Future Powertrains Global Opportunities & Challenges

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

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

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

4. C02, Fuel Economy and Energy Independence are public and political issues worldwide. However, regional differences exist and drive different technology solutions. Europe • Currently a split Gas/Diesel market • High fuel tax and climate focus continue to drive EU further toward diesel North America • Currently a Gas market • Energy security and fuel efficiency goals drive diesels and HEV’s 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 H2 solutions sooner then rest of world

5. Diesels offer ~25% CO2 benefit versus gasoline engines

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

7. Lower Emissions 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 0.20 0.18 0.16 0.14 0.12 0.10 PM, g/mi 0.08 Bin 10 Euro 3 PC 0.06 0.04 Euro 4 PC 0.02 Japan (~2006MY) 0.00 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 NOx, g/mi LEV/Bin 5

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. Diesel Engine Gas Engine Alternative Fuel Engines Advanced Gas Engines Advanced Diesel Engines HEV H2-ICE Fuel Cell H2 Technology Solutions

10. Advanced Diesel Engine Current Gasoline Engine Renewable Diesel Engine Infrastructure Changes Carbon Sequestration Renewable Fuels (H2 or Bio-Fuels) Diesel Engine Hybrid Tailpipe NOx Emissions Advanced Gasoline Engine Renewable Gasoline Engine Gasoline Engine Hybrid Powertrain Technology Limit Renewable H2 Fuel Cell H2 (NG) Fuel Cell Well to Wheels CO2 (g/km) With conventionally derived fuels, air quality differentiates powertrain options more than CO2. New infrastructures are required to reach zero CO2

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

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

13. The Ford Escape Hybrid offers: • 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 technologywhile 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 rightchoice for the environment No Boundaries …Room, Range, Performance and Green – The Smart Choice!

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

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

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

17. 2000 Ford Focus FCV CGH2 2001 Mazda Premacy Methanol 2002 FCEV Hybrid CGH2 2000 Ford Focus FC5 Methanol 1999 P2000 HFC CGH2 2003 Fuel Cell Vehicle Ford Fuel Cell Vehicles

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

19. 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 R&D Targets for Fuel Cell Technology

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 H2, or other fuels • Ford continues to advance Powertrain Technology on all fronts