“we expect lower tariff costs of about $1 billion, reflecting a full year's worth of credit expansion.”

In context

“her diversify and lower our cost of funding over time. So let me turn to our 2026 outlook. For the full year, we expect company adjusted EBIT of $8 billion to $10 billion, adjusted free cash flow of $5 billion to $6 billion, and capital expenditures of $9.5 billion to $10.5 billion. As we shift capital to higher return growth opportunities across our portfolio, including roughly $1.5 billion for Ford Energy. Our full-year outlook for the industry assumes a U.S. SAAR of 16 million to 16.5 million in flat industry pricing. Excluding Novelis, tailwinds and headwinds for Ford include positive market factors, including favorable mix associated with the sunset of low margin nameplates, and benefits from changes in the U.S. regulatory environment. Flat cost, which I would like to unpack further, we expect lower tariff costs of about $1 billion, reflecting a full year's worth of credit expansion. We also expect further material and warranty cost reductions building off our momentum in 2025. These combined savings allow us to absorb about $1 billion higher commodity prices driven by inflation, and pressure on DRAM as well as incremental investment in support of our UEB platform, the ramp of Ford Energy, and cycle plan actions that will drive higher return growth in 2027 and beyond. Additionally, we expect our high margin, software and physical services profit to grow by about 6.5%. Now let me frame Novelis for you. We expect year-over-year improvement of about $1 billion, which is back half weighted. This includes 1.5 to $2 billion of temporary costs, including tariffs, to ensure continuity in aluminum supply. These costs are not expected to be repeated in 2027. From a calendarizat”