Public Citizen Exposes Ford’s Flex-Fuel Farce

Oct. 12, 2006

Public Citizen Exposes Ford’s Flex-Fuel Farce

Letters Alert NHTSA and FTC That Company’s Alternative Fuel Vehicles Do Not Qualify for Fuel Economy Standards Loophole

WASHINGTON, D.C. – Public Citizen and a Nebraska corn farmer today demanded the federal government take action on Ford Motor Co.’s misleading claims about vehicles that are supposed to operate on ethanol-based fuel in addition to gasoline — misleading claims that have allowed the automaker to avoid as much as $135 million in fines for failing to comply with federal fuel economy standards.

In a letter to the National Highway Traffic Safety Administration (NHTSA), Public Citizen President Joan Claybrook alerted the agency that several of Ford’s Flexible Fuel Vehicle models (FFV) do not qualify for credits against the agency’s Corporate Average Fuel Economy (CAFE) standards. Claybrook called upon the agency to impose fines for failing to comply with CAFE – fines that the automaker has escaped because of the FFVs.

Under the NHTSA fuel credit loophole, manufacturers are allotted credits for FFVs under an assumption that the vehicles use gasoline 50 percent of the time and E-85 (a blend of 85 percent ethanol and 15 percent gasoline) the other 50 percent. In reality, that doesn’t happen.

Simultaneously, in a letter to the Federal Trade Commission (FTC), Claybrook asked the agency to sanction Ford for deceptive advertising and require the company to correct its current ads for its entire FFV fleet.

Ford claims that its model years 2003 to 2005 Taurus and Mercury Sable FFVs qualify for credits toward its fuel economy compliance standards by operating on alternative fuels and gasoline, and advertises them as “hassle-free and environmentally sound driving.” Public Citizen asserts that Ford is misleading the public in its advertising because E-85 is not widely available and, more importantly, its Taurus vehicles do not operate properly with the fuel.

The vast majority of FFVs never use a drop of ethanol because of the scarce distribution of E-85. Of the 176,000 gas stations in the country, only 907 sold E-85 as of Oct. 10. The automobile industry is aware of this discrepancy but sells tens of thousands of FFVs in markets where few or no E-85 fueling stations are available to the public in order to manipulate the CAFE credit loophole. In particular, Ford advertises FFVs in nine states that have zero fuel stations that sell E-85 and in an additional 12 states that contain five or fewer E-85 fuel stations. Ford even has a contract with the state of Louisiana for Taurus FFVs even though there is not a single E-85 station in the state.

Compounding the problem, Ford has received numerous complaints from customers that the Taurus and Sable are unable to operate properly on E-85. Ford’s initial response was to raise questions about the reliability of the fuel source and to urge drivers to switch to gasoline to improve the operation of the vehicle, negating the purpose of the flex-fuel program. Ford has still been unable to fix the operational defect for the Taurus FFVs over the three model years. 

The result is that Ford received four years of CAFE credits that it did not earn for model years 2003-2005 Taurus and Sable FFVs. Despite the lack of E-85 fuel stations and the models’ operational problems using the alternative fuel, Ford continues to market the 2006 Taurus FFV and will likely claim spurious credits for these model year vehicles as well.

“Ford is misleading consumers into thinking they are buying efficient and environmentally friendly cars, while taking advantage of a perverse system that rewards car makers for building vehicles that do just the opposite,” Claybrook said. “Ford’s flex-fuel vehicle is grossly misnamed; it isn’t flexible and doesn’t run on alternative fuel.”

Because of the loophole, manufacturers rake in greater profits at the expense of consumers and the environment. Between model years 2003 and 2005, Ford received CAFE credits for FFVs for approximately 228,000 Taurus and Sable FFVs, avoiding as much as $135 million in fines for not meeting actual fuel economy standards. In 2003, Ford was credited with 43 miles per gallon (mpg) for more than 90,000 of these vehicles, even though their performance is 26 mpg, less than the federal minimum standard of 27.5 mpg for passenger cars.

Public Citizen has long warned NHTSA that the effect of the FFV loophole is to lower the average fuel economy of the overall vehicle fleet, but this marks the first time that the advocacy group has filed a complaint with the agency on this subject. In 1977 as NHTSA administrator, Claybrook issued the first fuel economy standards for passenger cars for the early 1980s, and they have remained stagnant ever since.

“Requiring Ford to forfeit the sham CAFE credits it never earned will also send a message to other manufacturers that they should concentrate on giving consumers real choices rather than trying to cheat a faulty system,” said Robert Shull, Public Citizen’s deputy director for auto safety and regulatory policy. “In this time of rising oil prices, instability in the Middle East and warming global temperatures, it is simply irresponsible to do anything else.”

Public Citizen was alerted to the Taurus defect by David Buss, a corn farmer from Hastings, Neb., who purchased a Ford vehicle marketed as a flex-fuel vehicle. He also has filed complaints with the FTC and the Nebraska Attorney General, and he has sent Ford a letter demanding a refund for his vehicle. To read all the complaints, click here.

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