Financial Data and Key Metrics Changes - The company reported a record revenue of $50 billion for Q2 2025, with an adjusted EBIT of $2.1 billion, reflecting year-over-year improvement in costs [8][32] - The full-year adjusted EBIT guidance was updated to a range of $6.5 billion to $7.5 billion, net of tariffs [9][38] - Adjusted free cash flow was solid at $2.8 billion, with a strong balance sheet showing over $28 billion in cash and $46 billion in liquidity [36][37] Business Line Data and Key Metrics Changes - Ford Pro's revenue grew 11% to nearly $19 billion, with a 12.3% EBIT margin driven by a strong product lineup and disciplined pricing [33] - Model E revenue more than doubled to $2.4 billion, with margins improving nearly 44 points due to a favorable product mix [34] - Ford Blue earned nearly $700 million in the quarter, reflecting profitable market share gains and higher net pricing [35] Market Data and Key Metrics Changes - In the U.S., Ford's sales grew 7 times faster than the industry, with market share up 1.7 points sequentially [20] - The company sold more electrified vehicles than its two main domestic rivals combined, with EVs and hybrids making up close to 14% of the U.S. mix [21] - Outside the U.S., Ford gained market share in key regions such as Canada, Europe, South America, and the Middle East [23] Company Strategy and Development Direction - The company is shifting capital towards Ford Pro, reallocating resources from future EV programs to accelerate growth in high-margin services [10] - Ford aims to enhance its product lineup with a focus on trucks and iconic products, while also investing in low CO2 emissions technologies [14] - The company is committed to improving vehicle quality and reducing warranty costs, with a focus on achieving world-class vehicle quality [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of tariffs, estimating a net headwind of about $2 billion for the year, while expressing confidence in the company's cycle plan [13][39] - The management team emphasized the importance of capital efficiency and cost improvement, with a strong balance sheet providing flexibility to invest through economic downturns [38][40] - The company is optimistic about the future, with a focus on sustainable improvements in warranty and material costs [44] Other Important Information - The company announced a regular dividend of 15 cents per share, payable on September 2, reflecting its commitment to return capital to shareholders [38] - Ford's transformation journey is well underway, with a focus on building a higher growth, higher margin, and more capital-efficient business [32] Q&A Session Summary Question: Drivers of guidance change and improvement - Management noted that the guidance reflects strong improvement in the business, particularly in cost areas, despite absorbing larger tariffs [42][43] Question: Sustainability of market share - Management expressed confidence in sustaining market share gains into the second half of the year, supported by a strong product portfolio [61][62] Question: Balancing emissions policy and EV technology - Management highlighted the importance of transforming engineering and supply chain processes to remain competitive against global OEMs, particularly Chinese manufacturers [70][71] Question: Impact of tariffs and compliance credits - Management discussed ongoing negotiations with the administration to simplify tariffs and reduce liabilities, emphasizing the potential upside for the company [83][84] Question: Electrification initiatives and regional commitments - Management indicated a focus on partnerships for EVs and a streamlined product lineup to balance investments across different regions [99]

Financial Data and Key Metrics Changes - The company reported a record revenue of $50 billion for the second quarter, with adjusted EBIT of $2.1 billion, reflecting a year-over-year improvement in costs excluding tariffs [7][32] - The full-year adjusted EBIT guidance has been updated to a range of $6.5 billion to $7.5 billion, net of tariffs [7][39] - Adjusted free cash flow was solid at $2.8 billion, with a strong balance sheet showing over $28 billion in cash and $46 billion in liquidity [36][37] Business Line Data and Key Metrics Changes - Ford Pro's revenue grew 11% to nearly $19 billion, with an EBIT margin of 12.3%, driven by a strong product lineup and high-margin services [33] - Model E revenue more than doubled to $2.4 billion, with a significant margin improvement of nearly 44 points [34] - Ford Blue earned nearly $700 million in the quarter, reflecting profitable market share gains and higher net pricing [35] Market Data and Key Metrics Changes - In the U.S., Ford's sales grew 7 times faster than the industry, with market share up 1.7 points sequentially [19] - The company sold more electrified vehicles than its two main domestic rivals combined, with EVs and hybrids making up close to 14% of the U.S. mix [20] - Outside the U.S., Ford gained market share in key markets such as Canada, Europe, South America, and the Middle East [22] Company Strategy and Development Direction - The company is shifting capital towards Ford Pro, reallocating resources from future EV programs to accelerate growth in high-margin services [9] - Ford aims to enhance its product lineup with a focus on trucks and iconic products, while also investing in low CO2 emissions technologies [13][14] - The company is committed to improving vehicle quality, with expectations of declining warranty costs in the coming years [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of tariffs, estimating a net headwind of about $2 billion for the year, while expressing confidence in the company's cycle plan [12][39] - The management highlighted the importance of a durable national emission standard to ensure sound industry planning and reduce compliance costs [14] - The company is optimistic about its ability to navigate the changing regulatory environment and capitalize on opportunities in the EV market [66][70] Other Important Information - The company announced a regular dividend of 15 cents per share, payable on September 2, reflecting its commitment to return capital to shareholders [38] - Ford's industrial platform is focused on cost and quality improvements, targeting a net improvement of $1 billion this year, excluding tariffs [25][32] Q&A Session Summary Question: Drivers of guidance change and improvement - Management explained that the guidance reflects strong business improvement despite absorbing larger tariffs, with a focus on sustainable cost improvements [42][44] Question: Strategic spending on EV side - Management indicated a shift in EV spending and capital allocation, emphasizing flexibility in powertrain options and reallocating resources to Ford Pro [48][50] Question: Recall issues and warranty coverage - Management acknowledged improvements in warranty coverage but noted that FSAs have a longer arc, with early indicators showing lower costs for newer model years [56][58] Question: Market share sustainability - Management expressed confidence in sustaining market share gains into the second half of the year, despite expectations of a softer market [60][62] Question: Balancing emissions policy and EV competitiveness - Management highlighted the importance of changing emissions policies as a tailwind for the business, while also focusing on competitive EV strategies [66][70] Question: Tariff negotiations and outcomes - Management discussed ongoing productive conversations with the administration regarding tariff simplification and potential reductions [82][84]

Financial Data and Key Metrics Changes - The company is focusing on cost and quality as top priorities, which are essential for strategic positioning and success in the upcoming years [7][12] - The margins in the Pro business are targeted to be in the mid-teens, with software and services growing at a rate of 20% [14][16] Business Line Data and Key Metrics Changes - Ford Pro has a 40% market share in North America, and the software services associated with it have margins exceeding 50% [12][14] - The company has over 675,000 paid subscriptions for software services, indicating a growing revenue stream [14][54] Market Data and Key Metrics Changes - The company is adjusting its investment priorities based on market changes and consumer feedback, focusing on areas with the highest return potential [23][24] - The competitive landscape is evolving, with the company recognizing the need to compete against fast-developing Chinese manufacturers [43][44] Company Strategy and Development Direction - The company is committed to electrification but is adjusting its approach to focus on smaller, more affordable EVs to attract a broader customer base [19][33] - Partnerships and alliances are seen as a way to enhance capital efficiency and speed to market, rather than pure consolidation [81][82] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the flattening of the EV adoption curve and is adjusting investment levels accordingly, while still maintaining a commitment to EV development [31][32] - The company aims to achieve best-in-class cost and quality, with a focus on higher growth and margins in the next three to five years [105] Other Important Information - The company is leveraging its competitive advantage as a domestic manufacturer, employing more workers and building more vehicles in the U.S. [26][27] - The company is exploring opportunities to minimize tariff impacts by onshoring parts and ensuring compliance with USMCA [28][29] Q&A Session Summary Question: What are the key elements of the original Ford Plus plan that remain in place? - The focus on cost and quality remains unchanged, while the approach to segmentation has been adjusted based on market conditions [11] Question: How does the company view the current tariff environment? - The company sees opportunities to leverage its U.S. footprint to mitigate tariff impacts and is actively working on strategies to reduce exposure [26][27] Question: How has the company adjusted its investment priorities? - The company is now taking a top-down approach to capital allocation, focusing on areas with the best return potential [23][24] Question: What is the outlook for electrification? - The company believes electrification is inevitable but acknowledges that the pace of adoption may take longer than initially expected [31][34] Question: How does the company plan to compete with Chinese manufacturers? - The company recognizes the competitive threat from Chinese manufacturers and is focusing on speed of development and cost structure to maintain competitiveness [43][44] Question: What does success look like for Ford in three to five years? - Success is defined as achieving best-in-class cost and quality, with significant growth in software services and a more durable business model [105]

Financial Data and Key Metrics Changes - Ford reported a record revenue of $185 billion for the previous year, marking a 5% increase and the fourth consecutive year of top-line growth [35] - In the first quarter of the current year, revenue was $41 billion, which was down year-over-year due to planned factory downtime [36] - The adjusted free cash flow for last year was $6.7 billion, reflecting a 65% conversion rate [37] Business Line Data and Key Metrics Changes - Ford Pro's full-year revenue for 2024 increased by 15% to $67 billion, with an EBIT of $9 billion and a margin of 13.5% [34] - Sales of off-road performance vehicles grew by 20% in the first quarter in the US [28] - The company has almost 1 million paid subscriptions for its digital software services [32] Market Data and Key Metrics Changes - Ford was the number two electric vehicle brand in the US in 2024 [25] - International operations were collectively profitable in the last quarter, with China contributing $900 million in EBIT [36] - The hybrid sales now account for 10% to 15% of Ford's global sales every month [92] Company Strategy and Development Direction - The Ford Plus strategy aims to transform the company into a higher growth, higher margin, and more capital-efficient business [26] - The company is committed to maintaining its production in the US and has ongoing manufacturing investments in Tennessee, Ohio, and Kentucky [66] - Ford is focused on providing customers with a wide choice of powertrains, including gas, hybrid, and electric vehicles [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties and emphasized the importance of policy certainty for US automakers [22] - The company is committed to improving quality, with 70% of annual bonuses linked to quality metrics [76] - Management highlighted the need for a clear plan to address supply chain emissions in line with net zero goals [16] Other Important Information - Ford's commitment to community support was highlighted, including efforts during crises such as water main breaks in Detroit [74] - The company has extended its Ford Power Promise to facilitate home charging for customers [39] - Ford's dividend payout over the last three years exceeded $10 billion [38] Q&A Session Summary Question: Impact of global economic uncertainty and tariffs - Management clarified that Ford has never left the US manufacturing base and highlighted the company's commitment to American production [62] - Tariff impacts were noted as $2.5 billion in negative headwinds, but Ford is better positioned than competitors [65] Question: Stock performance and share buybacks - Management expressed confidence in the company's future value and stated there are no plans for stock buybacks, focusing instead on long-term growth [70][72] Question: Quality improvements and recalls - Management reported a significant reduction in recalls from 8.8 million in 2022 to 4.8 million last year, with ongoing efforts to improve warranty costs [77][78] Question: Future vehicle production plans - Management indicated that while there is nostalgia for past models, the focus will be on future products that meet market demands [81][84] Question: Ford Pro's profitability and potential spin-off - Management confirmed that Ford Pro will remain integrated within the company due to its competitive advantages and growth potential [85][90] Question: EV strategy and competition from low-cost manufacturers - Management emphasized Ford's commitment to a diverse powertrain strategy, including hybrids and affordable EVs, to compete effectively in the market [91][94]

Financial Data and Key Metrics Changes - The company delivered $1 billion in EBIT for Q1 2025, exceeding the expectation of roughly breakeven, driven by cost improvements and strong net pricing in North America [22][30] - Revenue was $41 billion, down 5% year-over-year, with wholesales down 7% due to planned downtime at several plants [23][29] - Free cash flow was a use of $1.5 billion, attributed to unfavorable timing differences, net spending, and changes in working capital [29] Business Line Data and Key Metrics Changes - Ford Pro showed resilience with strong demand for key products, maintaining over 40% share of the US class one to seven truck and van market [24][25] - Model e more than doubled its first quarter wholesale volumes, with US retail sales growing 15% [26] - Ford Blue earned a modest profit, reflecting volume decline and adverse exchange rates, but iconic nameplates like F Series and Bronco continued to lead their segments [27] Market Data and Key Metrics Changes - The company experienced its best first quarter US pickup sales in over 20 years, with sequential share growth in its home market [10][12] - The industry SAAR is expected to run about 5 million units lower than the original plan during the second half of the year, around 15.5 million units [48] Company Strategy and Development Direction - The company is transforming into a higher growth, higher margin, and more capital-efficient business, with a focus on cost and quality improvements [22][30] - Ford supports US manufacturing growth and aims to leverage its domestic footprint as a competitive advantage amid tariff impacts [11][12] - The company has invested $50 billion in manufacturing capacity since 2020, with ongoing investments in battery and manufacturing capacity across several states [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying performance excluding tariffs, while acknowledging the uncertainty surrounding tariff impacts and potential supply chain disruptions [31][32] - The company suspended its full-year guidance due to material tariff-related risks and the potential for industry-wide supply chain disruptions [31][32] - Management highlighted the importance of customer reactions to potential price increases resulting from tariffs as a key factor for future performance [70] Other Important Information - The company declared a regular second quarter dividend of 15¢ per share, payable on June 2 [30] - Ford Credit delivered a solid quarter with EBT up significantly, reflecting a high-quality book of business and higher financing margins [28] Q&A Session Summary Question: Can you provide more details on the gross tariff headwinds? - The $2.5 billion in gross costs is estimated to be roughly half from parts and half from imported vehicles, including impacts from steel and aluminum pricing [36][41] Question: What are the offsets for the net tariff impact? - The largest element of the offset is market equation optimization, along with cost mitigation actions such as using bonded carriers for vehicles shipped to Canada [42][41] Question: How do you expect volume and inventory to play out in the coming months? - The company expects industry pricing related to tariffs to increase by about 1% to 1.5% in the second half, with a projected SAAR of around 15.5 million units [48][49] Question: What is the status of your software-defined vehicle strategy? - The strategy remains unchanged, with a focus on merging electric architectures to enhance efficiency and reduce costs [55][56] Question: Are there signs of supply chain disruption due to tariffs? - There is potential for disruption, particularly with rare earth materials from China, which could impact production [62] Question: What factors will influence the ability to provide guidance in the future? - Key factors include policy clarifications, customer reactions to pricing changes, and competitive dynamics [70] Question: How is the company performing in Europe? - The company has seen strong performance in its commercial business in Europe, with increased market share and successful electric vehicle launches [107]

Financial Data and Key Metrics Changes - The company reported EBIT of $1 billion for Q1 2025, exceeding the breakeven expectation, driven by cost improvements and strong net pricing in North America [19][20] - Revenue decreased by 5% year-over-year to $41 billion, with wholesales down 7% due to planned downtime at several plants [21] - The company estimates a gross adverse EBIT impact of $2.5 billion and a net adverse EBIT impact of $1.5 billion for the full year 2025 due to tariffs [30][31] Business Line Data and Key Metrics Changes - Ford Pro showed resilience with strong demand for key products, maintaining over 40% share in the US class one to seven truck and van market [22] - Model E more than doubled its first quarter wholesale volumes, with US retail sales growing 15% [24] - Ford Blue earned a modest profit, reflecting volume decline and adverse exchange rates, but iconic nameplates like F-Series and Bronco continued to lead their segments [25] Market Data and Key Metrics Changes - The company expects industry SAAR to run about 5 million units lower than the original plan during the second half of the year, around 15.5 million units [46] - The company anticipates industry pricing related to tariffs to increase by about 1% to 1.5% in the second half [46] - Auction values increased by 3% year-over-year, reflecting low used car availability [26] Company Strategy and Development Direction - The company is transforming into a higher growth, higher margin, and more capital-efficient business, focusing on cost and quality improvements [19] - Ford continues to invest in manufacturing capacity, with $50 billion invested since 2020, including battery capacity in multiple states [18] - The company is leveraging its US manufacturing footprint as a competitive advantage in the evolving tariff landscape [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying performance excluding tariffs, aligning with original targets, and emphasized the importance of the US footprint [31] - The company is cautious about near-term risks related to tariffs, supply chain disruptions, and competitive responses [30] - Management highlighted the need for clarity on policy issues, including tax and emissions, to provide future guidance [67] Other Important Information - Free cash flow was a use of $1.5 billion, attributed to unfavorable timing differences and changes in working capital [27] - The company declared a regular second quarter dividend of 15¢ per share, reflecting its commitment to return 40-50% of trailing free cash flow to shareholders [28] Q&A Session Summary Question: Can you provide more details on the gross tariff headwinds? - The $2.5 billion gross cost is estimated to be roughly half from parts and half from imported vehicles, including pricing impacts from steel and aluminum [34][35] Question: What are the offsets included in the net tariff impact? - The net adverse EBIT impact of $1.5 billion includes about $1 billion of offsetting recovery actions, primarily from market equation optimization and cost mitigation [39][40] Question: How do you expect volume to play out in the coming months? - The company expects industry pricing related to tariffs to increase, with a projected SAAR of 15.5 million units in the second half of the year [46][47] Question: What is the status of the software-defined vehicles strategy? - The company merged its electric architectures into one, enhancing capital efficiency and reducing costs for future products [52][54] Question: How is Ford Credit impacted by tariffs? - Elevated auction prices and higher new vehicle prices due to tariffs may support auction values, but economic slowdown could have a muted effect [102][104] Question: What is the current status of the business in Europe? - The company has seen strong performance in its commercial business in Europe, increasing market share despite some headwinds [106][107]