The Ford Escape Hybrid and Mercury Mariner Hybrid are equipped with Ford’s first-generation transaxle, which Ford developed jointly with Aisin AW. Aisin also supplied Toyota with the transaxle for the first-generation Prius. Toyota is currently on its third-generation, developed in-house.

In 2008, the Ford Fusion Hybrid and Mercury Milan Hybrid will come equipped with Ford’s second-generation transaxle.

To grow our hybrid business, we have to be able to provide ourselves more flexibility. We have a good partner now on our current transaxle, but we need to control our own destiny. This is an investment in our future.

As hybrids grow to mainstream volumes in the United States, we need to develop a supply base here, too. We are taking the necessary steps to develop the technology, the intellectual expertise and the great products to make hybrid vehicles as commonplace as any other powertrain.

—Dr. Gerhard Schmidt, Ford vice president of Ford Research and Advanced Engineering

Ford is striving to improve the fuel efficiency and reducing the cost of the hybrid system with each new generation of transaxles.

The company has committed to increase hybrid production to approximately 250,000 unit annually by 2010. It currently produces approximately 24,000 hybrids annually.

Ford also announced that the Ford Escape Hybrid would debut this week as one of the first hybrid taxis carrying passengers throughout the five boroughs of New York City. Ford, the New York City Taxi & Limousine Commission and the Coalition for Smart Transportation will mark the milestone on Thursday.