Sustainability Report 2010/11 

# Impr **oving Fuel Economy**

 EcoBoostTM  Advanced Transmissions  Electric Power - Assisted Steering  Automatic Start/Stop  Weight Reductions  BMS  Aggressive Deceleration Fuel Shut - Off  Aerodynamics  Smaller Vehicles This section outlines our plans for improving the fuel econom y of traditional gas and diesel engines. These actions include imple menting advanced engine and transmission technologies, weight reductions and aerody namic improvements, as well as increasing the efficiency of vehicle sub - sy stems. **For more information about each of our fuel efficiency technologies please click on the icon**  **s in the graphic above.** 

## EcoBoostTM indicates stage completed 

## 2007 **Near Term Begin migration to**  **advanced technology** 

## 2011 **Mid Term Full implementation of**  **known technology** 

## 2020 **– 2030**  **Long term Continue leverage of hybrid**  **technologies and deployment of alternative energy sources**  Significant number of vehicles with EcoBoost engines EcoBoost engines available in nearl y all vehicle nameplates In crease percentage of internal combustion engines dependent on renewable fuels The centerpiece of our near - term fuel - econom y improvement efforts is the EcoBoost engine, which uses turbocharging and direct injection along with reduced displacement to deliver significant fuel - efficiency gains without sacrificing engine power or vehicle performance. EcoBoost engines help to improve vehicle fuel economy 10 to 20 percent and reduce carbon dioxide (CO 2 ) emissions up to 15 percent compared to larger - displacement engines. EcoBoost offers better value than man y other advanced fuel - efficiency t echnologies. Due to its affordability

relative to competing powertrain options, and its compatibility with most of the gas -powered vehicles we produce, we are able to migrate EcoBoost’s fuel - economy benefits throughout our product lineup more quickl y and t o a greater number of our customers. Our rapid deploy ment of EcoBoost in high volumes across a wide array of our vehicle nameplates is also helping us make a dramatic step forward in CO 2 emission reductions. EcoBoost was first introduced in North America a s a 3.5LV6 engine on the 2010 L incoln MKS, Lincoln MKT, Ford Taurus SHO and Ford Flex. This engine provides similar performance to a normally aspirated V8 engine, but with the fuel economy of a V6. Thanks largel y to EcoBoost technology , the V6 Ford Taurus SHO and Lincoln MKT deliver unsurpassed fuel econom y in their respective segments. EcoBoost has thus far proven to be a great success. For example, EcoBoost is influencing many consumers to consider and buy Ford vehicles who were not previously Ford custo mers. In other words, it is increasing Ford’s “conquest rate”

– i.e., the number of customers who are switching from other manufacturers to buy Ford vehicles. The Taurus SHO with EcoBoost now has the highest conquest rate in its segment, and the Flex EcoBo ost has a more than 65 percent conquest rate after two ye ars on sale. EcoBoost is proving especially attractive to 35 - to 55 - ye ar - old males, an important demographic that has been less likely to purchase Ford vehicles in the past. In addition to these comm ercial successes, the EcoBoost engine has received multiple awards, including the “Breakthrough” award from Popular Mechanics and a “10 Best Engines” award from Ward’s . We continue to expand the application of EcoBoost technology to more engine t ypes and vehicles. In 2010 and 2011, for example:

 We introduced the 3.5L V6 EcoBoost on the Ford F - 150. The F - 150 with EcoBoost is the most fuel - efficient pickup truck in its class, with a rating from the U.S. Environmental Prot ection Agency

of 16 mpg cit y and 22 mpg highway . 1 The new F - 150 also has best in - class torque, payload and towing capacity.  We also introduced a 2.0L EcoBoost engine, which is the first in the EcoBoost lineup to go trul y global. o In the U.S., we will be introducing the 2.0 L I - 4 EcoBoost on the 2012 Ford Edge and the all - new 2012 Ford Explorer and 2012 Ford Focus. These are the first four cylinder EcoBoost engines available in the U.S. The Edge and Explorer with the 2.0LI - 4 EcoBoost are expected to deliver best - in - class fuel economy , with the performance feel of a traditional V6. The Explorer will feature fu el economy at least 20 percent better than the current model. We are also introducing the first high - performance vehicle with an EcoBoost engine

– the Ford Focus ST, a special high - performance version of the Focus. o In Europe, we introduced the Ford S - MAX and Galaxy with a 2.0L EcoBoost option. o In China, we launched the 2.0LEcoBoost engine on the Ford Mondeo. o In 2011, we will introduce the 2.0L EcoBoost on the Mondeo followed b y the Falcon in 2012 in Australia. We debuted a 1.6L I - 4 EcoBoost on the 2011 Ford C - MAX in Europe. This engine is also

now available in the all - new Ford Focus European version, and we plan to offer it in the 2013 Ford C - MAX, which will be available in the U.S.  We revealed a 1.0L three - cylin der EcoBoost engine at the Paris Auto Show in 2010. This engine delivers the power of a 1.6L I - 4 with better fuel econom y. We plan to introduce it for use in Europe and other global markets. These EcoBoost engines illustrate Ford’s plans to use smaller- di splacement, power - boosted engines to deliver improved fuel economy and performance throughout our vehicle lineup. By 2013, Ford plans to offer EcoBoost engines on 85 to 90 percent of our North American and European nameplates and continue to migrate them t o our other regions. 1. The F - 150’s fuel efficiency is compared to other high - volume pickup trucks, not including low - volume special fuel - econom y models. 

## Advanced Transmissions indicates stage completed 

## 2007 **Near Term Begin migration to advanced**  **technology** 

## 2011 **Mid Term Full implementation of**  **known technology** 

## 2020 **– 2030**  **Long term Continue leverage of hybrid**  **technologies and deployment of alternative energy sources**  Dual - clutch and six - speed transmissions begin replacing four - and five - speeds Full implementation of six - speed transmissions To further improve the fuel econom y of our vehicles, we are implementing a dual - clutch transmission system called PowerShift. PowerShift combines manual and automatic transmission technologies to deliver the fuel efficiency of a manual with the driving ease of an automatic. It uses six speeds instead of the four or five on most automatics, which further increases fuel efficiency . PowerShift technology increases fuel efficiency

by up to 9 percent compared to traditional four - speed automatic transmissions, depending on the application. A “wet clutch” version of this technology has already

been implemented in Europe on the Ford Focus, C - MAX, Kuga, S - MAX, Galax y and Mondeo, in combination with a 2.0LDuratorq® T DCi diesel. The wet clutch version is also the standard transmission for the new 2.0L EcoBoostTM engine on the Ford Mondeo, S - MAX and Galax y. A “dry clutch” version was introduced in North America in April 2010 on the all - new Ford Fiesta and subsequently

on the new Ford Focus in November 2010. The dry clutch version gets even better gas mileage. Unlike wet clutch s ys tems, the dry PowerShift transmission does not usean oil pump, making the sy stem more efficient with the same weight as a traditional four - spee d

automatic transmission. We are also introducing conventional six - speed transmissions to replace less - efficient four - and five - speed transmissions in a range of vehicles, including the new Super Duty® with 6.2L and 6.7Lengines and all of the Ford Mustang , F - 150 and new Explorer powertrain options. Six speed transmissions improve fuel economy by up to 5 percent compared to ty pical four - and five - speed gearboxes; they also provide better acceleration, smoother shifting and a quieter driving experience. By

the end of 2012, 98 percent of Ford’s North American transmissions will be advanced six - speed gearboxes. And by 2013, we plan to offer advanced six - speed transmissions

– both PowerShift and conventional six - speed technology

– on 100 percent of our new, non - hy

brid vehicles in Europe and North America and many new vehicles in other regions. In the near term we are improving the performance of our PowerShift and conventional transmissions by

further optimizing their operation with EcoBoost engines and reducing parasitic losses, such as mechanical friction and unnecessary hydraulic and fluid pumping, to achieve higher operating efficiency . In the longer term we will be researching advanced transmission concepts to support further engine downsizing and electrification. 

## Electric Power **- Assisted Steering (EPAS)**  indicates stage completed 

## 2007 **Near Term Begin migration to**  **advanced technology** 

## 2011 **Mid Term Full implementation of**  **known technology** 

## 2020 **– 2030**  **Long term Continue leverage of hybrid technologies**  **and deployment of alternative energy** 

**sources** Electric power steering Full implementation of

electric power steering We are phasing in electric power - assisted steering technology , which t ypically will reduce fuel consumption and decrease carbon dioxide emissions by up to 3.5 percent over traditional hydraulic s ys tems, depending on the vehicle and powertrain application. On the 1.4LDuratorq® diesel Ford Fiesta, for example, which is available in Europe, EPAS provides a 3

–4 percent improvement in fuel efficiency compared with a hydraulic - based power steering s ys tem. By combining EPAS with aerody namic improvements, we impro ved the mileage of this vehicle b y approximately

8 percent compared to the previous model year. In addition, EPAS supports other fuel - saving activities we plan to introduce. For example, “automatic start/stop” technology can be introduced without degrading steering assist to the driver. (For details on this technology , see Automatic Start/Stop .) In 2010 and 2011, we added EPAS to the a ll - new Ford Explorer, Ford F - 150, Ford Mustang and Lincoln MKZ h yb rid in North America, as well as the new Ford C - MAX and Focus in NorthAmerica and Europe. This adds to our existing lineup of vehicles with EPAS

– the Ford Fusion,

Flex, Taurus and Escape and the L incoln MKS and MKT in North America, as well as the Ford Fiesta and Ka in Europe. Ultimately , we will introduce EPAS into all of our passenger cars and light - duty vehicles. 

## Automatic Start/Stop indicates stage completed 

## 2007 **Near Term Begin**  **migration to advanced technology**  

## 2011 **Mid Term Full implementation of**  **known technology** 

## 2020 **– 2030**  **Long term Continue leverage of hybrid technologies**  **and deployment of alternative energy**

**sources** Start/stop systems (micro h ybrids) In creased application of

start/stop sy stems We have developed a “start/stop” technology that shuts down the engine when the vehicle is stopped and automatically restarts it before the accelerator pedal is pressed to resume driving. This technology

maintains the same vehicle fun ctionality as a vehicle without the technology , but it improves city

driving fuel econom y b y up to 6 percent. The gain can be as high as 10 percent for some drivers, depending on vehicle size and usage. The technology can also reduce tailpipe emissions to zero while the vehicle is stationary, for example when waiting at a stoplight. Start/stop technology

includes sensors to monitor functions such as cabin temperature, power supply state and steering input, so that vehicle functioning remains exactly the sam e to the driver as when the engine remains on continuously . If the sy stem senses that a vehicle function has been reduced and will negativel y impact the driver’s experience, the engine will restart automatically . Start/stop technology

is already

being used in our hy

brid vehicles and will eventuall y provide a cost - effective way

to improve fuel efficiency on a large volume of non - hy brid vehicles. In the U.S., we are planning to introduce the technology into non - hy

brid vehicles in 2012. When it debuts in the U .S. it will be available on automatic transmission vehicles, including those with fuel - efficient six - speed automatic transmissions. In Europe, automatic start/stop is already standard on the Ford Ka and certain versions of the Mondeo, S - MAX and Galax y. It is launching in 2011 on the Ford Focus, C - MAX and Grand C - MAX. By 2016, 90 percent of our vehicle nameplates globall y will be available with start/stop technology.

## Weight Reductions

indicates stage completed 

## 2007 **Near Term Begin migration to**  **advanced technology**  

## 2011 **Mid Term Full implementation of**  **known technology** 

## 2020 **– 2030**  **Long term Continue leverage of hybrid technologies**  **and deployment of alternative energy**

**sources** In creased unibody applications Weight reductions of 250

–

750 lbs Continue weight reductions using advanced materials We are also working to improve fuel econom y b y decreasing the weight of our vehicles

– in particular b y increasing our use of unibody vehicle designs, lighter - weight components and lighter - weight materials. Unibody vehi cle designs reduce weight b y eliminating the need for the body- on - frame design used in truck - based products. Unibody - based crossover vehicles provide many of the benefits of truck - based SUVs, such as roominess, all - wheel drive and higher stance, with signi ficantl y reduced total vehicle weight. The all - new 2011 Ford Explorer uses a lightweight unibody design, as do the current Ford Edge and Lincoln MKX crossovers. EcoBoostTM engine technology allows us to use a smaller, lighter - weight engine s ys tem while deli vering more power and better fuel econom y. Similarly , the dual - clutch PowerShift sy stem weighs up to 30 pounds less than the four - speed automatic transmission it is replacing. The lighter - weight materials we are using include advanced high - strength steel, aluminum, magnesium, natural fibers and nano - based materials. These “lightweighting” efforts can reduce the weight of our vehicles by 250 to 750 pounds, without compromising vehicle size, safety, performance or customer - desired features. The following are examples of our use of lighter weight materials:

 The 2010 L incoln MKT crossover has an advanced lightweight magnesium and aluminum liftgate.  We use an aluminum hood on the Ford F - 150 and high - strength, lighter - weight steels in more than 50 percent of the F - 150 cab.  The 2011 Ford Explorer makes extensive use of high - strength steels. Nearly half of the vehicle’s structure

– including the A - pillars, rocker panels and front beams

– are comprised of high - strength steels, such as boron.  In the 2012 Ford Focus, more than 55 percent of the vehicle shell is made from high strength steel and more than 26 percent of the vehicle’s structure is formed from ultra high - strength boron steels. The Focus combines these high - strength steels with innovative manufacturing methods to further reduce weight. For example, the vehicle’s B - pillar reinforcement, a key structural part, is made from ultra - high - strength boron steelthat has been produced using an innovative tailor - rolling process. The process allows the

thickness of the steel sheet to be varied along its length, so the component has increased strength in the areas that are subjected to the greatest loads. The tailor - rolled B - pillar has eight different gauge thicknesses, to improve side - impact crash performance while savi ng more than three pounds per vehicle.  We are also expanding our use of aluminum engine parts and all - aluminum engines. The 2011 Mustang, for example, has an aluminum engine. Combined with other fuel efficiency improvements, this lighter - weight engine del ivers class - leading fuel econom y at 19 mpg city/ 30 mpg highway with a six - speed automatic transmission

– a 25 percent improvement over the 2010 model. Please see the Environment section for further information on materials - based weight reductions . 

## Battery Management Systems (BMS) indicates stage completed 

## 2007 **Near Term Begin migration to**  **advanced technology** 

## 2011 **Mid Term**  **Full implementation of known technology**  

## 2020 **– 2030**  **Long term Continue leverage of hybrid technologies**  **and deployment of alternative energy**

**sources** Introduction of battery management s ys tems Electrical s ys tems are another area in which we are making progress. By reducing vehicle electrical loads and increasing the efficiency of the vehicle’s electrical power generation sy stems, we can improve fuel efficiency . Our battery management s ys tems, fo r example, control the power suppl y s ys tem (in particular the alternator) to maximize the overall efficiency of the electrical sy stem and reduce its negative impacts on fuel econom y. This is accomplished b y maximizing electricity generation during the most fuel - efficient situations, such as vehicle deceleration. In less fuel - efficient situations, the alternator’s electricity generation is minimized to conserve fuel. BMS has already been launched in Europe on the Ford Focus and Mondeo and in the U.S. beginni ng with the 2011 Ford Edge, Explorer and F - 150, the 2011 L incoln MKX, and the 2012 Ford Focus. We have also introduced more - efficient alternators, which improve fuel econom y.

## Agressive Deceleration Fuel Shut **- Off** 

indicates stage completed 

## 2007 **Near Term Begin migration to**  **advanced technology** 

## 2011 **Mid Term Full implementation of**  **known technology** 

## 2020 **– 2030**  **Long term Continue leverage of hybrid technologies**  **and deployment of alternative energy**

**sources** Begin implementing ADFSO ADFSO at high volume We are deplo yi ng Aggressive Deceleration Fuel Shut - Off technology to improve fuel efficiency . ADFSO allows fuel supply to the engine to be shut off during vehicle deceleration and then automatically

restarted when needed for acceleration or when the vehicle’s spe ed approaches zero. This new sy stem builds on the Deceleration Fuel Shut - Off technology available in our existing vehicles by

extending the fuel shut - off feature to lower speeds and more ty pes of common driving conditions, without compromising driving perf ormance or non - carbon dioxide emission reductions. This improved fuel shut - off will increase fuel economy by an average of 1 percent. An additional benefit of the ADFSO technology is increased deceleration rates, which should extend brake life and improve speed control on undulating roads. Starting in 2008 this technology was implemented on the Ford Flex, F - 150, Expedition and Escape and the Lincoln MKS and Navigator. We are continuing to implement it as we bring out new vehicles. For example, the 2011 Ford Edge, Ford Explorer and L incoln MKX use ADFSO. The ADFSO technology

will be a standard feature in all of our North American vehicles by 2015, and we will continue to expand implementation globally . 

## Aerodynamics indicates stage completed 

## 2007 **Near Term Beg**  **in migration to advanced technology**  

## 2011 **Mid Term Full implementation of**  **known technology** 

## 2020 **– 2030**  **Long term Continue leverage of hybrid**  **technologies and deployment of alternative energy sources**  Aerodynamic improvements Additional aerodynamic improvementsWe are optimizing vehicle aerodyn amics to improve the fuel econom y of our global product

lineup. Using a s ys tems engineering approach that integrates aerody namics in an interdisciplinary

and collaborative design and development processes wi th other fuel - econom y technologies, we maximize the fuel efficiency of every vehicle we develop. During the development process, we use advanced computer simulations and optimization methods coupled with wind - tunnel testing to create vehicle designs that d eliver up to 5 percent better fuel econom y. In addition, we are developing simulation systems that allow us to replicate on - the road driving conditions during the virtual design phase, to further improve the real - world benefits of aerodynamic improvements. Using these approaches, we made significant improvements in aerodyn amics in 2010. For example:

 In North America, we improved the fuel efficiency of Ford’s midsize family sedans, including the 2010 Ford Fusion and Lincoln MKZ, b y reducing aerodynamic drag by 5 percent. We accomplished this by further streamlining the exterior design and lowering the vehicles’ ride height. These aerodynamic improvements were a key enabler for the Ford Fusion Hy

brid’s 41 mpg rating, which makes it the most fuel - efficient mids ize sedan available in North America. 1  We have also reduced the aerodyn amic drag of the 2010 Mustang b y 4 percent for the V6 model and 7 percent for the V8 model. These aerody namic improvements resulted in a 0.5 mpg and 1 mpg improvement in fuel econom y at 70 mph cruising speeds, for the V6 and V8 models respectively .  We improved the fuel economy of the 2011 Ford Edge and Lincoln MKX compared to the 2010 models in part through aerodyn amic improvements, including underbody shielding, tire spoilers and optimized grille openings that reduce excess airflow to the engine compartment, thus reducing drag. The 2011 Edge and MKX have best - in - class fuel econom y in their segments.  In the 2011 Ford Explorer, we improved fuel economy by almost 1 mpg at highway speeds b y coordinating the design of the front - mounted air dam and the rear roofmounted spoiler. For 2011, we are continuing to build on these improvements. For example, aerodynamic improvements helped the 2011 Ford Fiesta SFE achieve a U.S. Environmental Protection Agency - rated 40 mpg. Also in 2011, we introduced an “active grille shutter” technology that reduces aerodyn amic drag by up to 6 percent, thereby

increasing fuel economy and reducing carbon dioxide (CO 2 ) emissions. When fully closed, the reduction in drag means that the active grille shutte r can reduce CO 2 emissions by 2 percent. This technology was implemented first on our European vehicles; in the U.S. the 2012 Ford Focus is the first vehicle to use it. Through that technology

and other design improvements, we have significantly reduced th e drag coefficient on the all - new 2012 Focus four - door to 0.297 from the current model’s 0.320. Optimized aerodynamics also helps reduce wind noise in the Focus. 1. Midsize sedan segment based on the R.L. Polk segment definition.

## Smaller Vehicles

indicates stage completed 

## 2007 **Near Term Begin migration to**  **advanced technology** 

## 2011 **Mid Term Full implementation of known** 

**technology** 

## 2020 **– 2030**  **Long term Continue leverage of hybrid**  **technologies and deployment of alternative energy sources**  Introduction of additional small vehicles Engine displacement reductions

facilitated b y weight savings Smaller vehicles provide consumers with another way to get better fuel economy . We are launching more small cars to provide more fuel - efficient options. For example:

 We are introducing subcompact vehicles commonly referred to as “B - cars.” These include the all - new Ford Fiesta, which was introduced in Europe in 2008, the Asia Pacific region in 2009 and the Americas in 2010.  We are introducing a wide range of new vehicl es in the U.S. and other markets based on our global “C - platform,” or compact sedan. At the 2011 North American Auto Show we showcased 10 new vehicles based on this C - platform, most of which will be available in the U.S. in the next few years. In 2011 we are introducing the next - generation global Ford Focus to North America. This vehicle includes the first in a series of powertrain technology

developments that will give our C - car segment offerings a combination of power, performance and unsurpassed fuel eco nomy . For example, the Focus will be equipped with a responsive, fuel - efficient, 2.0LI - 4 engine with twin independent variable camshaft timing and direct injection, plus a dual - clutch PowerShift transmission. We will also offer a battery

electric version called the Focus Electric. In addition, we are introducing the Ford C - MAX in the U.S., a multi - activity vehicle based on our C platform. This vehicle will also ultimately include a hy

brid and plug - in hy

brid version.  We brought the European Transit Connect small commercial van to North America. This vehicle fills an unmet need in the U.S. market b y offering the large cargo space that small business owners need in a fuel - efficient, maneuverable, durable and flexible vehicle package. We also loaded these sma ller vehicles with features and options commonly found on larger or luxury vehicles to make them attractive, thus encouraging customers to choose more fuel efficient cars and trucks. All of these smaller vehicles illustrate Ford’s actions to provide consum ers with a wider range of fuel - efficient options, as well as our efforts to leverage the best of our global products to offer new choices to customers in all of our regions worldwide.