel economy in its segment of 27 mpg for the 3.5 TiVCT and best-in-class fuel economy with the 2.0-liter EcoBoost engine.
• The next-generation Lincoln MKX FWD V6 is expected to have unsurpassed fuel economy of 25 mpg in the midsize luxury crossover segment and to deliver class-leading power and torque.
• The 2011 Ford Super Duty® diesel truck with a 6.7-liter Power Stroke® V8 turbocharged diesel powerhouse leads its class in fuel economy, towing and hauling. This engine will also have significantly lower tailpipe emissions than previous models.
• The all-new Ford Explorer SUV, which goes in to production later this year, will feature fuel economy that is at least 25 percent better than the current Explorer.
• The 2010 Ford Flex features unsurpassed fuel economy among 6-7 passenger crossover, with an EPA-rated 24 mpg highway.
• The 2010 Lincoln MKT features unsurpassed fuel economy in the full-size luxury crossover segment from both the 3.7-liter V6 FWD, which has an EPA rating of 24 mpg highway, and the 3.5-liter V6 AWD EcoBoost™, which delivers 355 horsepower and 350 lb.-ft. torque and gets an EPA rating of 22 mpg highway.
• The 2010 Ford Taurus SHO with a V6 EcoBoost engine has unsurpassed fuel economy in its segment.
• The 2010 Ford Escape and Mercury Mariner Hybrids lead their segment,2 with an EPA-rated 34 mpg city.
• The 2010 Ford Ranger with an I-4 engine leads its segment with an EPA-rated 27 mpg highway.
• The 2010 Lincoln MKX is unsurpassed in its segment with an EPA-rated 25 mpg highway.
• The 2010 Ford Fusion and Mercury Milan Hybrid and gas (S-Series I-4 automatic) versions have best-in-class fuel economy for midsize sedans,3 surpassing the Toyota Camry and Honda Accord. The Fusion and Milan Hybrids are EPA rated at 41 mpg city/36 mpg highway, and the gasoline S-Series I-4 automatics are EPA rated at 23 mpg city/34 mpg highway.
• The 2010 Ford F-150 with a 4.6-liter V8 gets unsurpassed fuel economy in its class, with an EPA-rated 21 mpg highway.4
• The 2009 Ford Fiesta ECOnetic with 1.6-liter Duratorq TDCi Diesel engine is one of the most fuel-efficient five-seat family cars in Europe, and it emits only 98 g/km of CO₂.
• The second generation of the Ford Focus ECOnetic with a 1.6-liter, 109 PS TDCi engine emits only 104 g/km CO₂ and has fuel consumption of 4.0 l/100 km.
• The second-generation Focus ECOnetic equipped with optional start/stop technology emits only 99 g/km CO₂ and has fuel consumption of 3.8 l/ 100 km.

To accomplish our fuel-economy goal, we are focused in the near term on implementing the most cost-effective fuel-efficiency technologies across a large volume of our vehicles, as well as on introducing new products that offer improved fuel efficiency without compromising style or performance. We are concentrating on affordable and near-term sustainable technology solutions that can be used not for hundreds or thousands of cars – but for millions of cars, because that is how Ford can truly make a difference.

For example, we are introducing a wide variety of new engine and transmission technologies, as well as electrical system improvements, weight reductions and aerodynamic improvements that will deliver significant fuel-economy improvements for millions of drivers in the near term. Between 2008 and 2013, we will introduce 60 new or significantly upgraded engines, transmissions and transaxles globally to help us improve fuel economy and reduce CO₂ emissions across our global fleet.

In 2009, we began implementing the EcoBoost engine, a key technology in our fuel-efficiency strategy that uses gasoline turbocharged direct-injection technology. EcoBoost delivers 10 to 20 percent better fuel economy, 15 percent fewer CO₂ emissions and superior driving performance compared to larger-displacement engines. Because EcoBoost is affordable and can be applied to existing gasoline engines, we can implement it across our vehicle fleet, bringing fuel-efficiency benefits to a wider range of our customers.

The EcoBoost V6 was introduced on the 2010 Lincoln MKS, Lincoln MKT, Ford Taurus SHO and Ford Flex. Thanks largely to the EcoBoost technology, the Lincoln MKT and Taurus SHO are unsurpassed for fuel economy in their respective segments. In 2010, we began introducing additional EcoBoost engines in the United States and Europe, including smaller I-4 EcoBoost engines. In North America we will introduce the V6 3.5-liter EcoBoost on the Ford F-150. We will also introduce a 2.0-liter, four-cylinder EcoBoost engine on the next-generation Ford Edge and the all-new Ford Explorer. The all-new Explorer will be a "game changer" in large SUV fuel economy, with 25 percent better fuel economy than the previous model. In Europe, we are introducing I-4 EcoBoost engines on the Ford C-MAX (with a 1.6-liter, four-cylinder engine) and the Ford Galaxy, Mondeo and S-MAX (with a 2.0-liter, four-cylinder engine). In addition, the next-generation Ford Focus, which will launch in Europe in 2010, will get 1.6-liter, four-cylinder EcoBoost engine.

We are also expanding EcoBoost applications to additional countries. For example, in 2010 we will introduce EcoBoost in China on the Ford Mondeo, and in 2011 we will introduce a 2.0-liter I-4 EcoBoost engine in Australia on the Ford Falcon. By 2013, Ford plans to offer EcoBoost engines on 80 percent of its global nameplates, with an annual volume of vehicles with EcoBoost at 1.5 million globally.

These EcoBoost engines, which use smaller-sized engines to produce both fuel economy and power performance, illustrate Ford's plans to use smaller, boosted engines to deliver excellent fuel economy and performance throughout our vehicle lineup.

So far, EcoBoost has been a great success in our U.S. implementation, where it is attracting both younger buyers and customers from other automakers (called "conquest" sales). The Ford Taurus SHO and Lincoln MKS with Ecoboost are attracting buyers that are 10-plus years younger than base Taurus and MKS buyers. The Taurus SHO with EcoBoost has the second-highest conquest rate in its segment, and the Ford Flex with EcoBoost has a 75 percent conquest rate. Furthermore, EcoBoost vehicles are proving to be more profitable, because EcoBoost buyers are adding more features and buying with fewer incentives. EcoBoost is also receiving high marks for customer satisfaction. In rating their EcoBoost engines, 100 percent of Lincoln MKT buyers surveyed said they were satisfied with their engine's performance, including power and pickup, and 99 percent said they were satisfied with their engine's overall operation, according to the Global Quality Research System (GQRS) study conducted by the RDA Group.

In Europe, we have introduced the ECOnetic line of vehicles, which are higher fuel-efficiency and lower-CO₂ versions of our most popular products. So far, we have launched ECOnetic versions of the Ford Focus, Mondeo, Fiesta and Transit. We recently introduced the second-generation Ford Focus ECOnetic, which includes optional start/stop and smart regenerative charging technology, and emits just 99 g/km CO₂. These vehicles are being recognized for their significant improvements in fuel economy and CO₂ emissions. In December 2009, for example, the Ford Fiesta ECOnetic won Top Gear's "Green Car of the Year Award." To read more about our ECOnetic vehicles, please see the discussion of fuel economy and greenhouse gas emissions in the Environment section.

In our Asia Pacific and Africa region, we are focusing our near-term fuel-efficiency efforts on implementing EcoBoost engines and PowerShift transmissions, which we plan to introduce across our vehicle lineup in this region in the next few years. As mentioned previously, in China in 2010 we will introduce the Ford Mondeo with an EcoBoost engine and Powershift transmission. We expect it to be best in its segment for fuel economy when it launches. And in Australia in 2010 we will launch an EcoBoost version of the Ford Falcon. We will also be launching the Ford Fiesta with a 1.6-liter Ti-VCT powertrain and six-speed Powershift transmission throughout our ASEAN markets.5 This vehicle will be the first in the B-car segment to offer consumers this level of sophistication in powertrain technology and will be among the leaders in its segment in fuel economy. In India, we recently introduced the Ford Figo, which has highly fuel-efficient 1.4-liter TDCi diesel and 1.2-liter gas engine options. This introduction is significant to our success in India, as fuel economy is the most important purchase criteria in that country.

In South America, we are improving fuel economy by introducing some of the efficient engine and transmission technologies currently used in North America and by using technologies relevant to the widespread use of biofuels in Brazil. For example, we have implemented improved engine compression ratios – i.e., the ratio at which the air and fuel mixture is compressed in the engine combustion chamber – on flexible-fuel vehicles in Brazil. This optimizes fuel efficiency in vehicles using biofuels, which are higher octane than petroleum-based gasoline. We have also improved the gearing ratios on our "B car" offerings, including the South American Ford Fiesta, EcoSport and Ka, which further improves fuel economy. And, we have made significant improvements to the aerodynamics of the South American Ka for the 2010 model year, further increasing fuel economy. We are working on additional fuel-economy improvements for future model years of vehicle programs that are currently under development. For example, we plan to introduce a new engine on the 2010 South American Focus and the all-new 2012 EcoSport. This engine will improve fuel economy compared to current engines due to reduced internal friction and improved electronic throttle controls. We are also planning to introduce even more fuel-efficient twin independent variable cam timing engines and direct injection engines, battery management systems, smart alternator systems and dual-clutch automatic transmissions, as well as improved aerodynamics, on additional vehicles from the 2012 model year and beyond.

Overall, we are continuing to develop and introduce advanced technologies – such as battery electric vehicles – that improve fuel efficiency, reduce emissions and reduce dependence on foreign oil. In the mid to long term, we will implement these advanced technologies as they become cost effective. You can read about our other near-, mid- and long-term plans to improve fuel economy in our Sustainable Technologies and Alternative Fuels Plan.