1. 1 Future Powertrains Global Opportunities & Challenges Sue Cischke Vice President of Environmental & Safety Engineering January 14, 2004

2. 2 Overview Powertrain Drivers Powertrain Technology Solutions Ford’s Powertrain Technology Development

3. 3 Powertrain Drivers Climate Change Fuel Economy Emissions Customer Satisfaction

4. 4 C02, Fuel Economy and Energy Independence are public and political issues worldwide. However, regional differences exist and drive different technology solutions. North America Currently a Gas market Energy security and fuel efficiency goals drive diesels and HEV’s Europe Currently a split Gas/Diesel market High fuel tax and climate focus continue to drive EU further toward diesel Japan Currently a Gas market but with growing HEV penetration High fuel tax, emissions (smog) and climate focus drive HEV development in Japan today Energy dependencies may drive to H 2 solutions sooner then rest of world

5. 5 Diesels offer ~25% CO 2 benefit versus gasoline engines

6. 6 Emissions regulations continue to drive technology advancement. Differences in standards worldwide result in different solutions. Gasoline Challenges: Emissions Regulations LEV/ Bin 5 ULEV SULEV EU III EU IV Tier 1 NOx, g/mi HC, g/mi Lower Emissions

7. 7 NOx and Particulate emissions are driving future diesel technologies. New technologies will add significant cost and result in attribute trade-off risks. Diesel Challenges: Emissions Standards 0.00 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18 0.20 00.10.20.30.40.50.60.70.80.91 NOx, g/mi PM, g/mi LEV/Bin 5 Bin 10 Euro 4 PC Euro 3 PC Japan (~2006MY) Lower Emissions

8. 8 Customers increasingly demand a variety of attributes from their Powertrains Performance feel Quietness Quality and reliability Fuel economy and range Towing performance Affordability

9. 9 HEV Fuel Cell Advanced Gas Engines Gas Engine Diesel Engine Advanced Diesel Engines H 2 -ICE H2H2 Alternative Fuel Engines Technology Solutions

10. 10 Well to Wheels CO 2 (g/km) Tailpipe NOx Emissions Renewable H 2 Fuel Cell H 2 (NG) Fuel Cell Renewabl e Gasoline Engine Infrastructure Changes Carbon Sequestration Renewable Fuels (H 2 or Bio-Fuels) Current Gasoline Engine Gasoline Engine Hybrid Advance d Diesel Engine Advanced Gasoline Engine Diesel Engine Hybrid Renewabl e Diesel Engine Powertrain Technology Limit With conventionally derived fuels, air quality differentiates powertrain options more than CO 2. New infrastructures are required to reach zero CO 2

11. 11 Traditional powertrains will be increasingly supplemented by one or more advanced alternatives. No single global technology solution has yet emerged. Consequently, Ford, and other manufacturers, continue to develop all of these Powertrain Technologies Near TermMid TermLong Term Specific Benefit Deployment Timeframe Deployment Development Advanced Gasoline Hybrid Powertrain Diesel Today Fuel Cell Hydrogen I.C.E.

12. 12 Ford Motor Company‘s Powertrain Technology Development Advanced Gasoline Engines Advanced Diesel Engines Hybrid Electric Vehicles Hydrogen Internal Combustion Engines Fuel Cell Electric Vehicles

13. 13 Acceleration performance similar to a V-6 Significant improvement in FE vs. V-6 Cleaner vehicle, meeting SULEV tailpipe emissions standard All the advantages of hybrid technology while maintaining all of the benefits of the base Escape, including interior roominess and versatility Confidence of authentic Ford SUV A superior value that is the right choice for the environment No Boundaries … Room, Range, Performance and Green – The Smart Choice! The Ford Escape Hybrid offers:

14. 14 Hydrogen: The Long-Term Fuel Solution? Hydrogen comes with new decisions and challenges. Hydrogen: The Long-Term Fuel Solution? Hydrogen comes with new decisions and challenges. Production Storage On-Board Storage On-Board Infrastructure Powertrain Fuel Cell vs. ICE Powertrain Fuel Cell vs. ICE

15. 15 Infrastructure: Must Be A Cooperative Effort OEMs Energy Providers Government

16. 16 H2 ICE Engine H2 ICE Hybrid (H2RV) Fuel Cell Vehicle Fuel Cell Demo Fleet H2 Research Vehicle (H2RV) Next Gen Fuel Cell Vehicle H2ICE Demo Fleet Fuel Cell Demo Fleet H2 Research Vehicle (H2RV) Next Gen Fuel Cell Vehicle H2ICE Demo Fleet Ford is Preparing for a H2 Economy

17. 17 Ford Fuel Cell Vehicles 1999 P2000 HFC CGH 2 1999 P2000 HFC CGH 2 2000 Ford Focus FC5 Methanol 2000 Ford Focus FC5 Methanol 2000 Ford Focus FCV CGH 2 2000 Ford Focus FCV CGH 2 2001 Mazda Premacy Methanol 2001 Mazda Premacy Methanol 2002 FCEV Hybrid CGH 2 2002 FCEV Hybrid CGH 2 2003 Fuel Cell Vehicle

18. 18 What Is Ford Motor Company Doing to Address the Challenges of Fuel Cells? Core Fuel Cell Technology Development Alliance with Daimler-Chrysler and Ballard Integration of Core Technology into Vehicle Programs Vehicle Programs Demonstrations Low Volume Production Programs Partnerships with Government Agencies Core Fuel Cell Technology Development Alliance with Daimler-Chrysler and Ballard Integration of Core Technology into Vehicle Programs Vehicle Programs Demonstrations Low Volume Production Programs Partnerships with Government Agencies

19. 19 R&D Targets for Fuel Cell Technology Improvement of Fuel Cell  Cost Reduction  Power Density Increase  Mass Production  Durability Meet System Demands  Cold Start Operation at High and Low Temps  Durability  Insensitivity to Air Impurities  Vehicle Range  Hydrogen Storage

20. 20 Summary Selecting a single “winning” Powertrain Technology solution for all markets and time frames is not possible. As technologies become more complex, manufacturers are challenged with affordably developing all options Our industry should continue to work with governments and energy suppliers worldwide to develop the infrastructures for making and delivering renewable H 2, or other fuels Ford continues to advance Powertrain Technology on all fronts