Ford Offers Fix After Hybrid Mileage Comes Up Short

Ford Motor Co. (F) is offering free software upgrades to owners of its 2013 model-year hybrid vehicles intended to improve fuel economy after the models fell short of projected mileage levels.

Ford is sending notices about the voluntary upgrades to owners of the C-Max, Fusion and Lincoln MKZ hybrids, Group Vice President Raj Nair, the company’s product-development chief, told reporters yesterday in Dearborn, Michigan. He declined to estimate how much the program will cost Ford.

The upgrades are designed to boost mileage in real-world driving conditions such as those simulated by Consumer Reports magazine. In those 2012 tests, the Fusion and C-Max hybrids earned 17 percent to 21 percent less than Ford’s promise of 47 miles (76 kilometers) per gallon. The Fusion achieved 39 mpg and the C-Max averaged 37 mpg in combined city and highway driving in the magazine’s test.

The software fix is “definitely the right thing to do,” said Ed Kim, industry analyst for AutoPacific Inc. in Tustin, California. Ford’s hybrids were “absolutely developed and calibrated to provide a strong EPA number,” he said, referring to U.S. Environmental Protection Agency mileage ratings. “The real-world performance was found not to be as good as that.” Ford used the 47 mpg EPA rating in its marketing.

Toyota Motor Corp. (7203)’s Prius averaged 44 mpg in Consumer Reports’ test, 12 percent less than the EPA’s combined rating of 50 mpg for the car, which is smaller than the mid-size Fusion.

Chief Executive Officer Alan Mulally has made fuel economy a cornerstone since taking the helm of the Dearborn-based automaker in 2006. Environmental rules in the U.S., Europe and Japan have pushed carmakers to offer more vehicles that don’t emit climate-warming gases and consume less fuel.

‘Increased Variability’

After Consumer Reports disclosed the results of its testing, Ford said in December that driving styles and conditions affect real-world mileage of hybrid vehicles.

“I think all hybrids have experienced increased variability” with their fuel economy, Nair told reporters yesterday. “This will help that.”

Nair said the software fix is “just like you get upgrades on your cellphone or on your apps.”

The Ford program affects about 77,000 vehicles and the fix can be performed at Ford dealerships, Nair said. Improvements include raising the maximum pure electric speed to 85 miles per hour from 62 mph and shortening engine warm-up time, he said.

Ford’s hybrid and plug-in versions of the Fusion sedan and C-Max wagon boosted its U.S. first-half electric-drive deliveries to 46,197, more than five times its year-earlier volume.

Ford rose 1.1 percent to $16.78 at the close in New York. The shares have gained 30 percent this year, compared with an 18 percent increase for the Standard & Poor’s 500 Index.

To contact the reporter on this story: Megan Durisin in Dearborn, Michigan at mdurisin@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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