Fuel

To reduce the life-cycle GHG emissions to the levels required for CO₂ stabilization requires the development of fuels with lower fossil carbon content,1 in order to augment the improvements in the fuel economy of our vehicles.

Electrification

Running vehicles partly or wholly on electricity reduces or eliminates CO₂ and other emissions from the vehicles and shifts the emissions to the electricity generation facility. The overall emission benefits depend on the fuel or mix of fuels used to make the electricity. Electrification addresses both energy security and climate change concerns because electricity can be made from a wide variety of fuels, including domestic sources and renewable energy. It also offers flexibility in tailoring lower-carbon solutions based on locally available fuels and technology options like carbon capture and storage. Our plans to introduce electric vehicles include the following:

• We will introduce the Transit Connect battery electric vehicle, a compact commercial utility van, for sales to fleets in North America in 2010 and then to Europe in 2011.
• By 2011, we will bring a battery electric Ford Focus to North America and then to Europe in 2012.
• We will introduce our next-generation hybrid technology and plug-in hybrid vehicles in North America in 2012 and in Europe in 2013.

Expanding electrification holds tremendous promise, but a range of implementation challenges must be considered. These challenges relate to cost, battery technology, the development of charging infrastructure, the interface with utilities and how to ensure that potential emissions-reduction benefits are realized. We have partnered with the U.S. Department of Energy, the Electric Power Research Institute, the New York State Energy Research and Development Authority and Southern California Edison to explore these and other issues involved in expanding the use of plug-in hybrid electric vehicles. This partnership was expanded in early 2009, and through it Ford has supplied plug-in vehicles to 10 additional partners for real-world testing:

• Alabama Power of Birmingham, Alabama, and its parent, Atlanta-based Southern Company
• American Electric Power of Columbus, Ohio
• Consolidated Edison of New York
• DTE Energy of Detroit, Michigan
• Hydro Quebec
• National Grid of Waltham, Massachusetts
• New York Power Authority
• New York State Energy and Research Development Authority
• Pepco Holdings
• Progress Energy of Raleigh, North Carolina

Electrification issues and our partnerships are discussed in more detail in the Electrification section.

Biofuels

Biofuel use is expanding globally, with bioethanol made from corn, beets or sugar cane substituting for gasoline, and biodiesel derived from plant oils substituting for diesel fuel. In the United States, 2007 legislation expanded the Renewable Fuel Standard (RFS), mandating a significant increase in the use of biofuels by 2022.

While current corn-based bioethanol production in the United States is estimated to provide a modest reduction in vehicle GHG emissions on a well-to-wheels basis, next-generation biofuels such as lignocellulosic bioethanol could offer up to a 90 percent GHG reduction benefit.2 Building a substantial fleet of flexible-fuel vehicles (FFVs) provides a bridge to the widespread use of lower-carbon biofuels in the future.

Ford has a long history of developing vehicles that run on renewable biofuels. We produced the first flexible-fuel vehicle approximately 100 years ago: a Model T capable of running on gasoline or ethanol. Globally, Ford offers 14 models in the United States, Europe, Asia and South America that can run on E85, a blend of up to 85 percent bioethanol mixed with gasoline. Ford has manufactured more than five million FFVs, including 2.5 million in the United States and nearly 2 million in Brazil.

In Europe, Ford is a market leader and pioneer in bioethanol-powered FFVs, with more than 70,000 vehicles delivered to customers since 2001. Ford FFV models are now available in 17 European markets, with Sweden, Germany, the Netherlands, Spain and France showing the strongest demand.

In the United States, we have committed to doubling the number of FFVs in our lineup by 2010. Assuming continuing incentives that encourage the manufacture, distribution and availability of renewable fuels and the production of FFVs, we stand ready to expand FFV output to 50 percent of total vehicle production by 2012.

Alternative fuels pose a classic chicken-and-egg problem – automakers can produce a range of products capable of running on fuels with varying carbon content, but the benefits are only realized if energy providers bring the fuels to market and consumers demand both the vehicle and the fuel.

In the long term, we believe that next-generation biofuels made from a variety of feedstocks, including agricultural wastes (particularly lignocellulosic material) will be an important part of the GHG emission-reduction equation and will help address concerns about current-generation biofuels, including the potential competition between food and fuel crops and the conversion of natural lands to fuel production. These issues are explored in more detail in the Sustainable Technologies and Alternative Fuels Plan.