Company agrees to enhance validation tests on future vehicles under EPA oversight

Ford lowers mpg estimates on 6 models after internal audit

Company agrees to enhance validation tests on future vehicles under EPA oversight

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Editor’s note: An earlier version of this story said, incorrectly, that Ford officials do not expect to be fined by the EPA after revising mpg ratings on 6 models. Ford officials said they have not been fined and that any penalties will be determined by the EPA.

WASHINGTON -- Ford Motor Co., admitting that it made a mistake in calculating fuel economy estimates for several car models, including hybrids, will revise the mpg ratings downward and repay owners for the added fuel costs.

It is the second time in a year that Ford has had to relabel vehicle mpg ratings and underscores the intense pressure on automakers -- from the EPA and customers alike -- to make sure that mpg labels reflect real-world fuel economy.

Affected models are the Fiesta subcompact; the hybrid and plug-in hybrid versions of the mid-sized Fusion; the hybrid and plug-in hybrid versions of the C-Max hatchback; and the Lincoln MKZ Hybrid.

Most of the changes are between 1 and 5 mpg but the MKZ Hybrid’s city and highway estimates will be reduced 7 mpg, from 45 mpg combined to 38 mpg.

The changes cover 2013 and 2014 hybrid and plug-in hybrid vehicles, and most 2014 Fiestas. Ford estimates that approximately 200,000 of the vehicles have been sold or leased in the United States.

Ford’s payments to affected customers range from $125 up to $1,050, depending on model and whether a customer leased or purchased the vehicle. The company would not estimate the total cost of the reimbursement program.

“As you know, fuel economy is very important to our customers and to us,” Raj Nair, group vice president for global product development at Ford, told journalists today. “This was our mistake, plain and simple, and we apologize to our customers for it.”

The revised mpg estimates are a setback for Ford, which has made fuel economy a key selling point. Last summer Ford agreed to lower the fuel economy rating on the C-Max Hybrid 8.5 percent to 43 mpg combined after the EPA questioned Ford’s reliance on testing data for the more aerodynamic Fusion hybrid.

It was allowed under the EPA’s testing rules, but the agency is now revising them.

“This might spur EPA to be more directive and restrictive in how its fuel economy rules and ratings are administered,” Kelley Blue Book analyst Jack Nerad said. “At the very least we expect tighter auditing of the process.”

Ford and the EPA said the company initiated the relabeling campaign after an internal audit revealed problems with its estimates.

Ford has agreed to “enhanced validation tests” for future vehicles under EPA oversight -- the same level of scrutiny that Hyundai and Kia’s estimates have faced since 2012. That year the Korean brands put new fuel economy labels on many of their models, affecting about 900,000 cars sold in the United States, after the EPA found systematic errors in their testing data.

“This issue highlights the need for continued strong oversight of the fuel economy labeling program,” Chris Grundler, director of the EPA’s Office of Transportation and Air Quality, said today. “Consumers need to trust that fuel economy window stickers are giving consumers reliable and fair estimates of real world fuel economy.”

Ford has not been fined by the EPA. The company noted that it promptly reported the problem to the EPA after discovering it. But penalties are still possible.

In an interview, Grundler said the agency has opened an investigation into Ford’s overstated fuel economy estimates.

“We’re going to continue to look into the underlying root causes,” he said. “It’s too soon for me to reach any conclusions.”

Nair said Ford’s errors stemmed from the “coast-down” test in which a car glides to a stop from highway speeds. The test is crucial when calculating fuel economy in a laboratory because it measures forces such as aerodynamics and rolling resistance that do not come into play when a stationary car spins its wheels on a dynamometer.

Ford has started doing its coast-down tests with a computer simulation rather than on a track, using wind tunnel tests to calculate the aerodynamics of its cars.

Nair said Ford’s engineers made an error in plugging these wind tunnel results into the coast-down formula -- which led to a more optimistic projection of real-world fuel economy when the company did its dynamometer tests.

“It was a breakdown in our process,” Nair told Automotive News. “We’ve corrected this specific error.”

He said Ford first noticed the disparity in October. In March, after further testing, the company brought the issue to the attention of the EPA.

Grundler said Ford and the EPA jointly conducted coast-down tests in April and May at Ford’s proving grounds in Arizona, after which the affected models were retested on a dynamometer at the EPA’s testing laboratory in Ann Arbor, Mich.

Ford’s errors came as a surprise to the EPA, Grundler said. The agency has been auditing coast-down tests for several years, but in its five tests of Ford models, the agency saw no indication of problems.

“All of those results confirmed the reported results from Ford,” Grundler said. “So this was a surprise to us.”

Behind the changes in Ford's mpg estimates

You can reach Gabe Nelson at gnelson@crain.com.

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