Ford Motor Company (F)

“The accomplishments this quarter reinforce our trajectory. The investments we are making in our truck lineup, UEV platform, Ford Energy, and high-margin services will bolster our margins over time, keeping us firmly on the path to our 8% EBIT margin target by 2029.”

“We are confident in the pricing power of our Pro business and although early, 2027 model year customer contracting in North America is off to a fast start, placing us about a month ahead of where we were last year.”

“We remain confident in our net $1 billion EBIT improvement, heavily weighted to the second half of the year.”

“F-Series remains the number one truck brand, outselling the closest competitor by more than 80 thousand units in the first half of this year and is on track for 50 straight years at the top.”

“If you look at the first half from a Pro EBIT perspective, $3.4 billion; second half, if you follow our guidance, $3.6 billion to $4.1 billion and that is largely driven by the additional capacity that we have in the Super Duty space.”

“We expect to make up our postponed Super Duty fleet orders in H2 that were primarily explained by the impact of Novelis. So we expect to end the year with our full recovery to Pro's 2025 revenue run rate and then Super Duty availability being aligned with demand.”

“We could absolutely see this business — the integrated services business — being a half point of margin for the company.”

“As Jim mentioned, we really focus on paid subscriptions and we are over 900 thousand for Pro, that is over 20% year-over-year growth, and we expect to continue to see that grow through the balance of the year.”

“So we do see continued improvement on a year-over-year basis. I will be very clear about that on warranty as well as material cost, and that is what comprises the $1 billion year-over-year improvement that we are looking to see.”

“So you had roughly $2.5 billion on the top line; $1.5 billion due to Novelis cost now lower than what we had originally thought before — we thought $1.5 to $2 billion but now it is tracking at the lower end.”

“Bottom line, to answer the question, we expect that level of product mix and series mix to continue through the balance of the year.”

“So I would say we are in the third inning of selling out the 2028 capacity of 20 gigawatt-hours.”

“For U.S. industry pricing, we now expect full year to be about a half a point higher at plus 50 basis points.”

“Our guidance continues to assume a U.S. SAR of 16 million to 16.5 million units, commodity headwinds of just above $2 billion, and we remain on track to deliver $1 billion in material and warranty cost reductions in 2026, enabling our increased investments in UEV and Ford Energy.”

“And for Ford Credit, EBT is now expected to be above $2.5 billion.”

“an improvement in Model e losses to about $4 billion”

“a narrowing of Ford Pro's EBIT range to $7 billion to $7.5 billion”

“For our full year segment outlook, we now expect an increase in Ford Blue's EBIT range to $5 billion to $5.5 billion, a narrowing of Ford Pro's EBIT range to $7 billion to $7.5 billion, an improvement in Model e losses to about $4 billion.”

“Capital expenditures remain unchanged at $9.5 billion to $10.5 billion as we invest in higher-return growth opportunities.”

“An increase in adjusted free cash flow to $6 billion to $7 billion now includes flow-through of this higher EBIT and our expectation to receive in 2026 about $500 million of the $1.3 billion reimbursement we booked in Q1.”

“For the full year, we now expect company adjusted EBIT of $10 billion to $11 billion, narrowing the range and increasing the midpoint by $1 billion.”

“As such, we expect to improve Gen 1 EBIT by approximately 40% year over year in 2026, paving the way for our investments in UEV and Ford Energy.”

“This resiliency positions Pro to benefit from second half volume recovery.”

“U.S. inventory of 52 retail days' supply is slightly below our target of 55 to 65 days, and we expect to return to targeted levels as the recovery progresses.”

“Year to date, we have incurred about $800 million in Novelis-related temporary costs and now expect a full year cost impact of about $1.5 billion.”

“We expect the vast majority of the remaining cash charges related to our December announcement, which total up to $2 billion, to be completed by the end of the year.”

“By late next year, we expect to reach 20 gigawatt-hours of annual capacity for Ford Energy, and we have potential to expand beyond that.”

“These businesses have significant room to grow and are central to our 8% margin target by 2029.”

“Customer deliveries will begin next year.”

“The Oakville expansion I referred to earlier is on track to launch in the fourth quarter of this year, adding up to 100 thousand units of additional Super Duty capacity.”

“We plan to extend our hybrids across our entire lineup over the next several years.”

“We are also raising and narrowing our full year adjusted EBIT guidance to between $10 billion and $11 billion, a $1 billion raise at the midpoint.”

“We are still expecting the hot mill to restart in May.”

“We're confident on our launch plan. In fact, we're right on track to share our plans with dealers and take customer orders later this year.”

“So on the Novelis recovery and the rebuild of the mill, I would say the confidence is high. As Jim and I stated earlier, the restart date is on track.”

“As you know, we are committed to over 20 gigawatt hours of capacity starting in the fourth quarter of next year.”

“When you look at the margins of the part business and the software business, this $15 billion that will be growing at 8% a year is highly profitable for the company.”

“As Jim mentioned, we're on track for $1 billion improvement in material costs and warranty reductions on top of the $1.5 billion of cost reductions we delivered in 2025.”

“We're on track to deliver another over $1 billion in material and warranty cost improvements this year, and we will never stop.”

“By the end of the decade, 90% of our global nameplates will offer electrified powertrains, including advanced hybrids, extended range electric vehicles and full EVs.”

“It also includes the launch of our universal EV platform in 2027 from our Louisville assembly plant in Kentucky.”

“Between now and '29, we will refresh 80% of our North America portfolio and 70% of our global portfolio by volume.”

“By 2030, almost all of our global volume will feature next-generation electric architectures and in-house software.”

“Accordingly, we're raising our full year adjusted EBIT guidance to between $8.5 billion and $10.5 billion.”

“We continue with respect to Novelis to expect a total cost of between $1.5 billion to $2 billion.”

“We do expect this to reverse. We do expect our free cash flow guidance to stay at $5 billion to $6 billion.”

“The forward forecast that we gave you does -- the guidance we gave you assumes that they stay where they are, which, as you would know, the forward curves are up.”

“We continue to expect a net $1 billion improvement from the Novelis recovery.”

“The impact of ongoing tariffs is unchanged at about $1 billion and is now a part of our run rate costs.”

“We now expect commodity headwinds of just above $2 billion, about $1 billion higher than our previous estimate, largely due to higher aluminum pricing driven by global supply constraints.”

“And for Ford Blue, we have increased our guidance by $500 million to $4.5 billion to $5 billion, driven by a stronger underlying business.”

“Our full year segment outlook stays steady with Ford Pro EBIT of $6.5 billion to $7.5 billion, Model e losses of $4 billion to $4.5 billion, Ford Credit EBT of about $2.5 billion.”

“For the full year, we now expect company adjusted EBIT of $8.5 billion to $10.5 billion, adjusted free cash flow of $5 billion to $6 billion and capital expenditures of $9.5 billion to $10.5 billion, which reflects our shift toward higher return growth opportunities, including $1.5 billion for Ford Energy this year.”

“As a result, we expect first quarter to be the strongest quarter for Model e this year.”

“On a full year basis, we expect timing differences and working capital to be favorable.”

“Third, relative to U.S. inventory, we expect to remain within our target of 55 to 65 retail days supply for the year.”

“This is net of $1.5 billion to $2 billion of onetime incremental costs to secure alternatively sourced aluminum until the Novelis facility is operating at full throughput later this year.”

“We still expect a $1 billion improvement in EBIT year-over-year weighted towards the second half.”

“We expect to grow that $15 billion nearly 8% annually through the end of the decade.”

“We have contingency plan to secure sufficient supply for various scenarios no matter where we end up with the start date.”

“We will be on the lower end of our F-150s for the first half of the year as we rebuild in the second half of the year.”

“From a calendarization perspective, we expect our first quarter EBIT to be roughly flat sequentially.”

“But firmly believe that we're closing that gap quite rapidly.”

“We're planning to increase by about 50 to 60 this year. Is the plan.”

“We expect in '26 to remain within our targeted levels. Of the 55 to 65 retail-based supply for the year.”

“Yeah. Thank you. I think you can expect steady improvement throughout the time period as the UEV products come on board '27 and then get even more profitable in '28 and beyond, with additional variants that's gonna improve the profit margin as will the introduction of B vehicles in Europe that also will be coming on board as well.”

“So the goal is to set up the company over the next couple years to be that 8% margin company, and that's the kind of capital we need to invest.”

“So what I would say is that roughly 75% of our capital over the plan period is going into a higher return, larger truck and multi-energy portfolio in that balance 25%, is your Ford energy and continued modeling investments.”

“So guidance reflects an increase in capital spending of a little more than $1 billion, as you noted.”

“With respect to the positive market factors, yes, it does include the sunset of low margin nameplates, namely Escape, but there's also benefits that we expect to achieve from changes in the U.S. regulatory environment, and the biggest impact there would be about a half $1 billion less of credits in the U.S.”

“Cash expenditures are expected to be up to about $5.5 billion, with most of this weighted in 2026.”

“In 2026 and 2027, we expect to record about $7 billion in charges related to our updated EV strategy and the expected disposition of our BOSC investment.”

“Lastly, Ford Credit's EBT will be about $2.5 billion.”

“We continue to target Model E reaching breakeven in 2029.”

“These savings will be partially offset by around $600 million in higher Gen two costs as we near the launch of LFP batteries in Marshall, Michigan, and our UAV platform in Kentucky, along with roughly $400 million in startup costs for Ford Energy.”

“This reflects about $1.6 billion of improvement in Gen one products driven by lower U.S. volume and cost savings from restructuring the business.”

“We expect losses of $4 billion to $4.5 billion for Ford Model e.”

“While Pro's underlying business continues to strengthen, we expect 2026 results to be dampened by the near-term impact in Novelis, ramping Oakville to bolster Super Duty capacity in Canada, and a tougher regulatory climate in Europe.”

“In North America, we expect continued share growth in an industry that's roughly flat, enabled by conquest sales and a diversified channel mix”

“Our segment outlook anticipates another robust year at Ford Pro, with EBIT of $6.5 billion to $7.5 billion.”

“These costs are not expected to be repeated in 2027.”

“This includes 1.5 to $2 billion of temporary costs, including tariffs, to ensure continuity in aluminum supply.”

“We expect year-over-year improvement of about $1 billion, which is back half weighted.”

“Additionally, we expect our high margin, software and physical services profit to grow by about 6.5%.”

“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.”

“We also expect further material and warranty cost reductions building off our momentum in 2025.”

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

“including roughly $1.5 billion for Ford Energy.”

“and capital expenditures of $9.5 billion to $10.5 billion.”

“adjusted free cash flow of $5 billion to $6 billion”

“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.”

“We are also targeting another $1 billion of industrial cost improvements.”

“We also expect year-over-year profit improvements driven by richer Ford Blue mix, Ford Pro growth, and reduced Model e losses.”

“We also expect to achieve the seventh straight year as America's number one auto producer”

“The takeaway from my perspective is we closed last year a much stronger business with a solid foundation to achieve our target of 8% adjusted EBIT target by 2029.”

“We believe we have enough stock to insulate us from the impact of Novelis in the fourth quarter given where we started the quarter.”

“On cost, we delivered another quarter of year-over-year improvement and are on track for a net $1 billion improvement this year, excluding the impact of tariffs.”

“We are on track for best-in-class performance across 6 nameplates with 3 more nameplates in the top quartile.”

“We'll begin installing equipment in Louisville for the UEV later this year, and we are on track to start production of our LFP cells at Marshall, Michigan plant later this year.”

“Our full year outlook also assumes U.S. industry SAAR of about 16.8 million units, U.S. industry pricing of about 0.5%, a net cost improvement of $1 billion, excluding the impact of tariffs; and lastly, capital expenditures of about $9 billion.”

“We also expect an adjusted free cash flow headwind of $2 billion to $3 billion in the fourth quarter.”

“And since the peak recall period is in years 3 to 5, we expect a meaningful improvement soon.”

“We continue to increase our overall services as a percent of EBIT. Just a couple of years ago, we were around 13%, and we are now well on our way to hit our 20% total EBIT.”

“First, we have line of sight to recover at least $1 billion related to Novelis.”

“So basically, what's going to be left is you're going to be left with the -- with auto parts tariffs that don't have offset steel and aluminum, in particular, and that's going to be both the tariffs of steel and aluminum as well as any of the pricing impacts that come through and then any of the vehicle import tariffs that are not offset by the U.S. content offset that we're allowed.”

“But next year, we expect the total cost coverage plus FSAs to also go down.”

“So through those actions, we expect to make up roughly 50,000 of those 100,000 units in 2026.”

“Additionally, UAV platform spending will continue to increase as we ramp our Marshall LFP battery plant and change over to the Louisville assembly plant ahead of the 2027 launch.”

“And for cost, we plan to deliver another $1 billion of cost improvements across our industrial system, which will be redeployed to strategic accretive ICE and hybrid cycle plan actions.”

“For compliance, the evolving global emissions landscape is expected to eliminate 2026 compliance headwinds, thereby unlocking opportunities to optimize our mix of ICE, hybrids and EVs and reduce reliance on credits.”

“For tariffs, we expect a net full year impact similar to 2025.”

“Between 2025 and 2026, we expect Novelis to be a headwind of $1 billion or less.”

“We are focused on the areas driving expected profitable growth such as our UAV platform launching in 2027.”

“As we look at 2026, even with our net recovery, we forecast being down roughly another 6% to about 520,000 units of gross stock, a disciplined approach yet still leaving us headroom to look for more market opportunities.”

“We are adding up to 1,000 new jobs to increase F-Series production to recover lost volume and fulfill strong customer demand.”

“Just that we have purchase obligations about $2.5 billion, and we think a lot of that may go away with Q4.”

“We feel confident about Pro demand in the second half supported by policy changes that should drive a recovery in small business activity.”

“Well, we would have some of our material cost items are coming in, in the second half. Also a lot of the work that we put into place on warranty, working with the dealers, working on our time to repair, a lot of these things are also looking to be implemented in the back half as well.”

“It seems to have stabilized actually. So we're actually optimistic around that holding for the rest of the year, but it was mostly in the van segment.”

“We're we've expensed about $200 million thus far. And I think you could think about that being a reasonable quarterly rate going forward, so not significant.”

“but our stock positions are in good shape as we look at the second half of the market. The industry where it is strong is in segments we do well in -- and so we think we'll be able to carry that into the second half of the year.”

“In the world of pricing around that, we expect a share sets net pricing around flat full year.”

“We do believe we will be able to carry that performance into the second half.”

“capital expenditures of about $9 billion.”

“As the quality of our vehicles improves, the cost of coverage per vehicle should come down.”

“We are still targeting to deliver a net improvement of $1 billion this year, excluding the impact of tariffs.”

“Over the past 12 months, aftermarket, which includes parts and software and services, contributed 17% of Pro's EBIT, closing in on that 20% target for next year.”

“The most material for Ford in the end is going to be changing our mix. We have high demand for our Pro and larger SUVs right now. We have high demand for some of our non-electrified powertrains and changing that mix is a multibillion-dollar opportunity in the next couple of years.”

“As I said, multibillion dollar opportunity over the next couple of years.”

“We are changing our mix towards the fourth quarter of this year, and we see a pretty big opportunity next year.”

“We're really focused on sustainable improvement in warranty and material costs that will make its way into 2026 and beyond.”

“A significant driver of these savings is material cost improvement actions, which will also flow through into 2026.”

“We're proud of the progress, and we expect our warranty costs to decline in the years ahead.”

“but we have a lot of opportunities to simplify especially parts tariffs and reduce that liability considerably, which would be upside for the company.”

“We do not plan on making any adjustments to lowering the production, the vehicles in doing very well right now.”

“We're on-track to deliver greater than 10% improvement in repairs per 1000, both for zero months in service and three months in service for 25 vehicles.”

“Our industrial platform continues to deliver progress against our targets and we remain on track to deliver $1 billion in net cost reductions this year, excluding the impact of changes in tariff policy.”

“There is a CapEx impact, we do have some product, some equipment that we've already ordered that's going to be coming in from overseas and we do think that we will have an impact on our CapEx as a result.”

“So as I said in my prepared remarks, we do think that this is going to be the best quarter of the year for Model e.”

“We are tracking towards an increase in the software and services as a percent of EBIT by end of the year.”

“And this will actually enhance our integrated services software revenue and profitability, this move.”

“In fact, we're targeting our next-generation products to be cheaper than our current outgoing products and a big factor of that is FNV3 versus FNV4.”

“And our net adverse EBIT impact is estimated at about $1.5 billion for the full year 2025 and that includes about $1 billion of offsetting recovery actions.”

“It's a very large reduction in the first quarter and we're planning another reduction in Q2 again. So, we'll be right where we want. Our dealer days' supply for our sales will be right in that mid-50,000 range, which is exactly where we want to be as a company.”

“Early input metrics provide us confidence in our 2025 cost reduction target.”

“We're not guiding on Credit's distribution at this time, but I think it's fair to say that we're expecting equal or greater than what we've had in the past.”

“You will see that the free cash flow that we are guiding for this year is going to be right in line with the 50% to 60%, which is our target.”

“We want to grow that to 20%.”

“I really like our plan going in for the first half to get our dealer supply inventories back down below 60 days.”

“While continued industry pricing pressure remains, we plan to materially increase our global volume, driven by the full year impact of European launches, and we significantly increased investment in our battery facilities and next-generation products, which are just two years away.”

“We expect a more normalized adjusted EBIT in the second quarter with a plan to hit our underlying EBIT level in the second half as cost improvements tied to lower material costs start to accrue to the bottom-line.”

“And we expect the majority of these savings to occur in the second half of the year.”

“For Ford, we expect this will be partially offset by top-line growth from upcoming launches.”

“For the full year, we expect company adjusted EBIT of $7 billion to $8.5 billion, adjusted free cash flow of $3.5 billion to $4.5 billion, and capital expenditures of $8 billion to $9 billion.”

“We expect the company's adjusted EBIT of $7 billion to $8.5 billion range.”

“So, costs we think is going to be largely neutral, maybe slightly better.”

“And we expect that with this activity that's happening in the factories where it's impacting Super Duty, Navigator, Expedition, that may come down a bit more as well.”

“We believe we'll be through that by the end of the quarter, but that is hitting Ford Blue and that's what's pulling Ford Blue down now from a standpoint versus what we guided at Q2.”

“To be specific on the cost, we really expect next year and the following years, a lot of progress in the production tax credit for our first-gen products.”

“Our products are brand new in Europe. So that's a good thing, and that'll help us next year.”

“We are seeing some top-line pricing pressure with the '25 model year vehicles as we expected, but we're still continuing to move forward, and it's not something that we're concerned about at this point based on what we're seeing so far with the '25 model years.”

“And lastly, Ford Credit's EBT will be about $1.6 billion, a double-digit growth year-over-year.”

“And for Ford Blue, we now expect EBIT of $5 billion, reflecting a balanced market equation and higher product, manufacturing and warranty costs, partially offset by cost efficiencies.”

“An expected loss of about $5 billion for Model e, which is the positive end of our guidance range, driven by over $1 billion in cost improvements that were partially offset by continued pricing pressure and investments in our new vehicle platforms.”

“We now expect EBITDA of about $9 billion with an improved market equation, including continued pricing strength on core products.”

“For Ford, we expect this to be partly offset by top-line growth from the launch of our new products.”

“We continue to expect adjusted free cash flow of $7.5 billion to $8.5 billion, with CapEx between $8 billion to $8.5 billion.”

“We are also on track to deliver $2 billion of cost efficiencies within our industrial platform, offsetting expected higher labor and product refresh costs for the year.”

“Since then, our product portfolio has exceeded our expectations, delivering favorable market factors, including mix through the first nine months of the year, and we expect this trend to continue in the fourth quarter.”

“Hybrid sales up 30% in the quarter continue to shine and our global hybrid mix is still on pace to approach 9% by year-end, up over 2 points year-over-year with more products on the way.”

“Our team is focused on delivering further cost reductions, optimizing the Gen-1 market equation, and driving capital efficiencies, helping to improve our profit look -- outlook as we head into 2025.”

“We target to return 40% to 50% of adjusted free cash flow to shareholders annually, and including today's announcement, have paid out over $10 billion to shareholders since the beginning of 2022.”

“Next year, we expect to improve the trajectory of Model e's business through cost, scaling, and we're not trading wooden nickels inside the company for emissions credits.”

“And that will drive a lot of cost down for our existing products. And you'll see that come to fruition starting in mid-next year and all the way through 2027.”

“We're already on our second generation of electric vehicles. They'll be launching in the next couple of years.”

“We think that will grow to about 20% by 2026.”

“All improvements to warranty will take time to reduce our warranty expense, maybe up to 18 months, but we're moving the needle on all the inputs.”

“We have been forecasting that we expect as we move into the '25 model year that there will be some of the top line coming off.”

“We're expecting auction values to continue to decline in the second half of this year, and we're also expecting our return rates to increase as well in line with that.”

“As expected, losses in the range of $5 billion to $5.5 billion for Model e, driven by continued pricing pressure and investments in new vehicles.”

“Our segment outlook anticipates continued Ford Pro strength, and we are increasing our EBIT range to $9 billion to $10 billion, reflecting further growth and favorable mix, partially offset by moderated pricing.”

“We are keeping our CapEx target range of $8 billion to $9 billion and are focused on delivering at the low end.”

“As I referenced earlier, we continue to expect full year company adjusted EBIT in the range of $10 billion to $12 billion.”

“We're on track to deliver our full year guidance, and we are generating stronger and more consistent cash flow than just a few years ago, evidence that our Ford+ plan is working.”

“We remain on track to deliver $2 billion of material, manufacturing and freight efficiencies over the full year, which will partially offset higher labor and product refresh costs.”

“We expect technology-related warranty costs to now normalize, as technology matures and we deploy that great OTA capability to address known issues.”

“Our launch in initial quality are leading indicators for warranty in the future and we expect to see benefits in the future.”

“Growth will be led by Elite base, the largest and most capable of the service base for Pro, which will more than quadruple this year to 1,300.”

“We are on track this year to reach 27,000 commercial service base by the end of this year. That is up 20% year-over-year.”

“We will expand these vehicle controls to speed control and acceleration limits in the near term.”

“We are targeting $1 billion of revenue next year for our software.”

“Our integrated service revenue is now on track for double-digit growth this year.”

“The global hybrid portfolio at Ford is on track to grow 40% this year across nine nameplates.”

“Ford Pro business is amazing. It's a high-margin business tracking towards $70 billion in revenue this year with further opportunities for profitable growth outside of vehicle sales, parts and service and software.”

“We are confident we can reduce the losses and sustain a profitable business in the future with everything we've known.”

“Pro is on track for software and physical services to contribute 20% of our EBIT by 2026.”

“We believe that we can be profitable at $25,000 to $30,000 so it's a huge opportunity for Ford.”

“we're confident on the $2 billion this year, but mostly timed towards the second half.”

“We're on track to deliver the $2 billion of cost reductions we talked about at the beginning of the year of raw manufacturing costs, material costs as well as freight and overhead. And so you'll start to see that really gain traction as we move through the second half of the year.”

“We're tightening our CapEx range to $8 billion to $9 billion as the team adjusts to the dynamic EV landscape.”

“we continue to expect full year company adjusted EBIT of $10 billion to $12 billion and are tracking toward the high end of this range, and that would be a record for Ford.”

“we're on track to deliver $2 billion of cost efficiencies for the full year.”

“We'll do everything it takes to be profitable in the first 12 months of our vehicles.”

“Yes. We expect high single-digit growth in the Model e, primarily with the launch of the Explorer, as Jim mentioned, in Europe.”

“I think the most important thing strategically is to get to new chemistries that have a lot less expensive materials in them. And we see that right around the corner at Ford.”

“You'll see, as you look at the data, that our average transaction prices are going up and our incentive spend is coming down because of the '24 year mix.”

“We're going to be doing quite a bit of fleetail business this quarter as well as looking at locking in pricing for some of our large corporate fleets later in the year.”

“We'll pay out the 40%, 50% of free cash flow.”

“we expect Ford Credit's EBT to be about $1.5 billion, up slightly year-over-year.”

“for Ford Blue, EBIT of $7 billion to $7.5 billion, reflecting a balanced market equation and also cost efficiencies offsetting higher labor and product costs.”

“As expected, a loss in the range of [$5 billion to $5 billion] (ph) for Model e, driven by continued pricing pressure and investments in new vehicles”

“There's no change to our segment outlook, which anticipates continued strength in Ford Pro, leading to EBIT of $8 billion to $9 billion, and that's driven by the continued growth and favorable mix, partially offset by moderated pricing.”

“We expect this to be partially offset by top line growth from the launch of our new products.”

“We're scrutinizing every dollar and driving efficiencies that we believe could land us at the lower end of this revised CapEx range.”

“Our growth in the first quarter in hybrids is a good example. We grew 36%, we think the full year would be 40%, we're now approaching 400,000 units of volume for our hybrid business.”

“We expect every one of our EVs to make money in the first 12 months.”

“That should put us in the middle of the pack.”

“You can expect, as I mentioned several times, that our new affordable platform will be used for most of our volume in their next cycle of product.”

“roughly 13% of Ford Pro's EBIT came from software and physical services, on the glide path to reaching 20% in a few years.”

“it may, like quarter one, it may mean that in some quarter ends, we may have some company stock and [plants] to make sure that we do the right thing on quality. So our earnings may be a little bit lumpy.”

“if the pricing stabilizes and we don't see these significant reductions continuing across the industry, then I think that you could probably start to see some of those cost reductions flow to the bottom line.”

“Will it be more than 40% growth? It could be. And I think we have flexibility.”

“On the Pro side, absolutely, our EV sales will grow not only because we're seeing more interest because the cost of ownership is advantageous for some, but we're also expanding in Europe quite a bit our electric offering with our two Transit vans coming online.”

“But for the next couple of years, we're in a really good spot because the shovels are in the ground or about to get in the ground.”

“And that will mean that we'll get to mid to high single-digit EBIT profit margins over their life cycle, and that's going to deliver profits above Model e's cost of capital.”

“Our next Gen 2 products will be profitable in the first 12 months of their launch.”

“That is the largest improvement in the similar quality that we saw last time in 2016. It's the best in a long time and we are committing to a similar improvement this year.”

“But as you know, the way that works, there's a lag. and this year, we expect to see $2 billion of efficiencies flow through.”

“I would say that from a warranty standpoint, costs are probably going to be about flat this year.”

“We are going to expect to see improving gross margin quarter-over-quarter over the course of the year.”

“So we expect to see substantial unit volume growth.”

“We expect growth in sales on the retail side as well.”

“From a pricing perspective, we're planning to see about a 2% decline, negative pricing.”

“What I think you should see from a calendarization standpoint on the cost for 2024 is that you'll see, as Kumar said, a lot of these are the design actions we've been working to identify in 2023 that have built up this cadre of actions we call the hopper. And those will start coming through on the model year turnover.”

“So these are the kinds of very robust ideas we have in the hopper, along with less inflationary claims, along with a stable supply chain that's going to help us close that gap that John mentioned and save $2 billion this year.”

“We also expect costs to be flat as we offset higher labor and product cost with efficiencies.”

“Ford Blue, EBIT to be about equal to last year at $7 billion to $7.5 billion, reflecting a balanced market equation, including the impact of our all-new F-150.”

“We expect our first-generation vehicles to improve their profits throughout the year.”

“With continued strong demand for our leading products, we are targeting EBIT between $8 billion to $9 billion, driven by continued growth and favorable mix, partially offset by moderated pricing.”

“We expect this to be partially offset by top line growth from the launch of our new products.”

“As we continue to adjust to market dynamics, we are scrutinizing every dollar and will continue to drive efficiencies, targeting to land at the lower end of our CapEx range.”

“We expect EVs to be about 40% of the total, and this reflects products already in flight, including investments in EV powertrain supporting our next generation of products in our LFP battery plant here in Michigan.”

“And that's supported by two things: getting to 60% mix on our connected vehicles and a threefold increase in our attach rates for those paid subscriptions that I mentioned, which are only at about 12% today.”

“In two years, we expect software and services to drive 20% of the Pro EBIT.”

“Our global hybrid sales were up 20% last year and we expect them to be up 40% this year.”

“Yes. So I think it's clear, given the dynamics in the marketplace and the way the top line come down significantly since we had put that out there that the 8% is not on in the 2026 time period.”

“We have billions of dollars of opportunity next year, but we have to deliver and release the parts, and I’m very confident that Kumar’s new organization will be able to really get after the part of the iceberg that’s below the water.”

“I think Europe Pro is going to continue to be performing at a high level as we move forward here.”

“We believe we have more than $1 billion of ideas already in the hopper for this year, for 2024. And we got to deliver it on those ideas.”

“Given the dynamic EV environment, we are being judicious about our production and adjusting future capacity to better match market demand.”

“We expect to extend its lead next year when we introduce our refreshed 2024 F-150 with more advanced technologies.”

“Fleet orders, for example, for the 2024 Super Duty are coming in faster than last year’s orders, and we expect strong demand to continue as more customers recognize what Ford has to offer in total.”

“But LFP is definitely going to be part of our future EVs, and that is a very important cost-reduction step in our path for the Gen 2 vehicles.”

“And the team is pushing hard to get every save that we can through there to build out our Gen 2 vehicles that are profitable and deliver ultimately the 8% target that we’ve set for them.”

“So, I think what you’re going to find is, over time, that premium is going to reduce as we move forward.”

“While our Gen 2 EVs were targeting to deliver an EBIT margin comparable to ICE by 2026, the dynamic changes in the market, pricing, adoption rates, regulations are forcing us to further reduce the cost of our EVs.”

“The F-150 now, a hybrid, is up 40% year over year, and we think the new F-150 new hybrid will be 20% mix, and it may be the best-selling hybrid in the United States.”

“I would add pace of new product introductions for Ford will only accelerate from here.”

“we see that going through the second half, primarily around warranty, and that's with the costs that we're seeing come through the dealers”

“we do have planned in the second half as we continue to increase volumes in Blue that we will see some pricing pressure there”

“And Ford Credit EBT is anticipated to be about $1.3 billion.”

“We also expect Ford Pro's EBIT to approach $8 billion with a significant year-over-year improvement driven by pricing and volume, including the benefit from the alley.”

“The Model E to report an EBIT loss of around $4.5 billion, largely reflecting the present pricing environment, disciplined investment in new products and capacity and other costs.”

“We expect higher volumes and stronger mix and more than offset any potential pricing headwind.”

“We now expect Ford Blue to deliver full year EBIT of about $8 billion.”

“capital expenditures between $8 billion and $9 billion”

“we now expect full year total company adjusted EBIT of $11 billion to $12 billion, primarily reflecting stronger net pricing in Ford Pro and Ford Blue with adjusted free cash flow of $6.5 billion to $7 billion and capital expenditures between $8 billion and $9 billion.”

“Given the rapid and dynamic gain on the pricing environment, we no longer expect to see contribution margin breakeven for our Gen 1 products this year.”

“we will continue to shift more investment to fuel Ford Pro's growth and press our advantage with full flexibility between EV and ICE”

“We expect our pricing and revenue to continue in the second half as we have new launches at Mustang.”

“we believe demand for our internal combustion and our hybrid portfolio will be durable with the window of growth in Ford Blue potentially longer and richer than most expected”

“we are now targeting to reach 600,000 annual production units of EVs by next year”

“we are raising our estimated EBIT guidance this year to $11 billion to $12 billion”

“So we're not walking away from the 8% in '26, and we're going to continue to work on that.”

“Rod, it's John. So we're not walking away from the 8% run rate in 2026. We've got several years to work that.”

“we're confident in our ability to deliver through a more efficient product design, cost efficiencies and growth in software and services, which will continue to accelerate”

“Despite the dynamic environment, we remain committed to delivering 8% EBIT margin target in 2026, and we have a real strategic benefit.”

“we expect to quadruple our hybrid sales in the next five years”

“we maintain flexibility on where we reach when we reach two million total EV global capacity because we are balancing growth, profitability and returns”

“Our strategy going forward in China will change. We're going to go to a much lower investment, leaner, more focused business in China with higher returns.”

“We're on track this year towards a contribution margin approaching breakeven in Model e and for our first-generation products to be EBIT margin positive by the end of next year.”

“Volumes, we were up 9% in Q1. We expect to be about -- up about 6%-ish for the full year overall.”

“And on e, we see pricing being slightly down on a year-over-year basis as well.”

“Pro, we believe there will be pricing strength throughout the year.”

“We do expect the second half to see pricing pressures, especially on Blue as we see supply and demand normalize.”

“Yes. So, overall, for us, our bridge from 2022 to 2023, we expect pricing for us to be neutral. We still expect that to be the case.”

“When you look at it, that's where we see things unfolding. When we go through the rest of the year on Blue, we expect that mix to come off. That's not going to repeat itself as we run through the rest of the year.”

“Yeah. The league business is largely sitting in Pro, John. We see that continuing through the year. We see Pro -- strength in Pro as we go through the year.”

“And EBT for Ford Credit is anticipated to be around $1.3 billion.”

“We continue to expect full year 2023 total company adjusted EBIT of $9 billion to $11 billion, adjusted free cash flow of about $6 billion and capital expenditures between $8 billion to $9 billion.”

“We expect Ford Model e EBIT margin to improve to around negative 20% in the second half of this year, reflecting stronger per unit contribution margin and significantly higher volumes.”

“But in fact, for Mustang Mach-E from launch through the end of this year, we'll have reduced the building materials from Mustang Mach-E by $5,000 per vehicle.”

“We're now shipping Lightnings, again, taking new orders and increasing production to an annual run rate of 150,000 units, about double what we do now.”

“We remain on track to reach our annualized EV production capacity of 50,000 units per month or 600,000 units globally by the end of this year.”

“When you look at our International Markets Group, I think it's a little bit different there. Our key product is Ranger, and that's all new, and that's launching, and so there's incredible demand for it. And so we think we have some pricing power there as well.”

“So if you look at that, it's at least $2.5 billion depending on where we fall within the range of the guidance.”

“So we see pricing net-net for us next year being about flattish.”

“So we're looking at pricing being about flattish we said volumes, there's a slight opportunity as industry comes along.”

“And let's say that for 2023, it should be at least an incremental $1 billion at least.”

“We also expect about $2 billion lower past service pension income.”

“Ford Credit EBT of about $1.3 billion, and that's about $1.4 billion lower than in 2022, reflecting unfavorable lease residual and credit losses and the nonreoccurrence of derivative games.”

“Now this is only going to accelerate when the new Model e dealer program takes effect in January next year.”

“We expect to have 100% of raw materials we need for the 2 million unit run rate secured by the end of this year.”

“And we expect 2023 to be another big, strong year of share growth.”

“And by the end of -- and we are on plan for that 2 million units of incremental capacity by the end of 2026.”

“But I will tell you, this is a big help. This will really help the profitability of our commercial vehicle that are EV. And I think it will really stimulate the demand.”

“That’s something, though that over time, we do expect the balance sheet to grow, and we would expect some continued borrowing cost headwinds, but those will moderate and ease over time as the portfolio returns.”

“Ford Credit EBT at about $2.7 billion”

“For the year, we expect to earn about $11.5 billion in adjusted EBIT, up about 15% from 2021 with about a 10% increase in wholesales.”

“Our brand strength and order banks remain very strong, and we expect the North American margin to return to double digits in the fourth quarter.”

“We expect the negative working capital impact of those units to reverse in the fourth quarter when the vehicles are completed and shipped to dealers.”

“Next year, we believe we’ll meet the $3,750 critical materials credit requirement on certain Mustang Mach-E and F-150 Lightning models.”

“Our preliminary estimate is that between 55% and 65% of all of our commercial vehicle customers will qualify.”

“In Europe, our all-new EV manufacturing center in Cologne will finish complete -- will be complete in turning out vehicles midway through next year.”

“There is no change to our target.”

“From ‘23 to ‘26, we estimate a combined available tax credit for Ford and our battery partners could total more than $7 billion with large step-up in annual credits in ‘27 as our JV battery plants ramp up to full production.”

“And we are not going to wait until that installed capacity is here. We're going to be bringing those batteries to our highest volume vehicles like next year.”

“And then as we get to the fourth quarter, volume in the fourth quarter on a sequential basis will be better than the third quarter.”

“So third quarter will be down compared to the second quarter.”

“But when you look at the volumes for Q3, they'll be lower than they will be in Q4 because in Q4, we should see the rate fall, the chips improve as we go through the third quarter into the fourth quarter.”

“When you look at the second half, as we said, volumes would be up in the low 20% range compared with the first half.”

“So 53,000 entering the quarter. The team did a good job on the drawdown. We're down to 18,000 at the end of the quarter, and we'll work to get those out over the second half of the year as we can free up the chips that impacted us.”

“Yes. I think we do see it coming off some.”

“So we're looking at about $3 billion for the year, and that's part of what we're doing. We're working to offset those inflationary costs, and that's something that we need to continue to work through.”

“We're going to be installing 60 -- 40-gigawatt hours in North America.”