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Electrifying New England

October 2010

Ford Motor Company

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Sustainable Mobility

William Clay Ford 2nd

“Improved sustainable performance is not just a requirement, but a tremendous business opportunity.”

- Bill Ford

Our vision for the 21st century is to provide SUSTAINABLE transportation that is affordable in every sense of the word:

Environmentally, Socially & Economically

From Our Executive Chairman…

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Environmental Sustainability Goals

• Reduce Emissions, including CO2

• Eliminate Toxins• Improve Air Quality• Conserve Water• Increase Use of Renewable Resources• Increase Recyclability• Increase Recycled Content• Reduce Waste to Landfills• Improve Energy Diversity• Transparency in Reporting

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Sustainability Strategy – Technology Migration

Near Term

Begin migration to advanced technology

Mid Term

Full implementation of known technology

Long TermContinue leverage of Hybrid technologies and deployment of alternative energy sources

Near TermNear Term

• Significant number of vehicles with EcoBoost engines

• Electric power steering 70 – 80%

• Dual clutch and 6 speed transmissions replacing 4 and 5 speeds

• Increase Hybrid applications

• Increased unibody applications

• Introduction of additional small vehicles

• Battery management systems 75%

• Aero improvement up to 5%

Mid TermMid Term

• EcoBoost engines available in nearly all vehicles

• Electric power steering 100%

• Six speed transmissions 100%

• Weight reduction of 250 – 750 lbs

• Engine displacement reduction aligned with weight save

• Additional Aero improvements up to 5%

• Increased use of Hybrids

• Introduction of PHEV and BEV

• Diesel use as market demands

Long TermLong Term

• Percentage of internal combustion dependent on renewable fuels

• Volume expansion of Hybrid technologies

• Continued leverage of PHEV, BEV

• Clean electric / hydrogen fuels

2007 2011 2020 2030

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Fusion/Milan

Escape

Announced Ford Electrification Projects:

Key is Leverage of High Volume Global Platforms

BEVBattery Electric

Vehicles

2012 CY 2018+ CY

Transit Connect(Global C-Platform)

PHEVPlug-in Hybrid

Electric Vehicles

Focus(Global C-Platform)

2010 CY

Global Platform

HEVHybrid Electric

Vehicles

2004 CY

Global C-PlatformNext Generation HEV

Global CD-PlatformNext Generation HEV

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PRODUCTION PLATFORM NOT YET ANNOUNCED EARLY/DEVELOPMENT WORK WAS DONE ON THE ESCAPE

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Cost-competitive technology Ownership (purchase and operation) costs as

low as or better than gasoline vehicles Infrastructure

Public, private, business, retail recharging infrastructure

Vehicle to grid integration Incentives and education – federal and local

The key to success will be partnerships.

What will it take to Commercialize Electric Vehicles?

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The Key is Partnerships

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Ford, DOE, EPRI and Utility Partners

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Today’s Ford Escape Plug-in Project

Formed in 2007

Unique partnership between automotive and utility sectors to accelerate the commercialization of PHEVs

Project goals: Creation of New Business

Models Development of open

architectures, standards and specifications

Create Customer Demand based on realistic expectations

Diversifies transportation energy supply

Two industries connected by a common fuel … driving our transportation and energy

future…

Formed in 2007

Unique partnership between automotive and utility sectors to accelerate the commercialization of PHEVs

Project goals: Creation of New Business

Models Development of open

architectures, standards and specifications

Create Customer Demand based on realistic expectations

Diversifies transportation energy supply

Two industries connected by a common fuel … driving our transportation and energy

future…

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Affordable Technology - Batteries

Largely due to the battery, plug in electric vehicles are considerably more expensive than comparable ICE vehicles.

Efforts are underway to address battery costs Pre-competitive industry research through the US

Automotive Battery Consortium (USABC). Significant federal funding to establish domestic

manufacturing and supply chain. Creating the demand for Lithium-ion batteries in

stationary applications could make battery electric vehicles more competitive: New: economies of scale will reduce initial

purchase price Used: residual value will improve the financing

opportunities

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Infrastructure

Charging Customer Segments

Main charge spot located in garage or driveway of residence.

Main charge location is work – allowing urban commuters/street parkers to have reliable charge. Also allows extended range for home chargers.

For fleets customers, main charge location is fleet depot where multiple chargers could be installed.

For occasional trips, municipal charge locations could be viable option. If reservation system is implemented, could be used for main charge location.

Most FrequentLess Frequent

Charging Infrastructure is a key enabler to BEV’s – regardless of where the consumers end up charging their vehicles.

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Key Elements of the EV Infrastructure

Smart vehicle to grid integration is necessary to minimize the impact of plug-in vehicles on the grid and to achieve charging efficiencies Time of use (load leveling) Renewables (charge when the wind is blowing)

Consistent communication protocols are necessary National solution

Open architecture Ability to charge anywhere, anytime?

Bi-directional communication is necessary, bi-directional powerflow is not.

Faster charging will be a key enabler of broader adoption (ie., <15 minutes).

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Incentives and Education

Closing the cost gap between plug-in vehicles and traditional technology will require additional incentivization – Federal, state, and local. Need to motivate purchases to drive toward economies of

scale Non-fiscal incentives can be effective (eg., preferential

parking, HOV lanes, etc.)

Consumer Education is critical to create rational expectations Impact of temperature and accessories

on range Charging impacts on battery life and

condition Charging requirements – home, work,

and public.

This is not infrastructure

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• In the early 1900’s more than 27 companies were building electric cars

• In 1914, Henry Ford and Thomas Edison experimented with an electric car using by Edison Batteries

• In 1915 the Ward Motor Vehicle Company offered an electric wagon for $875 on an 1yr installment plan for the vehicle and a $10.50/month rental fee for the Edison Storage battery

Electrification of vehicles:Electrification of vehicles:

not a new idea …..not a new idea …..

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Most Important Reason for Purchasing Electric Drive Vehicles is

Fuel Savings

The Main Reasons for Purchasing a BEV, PHEV, or HEV

0%

10%

20%

30%

40%

50%

60%

70%

80%

1st 2nd 3rd 4th 5th 6th 7th

Reason (1st: most important; 7th: least important)

Pe

rce

nta

ge o

f re

spon

den

ts Fuel cost saving Energy security Making a statement New technology

Energy independence Air quality concern Climate change

Source: 2009 Ford / University of Michigan Consumer Survey

Over 70% of respondents indicated that fuel cost savings were the main reason for purchasing a BEV, PHEV or HEV.

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Commercial Challenges

Willingness to Pay Extra for a PHEV if Cutting Fuel Costs in Half

0% 5% 10% 15% 20% 25% 30% 35%

$0

< $1000

$1,000 to $2,000

$2,000 to $3,000

$3,000 to $5,000

$5,000 to $7,000

$7,000 to $10,000

Will

ingn

ess

to p

ay (

$)

Percentage

Small carM/L carCUV/SSUVPickup

Source: 2009 Ford / University of Michigan Consumer Survey

Over 65% of customers would only be willing to pay up to $3,000to reduce fuel costs in half – a price that is comparable to today’s

incremental cost for an HEV.

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Conclusions Electric vehicles – in many shapes and flavors – are coming; we

need to make sure the market is ready for them. We need to focus on our common customer, working together to

ensure they are comfortable with the new technology. It has to be easy: access to infrastructure where they need it,

and where they want it Good communication about rates and options. An understanding of what EV technologies are: PHEV, EREV,

BEV, HEV Ability to pick the best technology for their needs and personal

goals. Foreknowledge of future charging needs. Streamlined permitting processes.

Moving forward we need to continue working together: To get costs down, Car companies and utilities need to work together to identify

potential hot-spots – clustered demand that may cause infrastructure challenges.

We all need to work together to provide the education and outreach to educate the market.