Ford's Sustainable Technologies and Alternative Fuels Plan

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In the very early years of our industry, automotive engineers experimented with a variety of methods for powering vehicles, including electricity and biofuels. The internal combustion engine using petroleum-based gas and diesel rose to the top fairly quickly and has been the standard vehicle power source for the past hundred years or so. Reminiscent of those early years in the industry, we are now in a period of intense experimentation and adoption of new vehicle technologies and fuels. This time, however, there may be no single winner in the race for the vehicle of the future.

Ford is taking a portfolio approach to developing sustainable technologies and alternative fuel options. Our goals are to diversify the fuels our vehicles can use and to improve their energy efficiency and long-term sustainability. Traditional gasoline- and diesel-powered vehicles based on internal combustion engines will continue to be part of the mix for quite some time. That is why we are working to improve the fuel efficiency of the engines and transmissions of our current vehicles, along with every vehicle subsystem. In fact, in the next two years, we will be implementing 30 new powertrains that will improve the fuel efficiency of internal combustion engines and transmissions, as well as continuing to improve vehicle aerodynamics and reduce weight.

In addition, a variety of alternative powertrain technologies and alternative fuels are currently under development. At this point, we do not see a single clear winner. Rather, we believe a wide range of options will be needed to serve different kinds of consumers and different markets, depending on the regional availability of fuels and other factors. For example, biofuels may make sense for consumers in the Midwestern United States and much of South America – where biofuels are widely available – while battery electric vehicles and plug-in hybrids may make sense for urban drivers across the globe who have access to recharging opportunities. Other alternative fuels like compressed natural gas (CNG) and propane or liquid petroleum gas (LPG) may be most appropriate for fleet users who have access to central refueling infrastructure and who have well-defined driving patterns. As refueling infrastructure for these alternative fuels becomes more widespread, these vehicles will be attractive to more and more of our customers.

To prepare for this more complex future for vehicle technologies and fuels, we are developing a range of energy-efficient, alternative fuel and advanced powertrain technologies.

Most importantly, we are developing global vehicle platforms that are compatible with a wide range of fuels and powertrain technologies. This will allow us to offer a portfolio of options to our customers, target options to regions where they make the most sense, and evolve our vehicles as technologies and markets develop. Global platforms that have "plug-and-play" compatibility with a wide range of technologies will also allow us to make the range of fuel and powertrain options available more affordably.

For example, at present we produce 14 flexible-fuel vehicle models across our global markets that can run on either regular gas or E85 (a blend of 85 percent ethanol and 15 percent gasoline). Though biofuels are not available in every market, they are widely available in the Midwestern United States and throughout South America, so it makes sense for us to provide this option to customers who can take advantage of it. In addition, biofuel availability is expected to increase in Europe, as the EU's renewable energy directive mandates that 10 percent of energy in the transportation sector come from renewable fuels by 2020. Ford's flexible-fuel vehicles, which are provided at no or low additional cost, allow consumers to choose fuels based on availability and price.

We are also making CNG- and LPG-ready engines available on select vehicle models, enabling their conversion to run on one of those fuels. And, we are working with qualified vehicle modifiers to ensure that conversion to those fuels meets our quality, reliability and durability requirements. For example, we recently announced that the new Transit Connect, which went on sale in the United States in early 2010, is available with a CNG/LPG conversion-ready engine package. Our F-Series trucks and E-Series vans are also available with a propane-ready engine. In Europe, we recently introduced a Ford Mondeo that can run on regular gasoline, E85 ethanol or LPG.

CNG and LPG are good options for fleet customers, such as taxi companies and delivery services, that use a central refueling system. In addition, CNG and LPG are widely available as vehicle fuels throughout South America and Europe. We are delivering CNG/LPG-ready engines to provide another lower-carbon option to those customers for whom this option makes sense.

We are also developing a range of electrification technologies, including hybrid electric vehicles, battery electric vehicles and plug-in hybrid vehicles. Battery electric and plug-in hybrid vehicles may initially make the most sense for urban drivers and fleet users who have daily commutes under 40 miles. However, as battery and recharging options continue to advance, we expect these vehicles to work for a wider range of our customers. In the longer term, we are working on vehicles that can run on hydrogen fuel cells, as these fuels become available and commercially viable.

This section describes our current actions and future plans to develop a wide range of energy-efficient technologies, alternative fuels and advanced powertrain technologies that will give our customers near-, mid- and longer-term options for more sustainable vehicles.