Ford Narrows 2026 Profit Outlook, Sees 2027 Roughly Flat Amid $2 Billion in Cost Headwinds

4:51:41 PM ETI'm not there in the middle.

4:51:47 PM ETAnd actually,

4:51:59 PM ETwe're determined of it.

4:52:05 PM ETYeah

4:52:23 PM ETwhy this is a good thing.

4:52:29 PM ETlike this one.

4:52:41 PM ETmake the goods.

4:53:23 PM ETthere's a lot of people in the house.

4:53:29 PM ETone.

4:53:41 PM ETI'm not sure. It isn't a good idea. I'm going to go.

4:53:47 PM ETthe problem now is.

4:54:05 PM ETto be found in that.

4:54:11 PM ETyou're not in now.

4:54:17 PM ETbat close.

4:54:23 PM ETI know we can be.

4:54:47 PM ETI didn't even know.

4:55:17 PM ETboth of it is good enough.

4:55:29 PM ETI

4:55:41 PM ETthan

4:56:17 PM ETgame.

4:56:29 PM ETas the

4:56:35 PM ETyou're gonna be.

4:56:53 PM ETto be there.

4:57:05 PM ETAnd it's

4:57:11 PM ETcolours, and

4:57:23 PM ETfor a given.

4:57:35 PM ETthis one we do with the means all the time.

4:57:41 PM ETof a

4:57:53 PM ETa pen.

4:57:59 PM ETlike to say that it.

4:58:23 PM ETI don't know how you can.

4:58:29 PM ETschool and reasonable.

4:58:35 PM ETOkay, and it does not.

4:58:41 PM ETyour money.

4:58:47 PM ETwe're in the

4:59:05 PM ETI don't know and

4:59:17 PM ETa mainstream.

4:59:23 PM ETSo I don't know.

4:59:35 PM ETactions.

4:59:41 PM ETBut it's nothing.

4:59:47 PM ETthings of the diet.

5:00:05 PM ETI think that.

5:00:23 PM ETthere.

5:00:29 PM ETI mean it cheaters

5:00:35 PM ETGood day, everyone. My name is Ronnie and I will be your conference operator today.

5:00:35 PM ETgood day everyone

5:00:35 PM ETmy name is ronnie and i will be your conference operator today

5:00:41 PM ETAt this time, I would like to welcome you to the Ford Motor Company third quarter 2026 earnings conference call.

5:00:41 PM ETat this time i would like to welcome you to the ford motor company third quarter

5:00:47 PM ETconference call. All lines have been placed on you to prevent any background noise. After the speaker's remarks, there will be.

5:00:47 PM ETtwenty twenty six earnings conference call

5:00:47 PM ETall lines have been placed on mute to prevent any background noise

5:00:53 PM ETa question and answer session. If you would like to ask a question during this time, please use the raised hand function, which can be

5:00:53 PM ETafter the speakers' remarks there will be a question and answer session

5:00:59 PM ETfound on the black bar at the bottom of your screen. At this time, I would like to turn the call over to Maria Richards.

5:00:59 PM ETif you would like to ask a question during this time please use the raise hand function which can be found on the black

5:00:59 PM ETbar at the bottom of your screen

5:01:05 PM ETRichardone, deep investment relations officer. Thank you, Rani, and welcome to you for.

5:01:05 PM ETat this time i would like to turn the call over to maria richardone

5:01:05 PM ETchief investment relations officer

5:01:11 PM ETMotor Company's third quarter 2026 earnings call. I'm Maria Richard On Ford.

5:01:11 PM ETthank you ronnie and welcome to

5:01:11 PM ETford motor company's third quarter twenty twenty six earnings call

5:01:17 PM ETinvestor relations officer. With me today are Jim Farley, president and CEO, and Sherry House.

5:01:17 PM ETi'm maria richardone ford's chief investor relations officer

5:01:23 PM ETCFO. Joining us for QA are Andrew Frick, president of Ford Blue, and model.

5:01:23 PM ETwith me today are jim farley president and ceo and sherry house cfo

5:01:29 PM ETE. Alicia Buller Davis, president of Ford Pro. Kumar Gahultra, chief operating office.

5:01:29 PM ETjoining us for q and a are andrew frick

5:01:29 PM ETpresident of ford blue and model e

5:01:29 PM ETalicia bohler davis president of ford pro kumar gahultra

5:01:35 PM ETofficer, Cappy O'Callahan, CEO of Ford Credit, and Dave Carroll, president of Ford Energy.

5:01:35 PM ETchief operating officer

5:01:35 PM ETkathy o'callaghan ceo of ford credit and dave carroll

5:01:41 PM ETEnergy. Jim will give a high-level overview of the business, and Sherry will provide added texture on the financials.

5:01:41 PM ETpresident of ford energy

5:01:41 PM ETjim will give a high level overview of the business

5:01:47 PM ETand guidance. We will be referencing non-gap measures today. These are reconciled to the most comparable U.S. gap.

5:01:47 PM ETand sherry will provide added texture on the financials and guidance

5:01:47 PM ETwe will be referencing non gaap measures today these are reconciled to the most comparable u s

5:01:53 PM ETmeasures and the appendix of our earnings deck. You can find the deck at shareholder.ford.com.

5:01:53 PM ETgaap measures in the appendix of our earnings deck you can find the deck at shareholder

5:01:53 PM ETford dot com

5:01:59 PM ETdiscussion also includes forward-looking statements. Our actual results may differ. The most significant

5:01:59 PM ETour discussion also includes forward looking statements

5:02:05 PM ETrisk factors are included on page 20 of our deck. Unless otherwise noted, all comparisons are year over year.

5:02:05 PM ETour actual results may differ the most significant risk factors are included on page

5:02:05 PM ETtwenty of our deck

5:02:11 PM ETCompany EBIT, EPS, and Free Cash Flow are on an adjusted basis. Upcoming night.

5:02:11 PM ETunless otherwise noted all comparisons are year over year

5:02:11 PM ETcompany ebit eps and free cash flow are on an adjusted basis

5:02:17 PM ETIR engagements include Sherry House at the Berkeley's Global Auto and Mobility tech conference in New York.

5:02:17 PM ETupcoming ir engagements include sherry house at

5:02:23 PM ETon November 18th. Now I'll turn the call over to Jim. Hey, Samaria, we're delivered in another strong.

5:02:23 PM ETthe barclays global auto and mobility tech conference

5:02:23 PM ETin new york on november eighteenth now i'll turn the call over to jim

5:02:23 PM ETthanks maria

5:02:29 PM ETquarter thanks to our great products, our services, and execution. I want to thank.

5:02:29 PM ETford delivered another strong quarter thanks to our great products

5:02:35 PM ETour employees and our dealers, all of our suppliers, for this progress.

5:02:35 PM ETour services and execution i want to thank our employees

5:02:35 PM ETand our dealers

5:02:35 PM ETall of our suppliers

5:02:41 PM ETand for their commitment to Ford Plus. In the third car quarter, as you know, we generated 2.7.

5:02:41 PM ETfor this progress and for their commitment to ford plus

5:02:47 PM ET2.7 billion dollars in adjusted eBay. We're raising our low end of our previous four year adjustment.

5:02:47 PM ETin the third quarter as you know we generated

5:02:47 PM ETtwo point seven billion dollars in adjusted ebit

5:02:53 PM ETadjusted EBIT guidance. And now we specify 10.5 billion and 11 billion dollars.

5:02:53 PM ETwe're raising our low end of our previous full year adjusted ebit guidance

5:02:59 PM ETdollars. Our strategy is clear. Number one, grow our auto business with a whole new generation.

5:02:59 PM ETand now expect to earn between ten point five billion dollars and eleven billion dollars

5:02:59 PM ETour strategy is clear number one grow our auto business

5:03:05 PM ETgeneration of vehicles focused on North America, focused on transforming our ED business, and global price.

5:03:05 PM ETwith a whole new generation of vehicles focused on north america

5:03:05 PM ETfocused on transforming our ev business

5:03:11 PM ETproducts with much less capital. Number two, aggressively expand our auto adjacencies.

5:03:11 PM ETand global products with much less capital

5:03:17 PM ETSoftware, services, and parts. Well, strengthening our finance and capability.

5:03:17 PM ETnumber two aggressively expand our auto adjacencies

5:03:17 PM ETsoftware services and parts

5:03:23 PM ETcapability. And third, diversifying with Ford Energy. The objective.

5:03:23 PM ETwhile strengthening our financing capability and third

5:03:23 PM ETdiversifying with ford energy

5:03:23 PM ETthe objective

5:03:29 PM ETis a more profitable, capital efficient, and resilient forward, one that achieves 8% of justice.

5:03:29 PM ETis a more profitable capital efficient and resilient ford

5:03:35 PM ETEBIT margins by 2029. And deliver sustained earnings, cash flow, and return.

5:03:35 PM ETone that achieves eight percent adjusted ebit margins by twenty twenty nine

5:03:41 PM ETreturns to our shareholders over time. Let's start with our vehicles. In the third quarter,

5:03:41 PM ETand deliver sustained earnings cash flow and returns

5:03:41 PM ETto our shareholders over time

5:03:42 PM ETlet's start with our vehicles

5:03:47 PM ETquarter, we continue to focus on a portfolio that leads into our strengths. Trucks, vans, you need.

5:03:47 PM ETin the third quarter we continue to focus on a portfolio that leans into our

5:03:47 PM ETstrengths

5:03:53 PM ETand utilities. Our pickup lineup gives customers an unmatched breath of choice because.

5:03:53 PM ETtrucks vans and utilities

5:03:53 PM ETour pickup lineup gives customers an unmatched breadth

5:03:59 PM ETbetween vehicles, prices, trims, and power trains. In Q3, F series.

5:03:59 PM ETof choice between vehicles

5:03:59 PM ETprices

5:03:59 PM ETtrims and powertrains

5:04:05 PM ETcaptured the highest retail share among all full-size truck brands and is on pace for the

5:04:05 PM ETin q3 f series captured the highest retail share

5:04:11 PM ET50th straight year as America's best-selling truck. Maverick is a Merica's.

5:04:11 PM ETamong all full size truck brands and is on pace for the

5:04:11 PM ETfiftieth straight year as america's best selling truck

5:04:17 PM ETAmerica's best-selling hybrid pickup. Internationally, Ranger leads in many markets, including Australia.

5:04:17 PM ETmaverick is america's best selling hybrid pickup

5:04:23 PM ETAustralia and Europe. Early demand for the Ranger Superduty is very strong.

5:04:23 PM ETinternationally ranger leads in many markets including australia and europe

5:04:29 PM ETAlready, number one, the heavy duty medium-sized truck market in Australia in his first year.

5:04:29 PM ETearly demand for the ranger super duty is very strong

5:04:29 PM ETalready number one heavy duty medium sized truck market in

5:04:35 PM ETyear, opening a very profitable opportunity for us. Transit.

5:04:35 PM ETaustralia in its first year

5:04:35 PM ETopening a very profitable opportunity

5:04:35 PM ETfor us

5:04:41 PM ETcontinues to be the best-selling band in the US, for it also leads in three-row SU.

5:04:41 PM ETtransit continues to be the best selling van in the us

5:04:47 PM ETSUVs in the U.S. with the expedition and explorer. We're also expanding.

5:04:47 PM ETford also leads in three row suvs in the us

5:04:47 PM ETwith the expedition and explorer

5:04:53 PM ETexpanding access to customers through Ford Blue Oval Advantage. Our certificate.

5:04:53 PM ETwe're also expanding access to customers

5:04:53 PM ETthrough ford blue oval advantage

5:04:59 PM ETcertified pre-owned program, making Ford now the number one certified pre-owned brand in.

5:04:59 PM ETour certified pre owned program making ford now

5:05:05 PM ETin the US. This program builds customer loyalty and positions forward for our.

5:05:05 PM ETthe number one certified pre owned brand in the u s

5:05:05 PM ETthis program builds customer loyalty and positions ford

5:05:11 PM ETour affordable new vehicles that will be coming in the next couple of years to our showrooms. And it really helps.

5:05:11 PM ETfor our affordable new vehicles that will be coming in the next

5:05:17 PM EThelps our resale values. In fact, we found that these used customers are 50%.

5:05:17 PM ETcouple years to our showrooms and it really helps our resale values

5:05:23 PM ETmore likely than typical used car buyers to purchase a new Ford.

5:05:23 PM ETin fact we found that these used customers

5:05:23 PM ETare fifty percent more likely

5:05:23 PM ETthan typical used car buyers to purchase a new ford

5:05:29 PM ETfoundation of our sustained growth is world-class quality. Of course, topping the GDP.

5:05:29 PM ETthe foundation of our sustained growth

5:05:29 PM ETis world class quality

5:05:35 PM ETJD Powers 2026 IQS study and reduction we've seen in warmth.

5:05:35 PM ETof course topping the j d powers

5:05:35 PM ETtwenty twenty six iqs study

5:05:41 PM ETwarranty coverages is encouraging to all of us. Excluding novellas and tariffs, we

5:05:41 PM ETand reduction we've seen in warranty coverages

5:05:41 PM ETis encouraging to all of us

5:05:41 PM ETexcluding novelis and tariffs

5:05:47 PM ETreduce warranty and material costs by $1.5 billion in 25.

5:05:47 PM ETwe reduced warranty and material costs by one point five billion dollars in twenty

5:05:47 PM ETfive

5:05:53 PM ETon track to reduce another one billion this year. But we have much more to do.

5:05:53 PM ETand are on track to reduce another one billion dollars this year

5:05:53 PM ETbut we have much more to do

5:05:59 PM ETespecially on long-term durability and the ownership experience.

5:05:59 PM ETespecially on long term durability

5:05:59 PM ETand the ownership experience

5:06:05 PM ETWe are accelerating our industrial system, including very aggressive next-generation vehicle.

5:06:05 PM ETwe are accelerating our industrial system

5:06:11 PM ETvehicle cost reduction targets. The goal is a world-class industrial system, one that makes.

5:06:11 PM ETincluding very aggressive next generation vehicle

5:06:11 PM ETcost reduction targets the goal is a world class industrial system

5:06:17 PM ETmakes cost competitiveness and quality repeatable. Our Super Dude launched in the Oak.

5:06:17 PM ETone that makes cost competitiveness and quality repeatable

5:06:23 PM ETOakville, Ontario is an important example of this discipline. The production ramp is already

5:06:23 PM ETour super duty launch in oakville ontario

5:06:23 PM ETis an important example of this discipline

5:06:29 PM ETalready exceeding planned daily volume and jobs per hour rates.

5:06:29 PM ETthe production ramp is already exceeding

5:06:29 PM ETplanned daily volume and jobs per hour rates

5:06:35 PM ETreached okay to buy last week and began shipping trucks to dealerships. And the quality was

5:06:35 PM ETwe reached okay to buy last week and began shipping trucks to dealerships

5:06:41 PM ETwe're seeing is fully competitive with our existing super duty plan, which is number one at J.D. Powers.

5:06:41 PM ETand the quality we're seeing is fully competitive with our existing super duty plan

5:06:41 PM ETwhich is number one in jd powers

5:06:47 PM ETThe added capacity will give us flexibility for future plant changeovers and support.

5:06:47 PM ETthe added capacity will give us flexibility for future plant changeovers

5:06:53 PM ETprofitable growth in retail, rental, and upfitter channels. We're bringing the same

5:06:53 PM ETand support profitable growth in retail rental and outfitter channels

5:06:59 PM ETdiscipline to the next generation at 150. Prototypes begin builds on.

5:06:59 PM ETwe're bringing the same discipline to the next generation

5:06:59 PM ETf-one hundred fifty

5:06:59 PM ETprototypes begin

5:07:05 PM ETour beginning in first quarter of 27, just a couple months away. We have an incredible power train durability.

5:07:05 PM ETbuilds are beginning in first quarter twenty twenty seven just a couple of months away

5:07:11 PM ETtesting, which is now five-fold increase to meet our bullet-proof power train target.

5:07:11 PM ETwe have an incredible powertrain durability testing

5:07:11 PM ETwhich is now fivefold increase to meet our bulletproof powertrain

5:07:17 PM ETat Ford. We're doubling endurance and strength testing and increasing full.

5:07:17 PM ETtarget at ford we're doubling endurance and strength testing

5:07:23 PM ETfull vehicle test mileage by nearly 60% to almost four million miles.

5:07:23 PM ETand increasing full vehicle test mileage

5:07:23 PM ETby nearly sixty percent

5:07:29 PM ETThe F-150 will be the most extensively tested truck ever forward, and we will apply.

5:07:29 PM ETto almost four million miles the f-one hundred fifty will be the most

5:07:29 PM ETextensively tested truck

5:07:35 PM ETapply this exact same approach across our company. Alongside strength in

5:07:35 PM ETever at ford and we will apply this exact same approach

5:07:35 PM ETacross our company

5:07:41 PM ETstrengthening our best franchises, we're opening new paths to grow at more affordable price points.

5:07:41 PM ETalongside strengthening our best franchises

5:07:47 PM ETpoints. Next year, we will be launching our affordable mid-size pickup for international.

5:07:47 PM ETwe're opening new paths to grow at more affordable price points

5:07:47 PM ETnext year we will be launching our affordable midsize pickup

5:07:53 PM ETmarkets. We expect the base material cost for this truck to be 20% lower than today.

5:07:53 PM ETfor international markets

5:07:53 PM ETwe expect the base material cost for this truck to be twenty

5:07:59 PM ETtoday's ranger. Just as Maverick is done in the US, this truck is designed to bring new customers.

5:07:59 PM ETlower than today's ranger just as maverick has done in the u s

5:08:05 PM ETcustomers into the Ford truck lineup internationally, at a cost structure that allows us to compete.

5:08:05 PM ETthis truck is designed to bring new customers into the ford truck lineup

5:08:11 PM ETcompete, in this case, with the Chinese. And at Louisville, we are preparing a launch of the

5:08:11 PM ETinternationally at a cost structure that allows us to compete in this case

5:08:11 PM ETwith the chinese

5:08:11 PM ETand in louisville

5:08:17 PM ETFab, our first vehicle off the UED platform. Rigorous testing and early supply or preparation.

5:08:17 PM ETwe are preparing the launch of the fathom our first vehicle off the uev platform

5:08:23 PM ETpreparation are central to that effort. The launch remains on track for the fourth quarter next year.

5:08:23 PM ETrigorous testing and early supplier preparation are central to that effort

5:08:23 PM ETthe launch remains on track for fourth quarter next year

5:08:29 PM ETYesterday I had the opportunity to drive our prototype. Wow, it completely

5:08:29 PM ETyet yesterday i had the opportunity to drive our prototype

5:08:29 PM ETwow

5:08:35 PM ETblew me away. There's zero to sixty, huge Roman side, and the hands for.

5:08:35 PM ETit completely blew me away zero to sixty

5:08:35 PM EThuge room inside

5:08:41 PM EThands-free eight ass experience was like something I've never experienced. Fathom is really a

5:08:41 PM ETand the hands free

5:08:41 PM ETadas experience was like something i've never experienced

5:08:47 PM ETbreakthrough product. It's highly capable, innovative, affordable.

5:08:47 PM ETfandom is really a breakthrough product it's highly capable

5:08:47 PM ETinnovative

5:08:47 PM ETaffordable

5:08:53 PM ETand that EV product will be available to more Americans way ahead of our competition.

5:08:53 PM ETand that ev product

5:08:59 PM ETThis will require high-level execution by our team to deliver on time and at cost.

5:08:59 PM ETwill be available to more americans way ahead of our competition

5:08:59 PM ETthis will require high level execution by our team to deliver on time and at cost

5:09:05 PM ETAnd the MSRP, under $30,000, and the low cost of ownership, is perfect for today.

5:09:05 PM ETin the msrp under thirty thousand dollars and the low cost of ownership

5:09:11 PM ETtoday's market. Fathom will offer something brand new for US EV customers.

5:09:11 PM ETis perfect for today's market

5:09:11 PM ETfathom will offer something

5:09:11 PM ETbrand new for u s ev customers

5:09:17 PM ETAnd advanced zonal electric architecture for its first 48-bolt.

5:09:17 PM ETan advanced

5:09:17 PM ETzonal electrical architecture

5:09:23 PM ET48-bolt low-voltage system, along with the sophisticated advanced driver capability.

5:09:23 PM ETfor its first forty eight volt low voltage system

5:09:29 PM ETas hand speed driving. In a credible real-wheel drive performance feel, and a lot.

5:09:29 PM ETalong with a sophisticated advanced driver assist capability

5:09:29 PM ETsuch as hands free driving

5:09:35 PM ETlot of fun to drive. And bidirectional charging, so you can power your home with the fathom.

5:09:35 PM ETan incredible rear wheel drive performance feel

5:09:35 PM ETand a lot of fun to drive

5:09:41 PM ETrates are high or during an outage. And there's so much more to this product that we're excited to share.

5:09:41 PM ETand bidirectional charging so you can power your home with the fathom

5:09:41 PM ETwhen rates are high

5:09:41 PM ETor during an outage

5:09:41 PM ETand there's so much more to this product that we're exciting

5:09:47 PM ETshare with you. Twitching gears to our growing auto services business, software services.

5:09:47 PM ETto share with you switching gears to our growing auto services business

5:09:53 PM ETparts, and financing. Now, these auto-adjacencies deepen our customer's relationship with us.

5:09:53 PM ETsoftware services parts and financing

5:09:59 PM ETwith us and create downstream value by enabling us to earn more over the

5:09:59 PM ETnow these auto adjacencies deepen our customers' relationship with us

5:09:59 PM ETand create downstream value

5:10:05 PM ETthe life of each vehicle. Both software services and parts businesses achieve.

5:10:05 PM ETby enabling us to earn more over the life of each vehicle

5:10:05 PM ETboth software services and parts businesses

5:10:11 PM ETachieved record revenue in the third quarter at highly accretive margins.

5:10:11 PM ETachieved record

5:10:11 PM ETrevenue in the third quarter and highly accretive margins

5:10:17 PM ETAn important link exists here between software and parts. Connected services.

5:10:17 PM ETan important linkage exists here between software and parts

5:10:23 PM ETservices help us anticipate maintenance over time, including a whole new software product.

5:10:23 PM ETconnected services help us anticipate maintenance over time

5:10:29 PM ETproduct called Prognostics at Ford, bringing customers to our remote service bands, almost 5,000.

5:10:29 PM ETincluding a whole new software product called prognostics at ford

5:10:35 PM ET5,000 of them now, and our dealer network to keep their vehicles running 24/7.

5:10:35 PM ETbringing customers to our remote service vans almost five thousand of them now

5:10:35 PM ETand our dealer network to keep their

5:10:35 PM ETvehicles running twenty fourseven

5:10:41 PM ETWe found that when a retail customer combines a software description with regular service.

5:10:41 PM ETwe found that when a retail customer combines a software subscription

5:10:47 PM ETservice, the retention of the customer, especially for parts, is about nine points.

5:10:47 PM ETwith regular service

5:10:47 PM ETthe retention

5:10:47 PM ETof the customer

5:10:53 PM ETpoints higher. In parts specifically, we grew our U.S. wholesale business to third-party independent records.

5:10:53 PM ETespecially for parts is about nine points higher

5:10:53 PM ETin parts specifically we grew our u s wholesale business

5:10:59 PM ETrepair shops, and we've expanded a lot in Europe. A broader motorcraft catalog also allows.

5:10:59 PM ETto third party independent repair shops and we've expanded a lot in europe

5:11:05 PM ETallows us to serve fleet customers of competitive brands and owners of much older Ford V.

5:11:05 PM ETa broader motorcraft catalog also allows us to serve

5:11:05 PM ETfleet customers

5:11:11 PM ETvehicles. And Ford Credit has had a great third quarter, notably to give.

5:11:11 PM ETof competitive brands and owners of much older ford vehicles

5:11:11 PM ETin ford credit

5:11:11 PM EThas had a great third quarter

5:11:11 PM ETnotably

5:11:17 PM ETtogether with Ford Pro, Credit launched Ford Pro leasing in the third quarter.

5:11:17 PM ETtogether with ford pro credit launched

5:11:17 PM ETford pro leasing

5:11:23 PM ETIt's a big deal for Pro. Adding commercial leasing to our fleet management, software.

5:11:23 PM ETin the third quarter it's a big deal for pro

5:11:29 PM ETsoftware, and maintenance offerings will help us grow our pro-digital fleet management portfolio.

5:11:29 PM ETadding commercial leasing to our fleet management

5:11:29 PM ETsoftware and maintenance offerings

5:11:29 PM ETwill help us grow our pro digital fleet management portfolio

5:11:35 PM ETwhich we will expect to be over 100,000 units by year-end. Many of those are not.

5:11:35 PM ETwhich we will expect to be over one hundred thousand units by year end

5:11:41 PM ETnon-ford vehicles. Turning to Ford Energy, the investment thesis is.

5:11:41 PM ETmany of those are non ford vehicles

5:11:41 PM ETturning to ford energy

5:11:47 PM ETis very clear. Ford is going to solve a meaningful customer problem. Build on Ford's.

5:11:47 PM ETthe investment thesis is very clear

5:11:47 PM ETford is going to solve a meaningful customer problem

5:11:53 PM ETFord's advantage and offer a credible path to material earnings. With a tract of research,

5:11:53 PM ETbuild on ford's advantage and offer a credible path

5:11:59 PM ETreturns in the short term. Our starting point is U.S. manufactured grid-scale battery stores.

5:11:59 PM ETto material earnings with attractive returns in the short term

5:12:05 PM ETstorage for companies building America's new power infrastructure and data centers.

5:12:05 PM ETour starting point is u s manufactured grid scale battery storage

5:12:05 PM ETfor companies building america's new power infrastructure and data centers

5:12:11 PM ETThese customers need a domestic partner with the manufacturing know-how and scale, and

5:12:11 PM ETthese customers need a domestic partner

5:12:17 PM ETstaying power to support them throughout the product's life. We are progressing on two fronts.

5:12:17 PM ETwith the manufacturing know how and scale

5:12:17 PM ETand staying power to support them throughout the product's life

5:12:23 PM ETfronts: preparing our manufacturing capacity and securing customers.

5:12:23 PM ETwe are progressing on two fronts

5:12:23 PM ETpreparing our manufacturing capacity

5:12:23 PM ETand securing customers

5:12:29 PM ETbattery plant, Kentucky, we have met every single operating milestone so far.

5:12:29 PM ETat our battery plant in kentucky we have met every

5:12:29 PM ETsingle operating milestone so far

5:12:35 PM ETWe have completed trial runs of electrode mixing, the first step in producing prismatic.

5:12:35 PM ETwe have completed trial runs of electrode mixing

5:12:41 PM ETprismatic LFP battery cells. Using the exact same process as our battery plant and work.

5:12:41 PM ETthe first step in producing prismatic lfp battery cells

5:12:47 PM ETMarshall, Michigan. We remain on track to bring 20 gigawatt hours of annual capacity online.

5:12:47 PM ETusing the exact same process as our battery plant in marshall michigan

5:12:53 PM ETby the end of next year. Commercial progress is encouraging, and demand remains.

5:12:53 PM ETwe remain on track to bring twenty gigawatt hours of annual capacity online

5:12:53 PM ETby the end of next year

5:12:53 PM ETcommercial progress is encouraging

5:12:59 PM ETremains very strong. Executed contracts and late-stage negotiations together are ready.

5:12:59 PM ETand demand remains very strong

5:13:05 PM ETcurrently account for more than 80% of Ford Energy's 2028 capacity.

5:13:05 PM ETexecuted contracts and late stage negotiations together

5:13:05 PM ETalready currently account for more than eighty percent

5:13:05 PM ETof ford energy's twenty twenty eight capacity

5:13:11 PM ETWe are building a diverse customer base across solar, grid support, and data centers, and we

5:13:11 PM ETwe are building a diverse customer base across solar

5:13:17 PM ETexpect our 2028 capacity to be fully committed by Q1 over the next year.

5:13:17 PM ETgrid support and data centers and we expect our twenty twenty eight capacity

5:13:17 PM ETcapacity to be fully committed

5:13:17 PM ETby q1 of next year

5:13:23 PM ETPricing singles remain consistent with our investment assumptions. The goat for 29.

5:13:23 PM ETpricing signals remain consistent with our investment assumptions

5:13:29 PM ETand 30 capacity are already advancing, with customers engaged way ahead of our initial.

5:13:29 PM ETnegotiation for twenty nine and thirty capacity

5:13:35 PM ETinitial expectations. The DC block gives us a practical starting point to build a broader

5:13:35 PM ETare already advancing with customers engaged

5:13:35 PM ETway ahead of our initial expectations

5:13:41 PM ETbroader capability. We expect attractive returns with short payback period, as I said.

5:13:41 PM ETthe dc block gives us a practical starting point

5:13:41 PM ETto build a broader capability

5:13:47 PM ETsharing now is going to take you through our financial performance. Thank you, Jim, and hello.

5:13:47 PM ETwe expect attractive returns with short payback period as i said

5:13:47 PM ETsherry now is going to take you through our financial performance

5:13:53 PM EThello, everyone. Our third quarter results reflect the deliberate actions we're taking to improve profit.

5:13:53 PM ETthank you jim and hello everyone

5:13:53 PM ETour third quarter results reflect the deliberate

5:13:59 PM ETprofitability and deliver consistent financial returns. Our increase seemed like the end.

5:13:59 PM ETactions we're taking to improve profitability

5:13:59 PM ETand deliver consistent financial returns

5:14:05 PM ETindustrial system, coupled with strong vehicle sales and auto adjacency performance.

5:14:05 PM ETour increasingly fit industrial system

5:14:05 PM ETcoupled with strong vehicle sales

5:14:05 PM ETand auto adjacency performance

5:14:11 PM ETenabled adjusted e-bic growth of 3%, despite 2% lower revenue.

5:14:11 PM ETenable adjusted ebit growth of three percent

5:14:11 PM ETdespite two percent lower revenue

5:14:17 PM ETAs we sunset products like Scape and Corsair to transition the Louisville Assembly plant for the all-new.

5:14:17 PM ETas we sunset products like escape and coursera

5:14:23 PM ETall-new fathom. Sequentially, revenue at $49.5 billion in a

5:14:23 PM ETto transition the louisville assembly plant for the all new fathom

5:14:23 PM ETsequentially

5:14:23 PM ETrevenue at forty nine point five billion dollars

5:14:29 PM ETadjusted EBIT at 2.7 billion were both higher, despite being impacted by a short term.

5:14:29 PM ETand adjusted ebit at two point seven billion

5:14:29 PM ETwere both higher

5:14:35 PM ETshort-term supply or disruption late in the quarter, we also generated 4.7 billion.

5:14:35 PM ETdespite being impacted by a short term supplier disruption

5:14:35 PM ETlate in the quarter

5:14:41 PM ETbillion in company adjusted free cash flow and Q3 and end of the quarter with 25.3.

5:14:41 PM ETwe also generated four point seven billion

5:14:41 PM ETin company adjusted free cash flow in q three

5:14:47 PM ET25.3 billion in cash and 46.4 billion in total liquidity. Maintaining our commitment.

5:14:47 PM ETand ended the quarter with twenty five point three billion dollars in cash

5:14:47 PM ETand forty six point four billion dollars in total liquidity

5:14:53 PM ETto a strong investment grade rating and to returning capital to shareholders. Today,

5:14:53 PM ETmaintaining our commitment to a strong investment grade rating

5:14:53 PM ETinto returning capital to shareholders

5:14:59 PM ETwe announced a fourth quarter regular dividend of 15 cents per share. This

5:14:59 PM ETtoday

5:14:59 PM ETwe announced a fourth quarter regular dividend

5:14:59 PM ETof fifteen cents per share

5:15:05 PM ETstrong performance reflects the underlying quality of the sales accomplishments Jim mentioned, is well.

5:15:05 PM ETthis strong performance reflects the underlying quality of the

5:15:05 PM ETsales accomplishments jim mentioned

5:15:11 PM ETas well as our progress toward a leaner

5:15:11 PM ETmore fit industrial system

5:15:11 PM ETwell as our progress toward a leaner, more fit industrial system. We continue to see.

5:15:17 PM ETmixed strength in trucks and three-roll SUVs. Our higher margin, off-road piachi.

5:15:17 PM ETwe continue to see mixed strength in trucks

5:15:17 PM ETand three row suvs

5:15:23 PM ETpassion products. It counted for about a quarter of our U.S. sales in Q3. Almost four.

5:15:23 PM ETour higher margin off road passion products

5:15:23 PM ETaccounted for about a quarter of our us sales in q three

5:15:29 PM ETfour points from a year ago. And our customers have been resilient amid higher fuel prices.

5:15:29 PM ETup almost four points from a year ago

5:15:29 PM ETand our customers have been resilient

5:15:29 PM ETamid higher fuel prices

5:15:35 PM ETinterest rates, and inflation. We also continue to deliver efficiencies of.

5:15:35 PM ETinterest rates

5:15:35 PM ETand inflation

5:15:41 PM ETacross the business, including the use of AI in our business segments and throughout our operations.

5:15:41 PM ETwe also continue to deliver efficiencies across the business

5:15:41 PM ETincluding the use of ai

5:15:47 PM EToperations. These actions, together with our industrial improvements, have helped.

5:15:47 PM ETin our business segments and throughout our operations

5:15:47 PM ETthese actions together with our industrial improvements

5:15:53 PM EThave helped us absorb the vast majority of headwinds

5:15:53 PM EThelped us absorb the vast majority of headwinds from the Middle East conflict in rising commodity costs.

5:15:53 PM ETfrom the middle east conflict

5:15:59 PM ETcosts. It is this discipline and operational rigor that is taking root across.

5:15:59 PM ETand rising commodity costs

5:15:59 PM ETit is this discipline and operational rigor

5:16:05 PM ETacross board. In fact, it is directly benefiting our next generation product pipeline where we're

5:16:05 PM ETthat is taking root across board

5:16:05 PM ETin fact it is directly benefiting our next generation product pipeline

5:16:11 PM ETmaking real progress in improving the cost phase across our products. In addition,

5:16:11 PM ETwhere we're making real progress

5:16:11 PM ETimproving the cost base across our products

5:16:17 PM ETaddition, the traction and warranty of material cost improvement is strong again this year.

5:16:17 PM ETin addition

5:16:17 PM ETthe traction in warranty and material cost improvement is strong again this year

5:16:23 PM ETBoth were lower in the quarter and year to date. Keeping us firmly on plan towards reducing.

5:16:23 PM ETboth were lower in the quarter

5:16:23 PM ETand year to date

5:16:23 PM ETkeeping us firmly on plan

5:16:29 PM ETreducing these costs by $1 billion this year, excluding nobels and tariffs.

5:16:29 PM ETtowards reducing these costs

5:16:29 PM ETby one billion dollars this year

5:16:29 PM ETexcluding novelis and tariffs

5:16:35 PM ETAnd we are leveraging these reductions to fund our investments in a universal ED platform.

5:16:35 PM ETand we are leveraging these reductions to fund our investments

5:16:41 PM ETand Ford Energy. On New Gelis, operationally, the recovery is.

5:16:41 PM ETin the universal ev platform

5:16:41 PM ETand ford energy

5:16:41 PM ETon novelis

5:16:41 PM EToperationally

5:16:47 PM ETis largely behind us. Financially, we have incurred about one billion dollars in novellas related.

5:16:47 PM ETthe recovery is largely behind us

5:16:47 PM ETfinancially

5:16:53 PM ETrelated temporary cost shared at eight, with some more to go into four. And we are still tracking.

5:16:53 PM ETwe have incurred about one billion dollars in novelis related temporary costs year to date

5:16:53 PM ETwith some more to go in q four

5:16:59 PM ETtracking to a net tailwind of about one billion dollars in twenty twenty-six.

5:16:59 PM ETand we are still tracking to a net tailwind of about one billion dollars

5:16:59 PM ETin twenty twenty six

5:17:05 PM ETnow let's turn to our segment results

5:17:05 PM ETNow, let's turn to our segment results. In Fort Blue, we delivered 27.

5:17:05 PM ETin ford blue

5:17:11 PM ET27.1 billion of revenue and 1.4 billion in EBIT down 3% in 10%.

5:17:11 PM ETwe delivered twenty seven point one billion dollars of revenue

5:17:11 PM ETand one point four billion in ebit

5:17:17 PM ETrespectively. Our performance primarily reflects lower volume driven by.

5:17:17 PM ETdown three percent and ten percent respectively

5:17:17 PM ETour performance primarily reflects

5:17:17 PM ETlower volume

5:17:23 PM ETby product discontinuations and the impact to the Middle East conflict within the region and higher commodity.

5:17:23 PM ETdriven by product discontinuations and the impact of the middle east

5:17:23 PM ETconflict within the region

5:17:29 PM ETcommodity costs. Our underlying business continues to benefit from favorable mix. We see

5:17:29 PM ETand higher commodity costs

5:17:29 PM ETour underlying business continues to benefit from favorable mix

5:17:35 PM ETsaw significant year-to-date demand in the U.S. for Explorer with the higher margin tremor.

5:17:35 PM ETwe saw significant year to date demand in the us for explore

5:17:41 PM ETPlatinum series, increasing sales by nearly 60%. F-Ceres could.

5:17:41 PM ETwith the higher margin tremor and platinum series

5:17:41 PM ETincreasing sales by nearly sixty percent

5:17:47 PM ETperformed well as we executed a discipline go-to-market approach that yielded the highest.

5:17:47 PM ETf series performed well

5:17:47 PM ETas we executed a disciplined go to market approach

5:17:53 PM ETshare of revenue and lowest incentive to spend in the third quarter. Blinken also had.

5:17:53 PM ETthat yielded the highest share of revenue

5:17:53 PM ETand lowest incentive spend in the third quarter

5:17:59 PM ETan impressive quarter with both Nautilus and Aviator experiencing double-digit sales growth.

5:17:59 PM ETlincoln also had an impressive quarter

5:18:05 PM ETgrowth in the US. Our stock bubbles are healthy. We ended the quarter.

5:18:05 PM ETwith both nautilus and aviator experiencing double digit sales growth

5:18:05 PM ETin the u s

5:18:05 PM ETour stock levels are healthy

5:18:11 PM ETslightly below our target range of 55 to 65 retail days supply.

5:18:11 PM ETwe ended the quarter slightly below our target range of fifty five

5:18:11 PM ETto sixty five retail days supply

5:18:17 PM ETincreased gross stocks by about six percent versus Q2 2026.

5:18:17 PM ETand we increased gross stocks by about six percent

5:18:17 PM ETversus q two twenty twenty six

5:18:23 PM ETOur F-150 inventory and proof quarter over quarter to 49 retail days supply.

5:18:23 PM ETour f one fifty inventory improved quarter over quarter to

5:18:23 PM ETforty nine retail days supply

5:18:29 PM ETstill below our DL range, which provides us with upside. As we work to restock, to

5:18:29 PM ETthough it's still below our ideal range

5:18:29 PM ETwhich provides us with upside as we work to restock

5:18:35 PM ETtarget levels. Overall, we expect stocks to return within our targeted levels.

5:18:35 PM ETto target levels

5:18:41 PM ETlevels, I yearned. For Model E, we improved EBIT by 25%.

5:18:41 PM EToverall we expect stocks to return within our targeted levels

5:18:41 PM ETby year end

5:18:41 PM ETfor model e

5:18:47 PM ET25% year over year in the quarter. We reported an EBIT loss of 1.1 billion on revenue.

5:18:47 PM ETwe improved ebit by twenty five percent year over year in the quarter

5:18:47 PM ETwe reported an ebit loss of one point one billion

5:18:53 PM ETrevenue of 1.2 billion. These results reflect our focus on capital efficiency in starting.

5:18:53 PM ETon revenue of one point two billion

5:18:53 PM ETthese results reflect our focus on capital efficiency

5:18:59 PM ETstructural cost reductions, as we realize the benefits from right-sizing our Gen 1 volumes.

5:18:59 PM ETand structural cost reductions

5:18:59 PM ETas we realize the benefits from rightsizing our gen one volumes

5:19:05 PM ETwe continue to invest in our UED platform and port energy. We are on trade.

5:19:05 PM ETwhile we continue to invest in our uev platform

5:19:05 PM ETand ford energy

5:19:11 PM ETtrack to improve Gen 1 EBIT by approximately 40% year over year in 2020.

5:19:11 PM ETwe are on track to improve gen one ebit

5:19:11 PM ETby approximately forty percent

5:19:17 PM ET2026, is we balance production and pricing with natural demand.

5:19:17 PM ETyear over year in twenty twenty six

5:19:17 PM ETas we balance production and pricing

5:19:17 PM ETwith natural demand

5:19:23 PM ETIn fact, in Q3, Mustang Maki had the lowest incentive spend since 2010.

5:19:23 PM ETin fact

5:19:23 PM ETin q three mustang mach e had the lowest incentive spend

5:19:29 PM ET2023. Importantly, we are still targeting break even by 2023.

5:19:29 PM ETsince twenty twenty three

5:19:29 PM ETimportantly we are still targeting breakeven

5:19:35 PM ET29. Ford Pro delivered another solid quarter, with

5:19:35 PM ETby twenty twenty nine

5:19:35 PM ETford pro delivered another solid quarter

5:19:41 PM ET17.8 billion of revenue, up 2%. Despite wholesale volumes being down.

5:19:41 PM ETwith seventeen point eight billion of revenue

5:19:41 PM ETup two percent

5:19:47 PM ETdown 4%, pro-Ebit was 1.7 billion down 16%.

5:19:47 PM ETdespite wholesale volumes being down

5:19:47 PM ETfour percent

5:19:47 PM ETpro ebit was one point seven billion down sixteen percent

5:19:53 PM ETprimarily due to higher commodities and temporary costs associated with the Oakville launch.

5:19:53 PM ETprimarily due to higher commodities

5:19:53 PM ETin temporary costs associated with the oakville launch

5:19:59 PM ETLower tariffs and favorable product mix, driven by higher truck production as we were coming.

5:19:59 PM ETlower tariffs and favorable product mix

5:20:05 PM ETfrom novellas, partially offset these headwinds. 2027 model your

5:20:05 PM ETdriven by higher truck production as we recover from novelis

5:20:05 PM ETpartially offset these headwinds

5:20:11 PM ETsignals are favorable. As most commercial agreements are complete, with both leek demand and

5:20:11 PM ETtwenty twenty seven model year signals are favorable

5:20:11 PM ETas most commercial agreements are complete

5:20:17 PM ETwith both fleet demand and pricing

5:20:17 PM ETand pricing in line with our expectations. Ford Credit delivered a

5:20:17 PM ETin line with our expectations

5:20:17 PM ETford credit

5:20:23 PM ETa great quarter with EBT of 803 million, up 172 million.

5:20:23 PM ETdelivered a great quarter

5:20:23 PM ETwith ebt of eight zero three million

5:20:29 PM ETmillion. These results reflect favorable performance on our derivatives. Healthy finance.

5:20:29 PM ETup one hundred and seventy two million

5:20:29 PM ETthese results

5:20:29 PM ETreflect favorable performance on our derivatives

5:20:35 PM ETfinancing margins in a supported use vehicle pricing environment. Our hike was.

5:20:35 PM EThealthy financing margins

5:20:35 PM ETand a supportive used vehicle pricing environment

5:20:41 PM EThigh-quality portfolio of offerings across board credit remains resilient, and we maintain a consistent.

5:20:41 PM ETour high quality portfolio of offerings

5:20:41 PM ETacross board credit remains resilient

5:20:47 PM ETconsistent, disciplined approach to risk management. Jim talked earlier about.

5:20:47 PM ETand we maintain a consistent

5:20:47 PM ETdisciplined approach to risk management

5:20:53 PM ETabout the record quarter for software services and parts, I'd like to double-click on that.

5:20:53 PM ETjim talked earlier about the record quarter for

5:20:53 PM ETsoftware services and parts

5:20:53 PM ETi'd like to double click on that

5:20:59 PM ETThese auto-adjacent businesses were significant drivers of the quarter's strong performance.

5:20:59 PM ETthese auto adjacent businesses were significant drivers of the

5:20:59 PM ETstrong performance

5:21:05 PM ETcontributing approximately 10% of the quarter's revenue. Yes, strong margins.

5:21:05 PM ETcontributing approximately ten percent

5:21:05 PM ETof the quarter's revenue

5:21:11 PM ETmargins. The largest contributors to software services, revenue growth in the quarter.

5:21:11 PM ETat strong margins

5:21:11 PM ETthe largest contributors to software services revenue growth in the quarter

5:21:17 PM ETand year to date. We're blue crews and connectivity. And we continue to see momentum.

5:21:17 PM ETand year to date

5:21:17 PM ETwere bluecruise

5:21:17 PM ETin connectivity

5:21:23 PM ETmomentum in Ford Pro Intelligence. Parts revenue growth this year has been drained.

5:21:23 PM ETand we continue to see momentum

5:21:23 PM ETin ford pro intelligence

5:21:29 PM ETdriven by double-digit growth in our U.S. wholesale channel and the expansion of our research.

5:21:29 PM ETparts revenue growth this year

5:21:29 PM EThas been driven by double digit growth

5:21:29 PM ETin our us

5:21:29 PM ETwholesale channel

5:21:35 PM ETretail and wholesale businesses in Europe. We are also increasing dealer service retail.

5:21:35 PM ETand the expansion of our retail

5:21:35 PM ETwholesale businesses in europe

5:21:41 PM ETretention with digital and uptime tools to drive organic parts growth.

5:21:41 PM ETwe are also increasing dealer service retention

5:21:41 PM ETwith digital and uptime tools

5:21:41 PM ETto drive organic parts growth

5:21:47 PM ETWe are excited about the prospects these auto adjacent sees offer for continued accretive.

5:21:47 PM ETwe are excited about the prospects

5:21:47 PM ETthese auto adjacencies offer

5:21:53 PM ETaccretive growth. Now, looking ahead to our full year 2026 outlook.

5:21:53 PM ETfor continued accretive growth

5:21:53 PM ETnow looking ahead to our full year twenty twenty six outlook

5:21:59 PM ETWe are confident in our full year trajectory, in our planned investment cadence.

5:21:59 PM ETwe are confident

5:21:59 PM ETour full year trajectory

5:21:59 PM ETour planned investment cadence

5:22:05 PM ETand now expect full year adjusted ebit

5:22:05 PM ETAnd now expect full year adjusted EBIT between 10 and a half billion to 11 billion dollars.

5:22:05 PM ETbetween ten and a half billion

5:22:11 PM ETdollars. A just in free cash flow and capital expenditures are unchanged. At 6 billion.

5:22:11 PM ETto eleven billion dollars

5:22:11 PM ETadjusted free cash flow

5:22:11 PM ETand capital expenditures are unchanged

5:22:17 PM ETbillion to seven billion, and nine and a half billion to ten and a half billion, respectively. Our guys.

5:22:17 PM ETit's six billion dollars to seven billion

5:22:17 PM ETand nine point five billion dollars to ten point five billion dollars respectively

5:22:23 PM ETguidance does not include potential impacts of a significant escalation in the Middle East or a material downturn in the.

5:22:23 PM ETour guidance does not include potential impacts

5:22:29 PM ETof a significant escalation in the middle east or a material downturn in the us economy

5:22:29 PM ETthe U.S. economy, which, if either or both occurred, could have a substantial impact on industry demand.

5:22:29 PM ETwhich if either or both occurred could have a substantial impact on industry demand

5:22:35 PM ETFor our full year segment outlook, we expect more blue ebit of about five points.

5:22:35 PM ETfor our full year segment outlook

5:22:35 PM ETwe expect

5:22:35 PM ETford blue ebit

5:22:41 PM ET5.5 billion. Ford Pro Ebit of about 7 billion. Model E losses.

5:22:41 PM ETof about five point five billion

5:22:41 PM ETford pro ebit

5:22:41 PM ETof about seven billion

5:22:47 PM ETlosses remain unchanged at about four billion. And Ford Credit EBT updated.

5:22:47 PM ETmodel e losses remain unchanged at about four billion

5:22:47 PM ETand ford credit ebt

5:22:53 PM ETupdated to about two point eight billion dollars

5:22:53 PM ETupdated to about $2.8 billion. Our guidance now assumes a unique.

5:22:53 PM ETour guidance now assumes

5:22:59 PM ETU.S. SAR of 16.5 million units. Commodity headwinds are approaching to

5:22:59 PM ETa us sar of sixteen point five million units

5:23:05 PM ETtwo and a half billion dollars year over year. An increase of about 500 million.

5:23:05 PM ETcommodity headwinds approaching two and a half billion dollars year over year

5:23:05 PM ETan increase of about five hundred million

5:23:11 PM ETcontinue to see increasing pressure from input costs. In addition, higher fuel.

5:23:11 PM ETas we continue to see increasing pressure from input costs

5:23:11 PM ETin addition

5:23:17 PM ETprices are impacting our freight and energy costs. But notably, we are not seeing it impact customers.

5:23:17 PM EThigher fuel prices are impacting our freight and energy costs

5:23:23 PM ETcustomer demand for trucks and fleet vehicles at this point. We now expect full year.

5:23:23 PM ETbut notably we are not seeing it impact customer demand

5:23:23 PM ETfor trucks and fleet vehicles at this point

5:23:29 PM ETU.S. industry pricing to be about 100 basis points higher year over year, which is a

5:23:29 PM ETwe now expect full year us industry pricing

5:23:29 PM ETbe about a hundred basis points higher

5:23:29 PM ETyear over year

5:23:35 PM EThalf point higher than our previous assumption. And lastly, we continue to target one.

5:23:35 PM ETwhich is a half point higher than our previous assumption

5:23:35 PM ETand lastly

5:23:41 PM ETbillion dollars in material and warranty cost reductions, excluding novellas and here.

5:23:41 PM ETcontinue to target one billion dollars

5:23:41 PM ETin material and warranty cost reductions

5:23:47 PM ETtear-ups. In summary, our ability to increase profits in Q3.

5:23:47 PM ETexcluding novelis and tariffs

5:23:47 PM ETin summary

5:23:53 PM ETour ability to increase profits in q three

5:23:53 PM ETreflects the actions we have taken

5:23:53 PM ETreflects the actions we have taken to optimize our product portfolio and create a business.

5:23:53 PM ETto optimize our product portfolio

5:23:59 PM ETbusiness that is more efficient and agile in the face of increasing cost pressures.

5:23:59 PM ETand create a business that is more efficient

5:23:59 PM ETand agile in the face of increasing cost pressures

5:24:05 PM ETintensified global competition

5:24:05 PM ETintensify global competition, in an uncertain macroeconomic environment. I'll now turn it back over to.

5:24:05 PM ETan uncertain macroeconomic environment

5:24:11 PM ETto Jim to provide some commentary on 2027. Thank you, Sharon. At this point, we're talking.

5:24:11 PM ETi'll now turn it back over to jim to provide some commentary on twenty twenty seven

5:24:11 PM ETthank you sherry

5:24:17 PM ETtargeting profitability next year to be roughly in line with this year. With an even stronger automotive.

5:24:17 PM ETat this point we're targeting profitability next year to be roughly in line with this year

5:24:23 PM ETautomotive business that enables us to invest in our future. Our outlook reflects three things.

5:24:23 PM ETwith an even stronger automotive business

5:24:23 PM ETthat enables us to invest in our future

5:24:29 PM ETour outlook reflects three things investing in future growth

5:24:29 PM ETthree things: investing in future growth, substantial external cost pressures.

5:24:35 PM ETand continued operating improvements. Next year will be a foundational year.

5:24:35 PM ETsubstantial external cost pressures

5:24:35 PM ETand continued operational operating improvements

5:24:41 PM ETyear on our journey to 8%. When we will have refreshed 70%.

5:24:41 PM ETnext year will be a foundational year on our journey to eight percent

5:24:47 PM ETof our global portfolio of vehicles by volume. We are allocating the majority of that industry.

5:24:47 PM ETwhen we will have refreshed

5:24:47 PM ETseventy percent of our global portfolio of vehicles

5:24:53 PM ETinvestment to North America, where we will be expanding our truck and utility lineup.

5:24:53 PM ETby volume we are allocating majority of that investment to north america

5:24:53 PM ETwhere we will be expanding our truck and utility lineup

5:24:59 PM ETadditionally ford pro will be expanding their global lineup

5:24:59 PM ETAdditionally, Ford Pro will be expanding their global lineup for transit and ranger with all.

5:25:05 PM ETall new price points. Additionally, we are investing in our plants.

5:25:05 PM ETfor transit arranger with all new price points

5:25:11 PM ETfor our new F-150, which will require planned production downtime next year.

5:25:11 PM ETadditionally we are investing in our plants

5:25:11 PM ETfor our new f-one hundred fifty which will require

5:25:11 PM ETplanned production downtime next year

5:25:17 PM ETexpect the added super duty capacity at Oakville will largely offset the impact of that down time.

5:25:17 PM ETwe expect the added super duty capacity at oakville to largely offset

5:25:17 PM ETthe impact of that downtime

5:25:23 PM ETWe will also continue to grow our investments in the Universal Electric Vehicle platform ahead of fathers.

5:25:23 PM ETwe will also continue to grow our investments in the universal electric vehicle

5:25:29 PM ETFathom's launch and bring Fort Energy's 20 gigawatt hours of capacity online. Both of which.

5:25:29 PM ETplatform ahead of fathom's launch and bring ford energy's

5:25:35 PM ETwhich are key to the model E turnaround by 2029. In order to

5:25:35 PM ETtwenty gigawatt hours of capacity online both of which are key

5:25:35 PM ETto the model e turnaround by twenty twenty nine

5:25:41 PM ETadjacencies, we expect continued growth in software services and parts.

5:25:41 PM ETin auto adjacencies we expect continued growth

5:25:47 PM ETto increase the contribution from reoccurring and counter-cyclical revenues. This secreted.

5:25:47 PM ETin software services and parts

5:25:47 PM ETto increase the contribution from reoccurring and countercyclical revenues

5:25:53 PM ETgrowth should help offset certain macro headwinds we expect at Ford credit.

5:25:53 PM ETthis accretive growth

5:25:53 PM ETshould help offset certain macro headwinds we expect at ford credit

5:25:59 PM ETwe currently expect commodities

5:25:59 PM ETWe currently expect commodities, memory, and logistics costs to raise.

5:25:59 PM ETmemory

5:26:05 PM ETrepresent a year-over-year headwind of about two billion dollars at Ford. Our current plan.

5:26:05 PM ETlogistics costs to represent a year over year headwind

5:26:05 PM ETof about two billion dollars at ford

5:26:11 PM ETplan is that the improved reliability and capability of our industrial system. Together, we

5:26:11 PM ETour current plan is that the improved reliability and capability

5:26:11 PM ETof our industrial system

5:26:17 PM ETwith revenue optimization and a company-wide efficiency on costs.

5:26:17 PM ETtogether with revenue optimization

5:26:23 PM ETwill allow us to offset the expected headwinds that I just walked through. We intend to finish this year.

5:26:23 PM ETand a company wide efficiency on cost

5:26:23 PM ETwill allow us to offset

5:26:23 PM ETthe expected headwinds that i just walked through

5:26:29 PM ETwe intend to finish this year strong executed twenty seven

5:26:29 PM ETthis year strong, execute a 27, with great profit bill when he investments, and with this.

5:26:35 PM ETwith great profitability investments and with discipline

5:26:35 PM ETdiscipline to build towards that target of 8% adjusted to eBay by 29. I'd like to take your questions.

5:26:35 PM ETto build towards that target of eight percent adjusted ebit by twenty nine

5:26:41 PM ETwe'd like to take your questions now

5:26:41 PM ETnow. You would like to ask a question, please use the red.

5:26:47 PM ETrays here in chin, which can be found on the black bar at the bottom of your screen. Leave time for as many questions as

5:26:47 PM ETwhich can be found on the black bar at the bottom of your screen

5:26:53 PM ETto leave time for as many questions as possible please limit to one question

5:26:53 PM ETas possible. Please limit to one question. Your first question comes from the line of Radio.

5:26:59 PM ETyour first question comes from the line of rajat gupta

5:26:59 PM ETwith jpmorgan please unmute and ask your question

5:27:03 PM ETRoger Gupta with JP Morgan. Please unmute and ask your question. Great, thanks to Nicole.

5:27:05 PM ETgreat thanks for taking the questions and and appreciate all the color

5:27:05 PM ETon twenty twenty seven

5:27:05 PM ETquestions and appreciate all the color on 2027. Assuming, you know, you know.

5:27:11 PM ETi mean assuming you know you know the commodities logistics

5:27:11 PM ETyou know the memory headwinds you know

5:27:11 PM ETthe commodities, logistics, the memory headwinds, stay where they are.

5:27:17 PM ETyou know stay where they are right now you know at the two billion guide

5:27:17 PM ETare right now, you know, and the two bullion died. I'm just curious, you know, how much of the 2020?

5:27:23 PM ETjust curious you know how much of the twenty twenty seven offset

5:27:23 PM ETstack you know that you have pointed to

5:27:23 PM ET2027 offset stack that you're pointing to is within your controls.

5:27:29 PM ETis within your control today you know how much is

5:27:29 PM ETtoday. How much of that do you still need to work on? Just because a lot of the inflation has happened.

5:27:35 PM ETmuch of that you still need to work on just because a lot of the inflation has happened in the last

5:27:35 PM ETin the last three, four months. Just curious to get your thoughts on that, and like how comfortable you are with that.

5:27:35 PM ETthree four months just curious to get your thoughts on that on like how comfortable

5:27:41 PM ETyou are with that twenty seven guide and what more needs to be done to get there

5:27:41 PM ETthat 27 guide, and what more needs to be done to get there? And have a quick follow-up. Thanks.

5:27:41 PM ETi have a quick follow-up thanks

5:27:47 PM ETyeah sure thank you so much for your question

5:27:47 PM ETYeah, sure. Thank you so much for your question. I would say that the areas that we see.

5:27:53 PM ETi would say that the areas that we see more in our control would be

5:27:53 PM ETthe areas of revenue optimization

5:27:53 PM ETmore in our control would be the areas of revenue optimization. Continued side.

5:27:59 PM ETcontinued software in parts growth

5:27:59 PM ETsoftware in parts of the growth, and also continued savings as well.

5:28:05 PM ETand also continued savings as well

5:28:05 PM ETand i can give you a little bit more

5:28:05 PM ETI can give you a little bit more color on that too, if that would be helpful. I mean, on the market.

5:28:11 PM ETcolor on that too if that would be helpful

5:28:11 PM ETi mean on the market equation side as you know mix optimization is

5:28:11 PM ETmarket equation side, as you know, mixed optimization is something where we have made huge progress this year.

5:28:17 PM ETsomething where we have made huge progress this year and we

5:28:17 PM ETexpect that progress to continue into next year we have transformed our sales

5:28:17 PM ETand we expect that progress to continue into next year. We have transformed our sales and operating plan.

5:28:23 PM ETand operating plan and are now leveraging ai tools

5:28:23 PM ETplan, and are now leveraging AI tools that are enabled us to match demand, sensing the capacity plan.

5:28:29 PM ETthat are enabling us to match demand sensing to capacity planning

5:28:29 PM ETand that's leading to more production stability which leads to real savings

5:28:29 PM ETplanning, and that's leading to more production stability, which leads to real savings. We also have

5:28:35 PM ETwe also have better inventory and pricing models for both vehicle

5:28:35 PM ETbetter inventory and pricing models for both vehicles and parts, and that's leading to faster.

5:28:41 PM ETand parts and that's leading to faster turn rates and leaner stocks

5:28:41 PM ETturn rates and leaner stocks. In just an overall disciplined approach in management of our market equation.

5:28:47 PM ETin just an overall disciplined approach in management of our market equation

5:28:47 PM ETso that is gonna be an area that's in our control we're continuing to get better through

5:28:47 PM ETequation. So that is going to be an area that's in our control. We're continuing to get better through tech modernization.

5:28:47 PM ETtech modernization

5:28:53 PM ETon the structural cost side we're already working plans

5:28:54 PM ETOn the structural cost side, we're already working plans. We've been at this for six months.

5:28:59 PM ETwe've been at this for six months already going into

5:28:59 PM ETmonths already going into 2027. And in fact, we're already looking ahead in populating properties.

5:29:05 PM ETtwenty twenty seven and in fact we're already looking ahead in populating

5:29:05 PM ETprofit improvement actions for both twenty eight and twenty nine as well

5:29:05 PM ETprofit improvement actions for both 28 and 29 as well. And then, as I said, we're going to continue.

5:29:11 PM ETand then as i said we're gonna continue to see we believe

5:29:11 PM ETcontinue to see we believe increased revenues in both the software.

5:29:17 PM ETincreased revenues in both the software and the parts

5:29:17 PM ETgrowth area and as i just mentioned in my my comments here a moment ago

5:29:17 PM ETthe parts growth area. And as I just mentioned in my comments here a moment ago, we've now seen.

5:29:23 PM ETwe've now seen those combined you know representing ten percent of our revenues

5:29:23 PM ETseen those combined, you know, representing 10% of our revenues at accretive growth margins. So this is

5:29:29 PM ETat accretive growth margins so this is an area that

5:29:29 PM ETis in our control areas that we're focused on and we're

5:29:29 PM ETarea that is in our control areas that we're focused on, and we're seeing the benefits.

5:29:35 PM ETseeing the benefits of that

5:29:35 PM ETto stabilize our returns in the face of things like

5:29:35 PM ETthat. To stabilize our returns in the face of things like commodities in an uncertain manner.

5:29:41 PM ETcommodities in an uncertain macro environment

5:29:41 PM ETi would i would only add that

5:29:41 PM ETmacro environment. I would only add that our days should.

5:29:47 PM ETour day supply on f one fifty and super duty

5:29:47 PM ETsupply on F-150 and super duty is a major accomplishment.

5:29:47 PM ETis a major

5:29:53 PM ETaccomplishment compared to our competitors it's real we're going into twenty

5:29:53 PM ETAccomplishment compared to our competitors. It's real, we're going into 27, as Sherry said in her speech, and a real

5:29:59 PM ETseven as sherry said in her speech in a really good situation in our truck business

5:29:59 PM ETreally good situation in our truck business. I'm good. That's very helpful.

5:30:05 PM ETunderstood that's very helpful color

5:30:05 PM ETand then just on uev you know with the deliveries expected next year

5:30:05 PM EThelpful color. And then, just on UEV, you know, with the deliveries expected next year.

5:30:11 PM ETjust curious what remains to be derisked

5:30:11 PM ETI'm just curious what remains to be de-risked. Between now and Launch, you know, when it comes to supply risk.

5:30:17 PM ETbetween now and launch you know when it comes to supplier readiness

5:30:17 PM ETsoftware validation you know just battery cost

5:30:17 PM ETreadiness, software validation, you know, just battery costs. You know, how much of the bats do?

5:30:23 PM ETyou know how much of the path to the modeling breakeven depends

5:30:23 PM ETto the modeling break-even defends on UAV, hitting its volume and

5:30:29 PM ETon uev hitting its volume and cost targets on schedule

5:30:29 PM ETthanks

5:30:29 PM ETboss targets on schedule. Next. Hey, this is Kumara.

5:30:35 PM EThey this is kumar let me give you some

5:30:35 PM ETcolor on the status of the launch

5:30:35 PM ETit's progressing very well

5:30:35 PM ETLet me give you some color on the status of the launch. It's progressing very well.

5:30:41 PM ETninety percent of the validation testing has been completed

5:30:41 PM ET90% of the validation testing has been completed. We've built our

5:30:47 PM ETwe've built our first production line vehicles

5:30:47 PM ETon at louisville assembly plant

5:30:47 PM ETbuilt our first production line vehicles on at Lugo Assembly plant. So we start.

5:30:53 PM ETso we're starting to prove out our production processes

5:30:53 PM ETstarting to prove out our production processes. One of the new technologies for fair.

5:30:59 PM ETone of the key new technologies for fathom is

5:30:59 PM ETunicastings

5:30:59 PM ETFaraday is unicastings. We've already produced 5,000 of them, so we're proving it.

5:31:05 PM ETwe've already produced five thousand of them

5:31:05 PM ETso we're proving out our capability to run at rate and that's gone really well

5:31:05 PM ETout our capability to run at rate, and that's done really well. And to be specific about

5:31:11 PM ETand to be specific about your question on what risk remains

5:31:11 PM ETto be mitigated it's primarily in the supply base

5:31:11 PM ETabout your question on what risk remains to be mitigated, it's primarily in the supply base. We need to make sure.

5:31:17 PM ETwe need to make sure that the supply base can run at great

5:31:17 PM ETsure that the supply base can run at rate with high-quality parts. And that's very normal.

5:31:23 PM ETwith high quality parts and that's very normal at this

5:31:23 PM ETthis stage of the launch and that's what we're going to be working on for the next few months

5:31:23 PM ETnormal at this stage of the launch, and that's what we're going to be working on for the next few months.

5:31:29 PM ETthe other element of the fathom launch is critical is

5:31:29 PM ETThe other element of the Fathom launch is critical is the revenue picture, which actually seems to be strengthened.

5:31:35 PM ETthe revenue picture which actually seems to be strengthening andrew do you wanna

5:31:35 PM ETstrengthening. Andrew, do you want to highlight the change in the US EV market and how that relates to the profitable?

5:31:41 PM ETto highlight the change in the u s market

5:31:41 PM ETand how that relates to the profitability modeling

5:31:41 PM ETprofitability modeling. Yeah, I mean, the market, as we've learned over the last couple years, is definitely.

5:31:47 PM ETi mean the market as we've learned over the last couple of years is definitely

5:31:47 PM ETin the us specifically is not acting as a monolith especially when it comes to the

5:31:47 PM ETdefinitely in the U.S. specifically, not acting as a monolith, especially when it comes to the

5:31:53 PM ETaffordable evs we've actually seen

5:31:53 PM ETaffordable EVs, we've actually seen EV prices go up about 10%.

5:31:59 PM ETwhich has priced a lot of new vehicles out of the affordable market. So the customer is very limited.

5:31:59 PM ETev prices go up about ten percent

5:31:59 PM ETwhich has priced a lot of new vehicles out of the affordable market so the customer

5:32:05 PM ETis very limited with their new vehicle options in fact a lot of them are looking to the

5:32:05 PM ETlimited with their new vehicle options. In fact, a lot of them are looking to the used market. So we're now looking at the Evie market.

5:32:11 PM ETused market so we're now looking at the ev market as new and used

5:32:11 PM ETwe're about

5:32:11 PM ETmarket as new and used. We're about over half now of the vehicles sold under 40.

5:32:17 PM ETover half now of the vehicles sold under forty thousand are used vehicles

5:32:17 PM ET40,000 are used vehicles. That's really important because, as you said, Jim, the fathoms.

5:32:23 PM ETthat's really important because as you said jim the fathom starting msr

5:32:23 PM ETis at twenty eight thousand three hundred fifty dollars that's going to be right in the heart of the market

5:32:23 PM ETstarting MSRP is at 28,350. That's going to be right in the heart of the market. And it's not just the easy.

5:32:29 PM ETand it's not just the ev market it's actually opening us up to the

5:32:29 PM ETa massive total addressable market

5:32:29 PM ETmarket, it's actually opening us up to the massive total addressable market. Um, if you

5:32:35 PM ETif you know that nearly fifty percent

5:32:35 PM ETIf you know that nearly 50% of the U.S. new vehicle industry transactions.

5:32:41 PM ETof the u s new vehicle industry transacts under forty thousand dollars so

5:32:41 PM ETtransacts under $40,000. So not only do we expect fathom for the reasons you mentioned earlier to attract new and

5:32:47 PM ETnot only do we expect fathom for the reasons you mentioned earlier to

5:32:47 PM ETattract new and used ev buyers

5:32:47 PM ETbut also ice

5:32:47 PM ETused EV buyers, but also hybrid customers, especially because we're going to have much lower options.

5:32:53 PM EThybrid customers especially because we're going to have much lower operating

5:32:53 PM ETcosts than even a mainstream hybrid vehicle so

5:32:53 PM EToperating costs than even a mainstream pyramid vehicle. So the customer response on what we've shared so far.

5:32:59 PM ETthe customer response on what we've shared so far has been really strong

5:32:59 PM ETwe're preparing for the launch and we'll be

5:32:59 PM ETfar has been really strong. We're preparing to the launch, and we'll be launching our pre-order program.

5:33:05 PM ETlaunching our pre order program

5:33:05 PM ETin the first quarter and we'll have more to share with everyone at that time

5:33:05 PM ETprogram in the first quarter, and we'll have more to share with everyone at that time.

5:33:11 PM ETas we get closer feeling pretty good about the industrial preparation and the revenue picture

5:33:11 PM ETit's impressive to me

5:33:11 PM ETindustrial preparation and the revenue picture. It's impressive to me to see that.

5:33:17 PM ETto see that the used the ev market is

5:33:17 PM ETabove eight percent of the u s industry now

5:33:18 PM ETthat the used the EV market is above 8% of the U.S. industry now.

5:33:23 PM ETand that's including all the issues

5:33:23 PM ETAnd that's including all the issues that Andrew just highlighted and the lack of affordability.

5:33:29 PM ETthat andrew just highlighted and the lack of affordability options so

5:33:29 PM ETi think we're

5:33:29 PM ETyou know

5:33:29 PM EToptions. So I think we're, you know, it's a lot of work to be still to be done.

5:33:35 PM ETit's a lot of work to be still be done we have a year to go

5:33:35 PM ETi think we're positioned really well

5:33:35 PM ETWe have a year to go. And I think we're positioned really well, which will be one of the two big drivers.

5:33:41 PM ETwhich will be one of the two big drivers turning around model e

5:33:41 PM ETthe vehicle side of model e

5:33:41 PM ETdrivers turning around Model E, the vehicle side of Mahali.

5:33:47 PM ETthank you

5:33:47 PM ETThank you. As a reminder, we ask that you limit yourself to one question.

5:33:53 PM ETas a reminder we ask that you limit yourself to one question

5:33:53 PM ETyour next question will come from emmanuel rosner with wolfe research

5:33:53 PM ETplease unmute and ask your question

5:33:53 PM ETYour next question will come from Emmanuel Rosner with Bull of Research. Please unmute and ask your question.

5:33:59 PM ETgreat great thank you so much

5:33:59 PM ETGreat, great, thank you so much. Maybe just following up here on Model A E.

5:34:05 PM ETmaybe just following up here on model e so

5:34:05 PM ETi know for twenty twenty seven overall for the company's

5:34:05 PM ETSo I know for 2027 overall for the company's stable results versus 2026.

5:34:11 PM ETstable results versus twenty twenty six are you still looking to

5:34:11 PM ETAre you still looking to improve Model E within that E bit?

5:34:17 PM ETimprove model e within that ebit

5:34:17 PM ETand maybe what are the moving pieces within that are you planning similar

5:34:17 PM ETAnd maybe what are the moving pieces within that? Are you planning similar or higher investment?

5:34:23 PM ETor higher investments into this

5:34:23 PM ETuev and bss and then

5:34:23 PM ETinvestment into this UEV and BSS. And then, you know, what are the drivers of

5:34:29 PM ETwhat are the drivers of improvement on the car

5:34:29 PM ETimprovement on the car side of the business?

5:34:29 PM ETside of the business

5:34:35 PM ETgreat

5:34:35 PM ETmanuel thank you so much for your questions so you just heard about the model e

5:34:35 PM ETGreat, Manuel, thank you so much for your questions. So, you just heard about the model operational steps that were.

5:34:41 PM EToperational steps that we're taking in the milestones there

5:34:41 PM ETwe're taking in the milestones there. From a financial perspective, as I said in my comments, we're working.

5:34:47 PM ETfrom a financial perspective as i said in my comments we're working towards our target

5:34:47 PM ETfor model a to reach breakeven by twenty twenty nine

5:34:47 PM ETworking towards our target model to reach break even by 2029. The progress isn't going to be linear, and we're now.

5:34:53 PM ETprogress isn't gonna be linear and we're now expecting higher

5:34:53 PM ETnow expecting higher expenses in 2027 as the plan's coming into focus. So, let me give you a little bit of.

5:34:59 PM ETexpenses in twenty twenty seven as the plan's coming into focus

5:34:59 PM ETof what we're seeing. We think that the next step function change in profitability is going to happen in.

5:34:59 PM ETlet me give you a little bit of what we're seeing we think that the next

5:35:05 PM ETstep function change in profitability is gonna happen in the

5:35:05 PM ETthe first half of 2028. As UEB and Ford Energy both bramp with rather.

5:35:05 PM ETfirst half of twenty twenty eight as uev and ford energy

5:35:11 PM ETboth ramp with revenue on both so if you break that down a bit

5:35:11 PM ETrevenue on both. So, if you break that down a bit, you're going to see Fadom launching towards the

5:35:17 PM ETyou're gonna see fathom launching you know towards the end of the year with the first derivative off the

5:35:17 PM ETthe end of the year with the first derivative off the platform. Then you're going to have that full year of production.

5:35:23 PM ETplatform then you're gonna have that full year of production in twenty twenty eight

5:35:23 PM ET2028. Then we're going to be escalating the Ford Energy business with investment, full year of.

5:35:29 PM ETthen we're gonna be escalating the ford energy business with investment

5:35:29 PM ETfull year production also by twenty twenty eight

5:35:29 PM ETproduction also by 2028. And then, new is the launch of the European partnership products.

5:35:35 PM ETproducts by 2028. So there will be investment in that in 2027.

5:35:35 PM ETand then new is the launch of the european partnership products by twenty twenty eight

5:35:35 PM ETso there will be investment in that in twenty twenty seven

5:35:41 PM ETin the full year of production on those will be

5:35:41 PM ETyear of production on those will be by 2029. So you're going to have those in.

5:35:47 PM ETby twenty twenty nine so you're gonna have those investments that are happening through

5:35:47 PM ETinvestments that are happening through 27 with the unlock really starting to unleash as you get.

5:35:53 PM ETtwenty seven with the unlock really starting to unleash as you get into

5:35:53 PM ETtwenty twenty eight and nine

5:35:53 PM ETget into 20, 20, 8, and 9.

5:35:59 PM ETYour next question comes from Tom Narion with RBC. He's a new.

5:36:05 PM ETyour next question comes from tom narayan with rbc

5:36:05 PM ETplease unmute and ask your question

5:36:05 PM EThi yeah thanks for taking the question my question has to do with

5:36:05 PM ETask your question. Hi, yeah, thanks for taking the question. My question has to do with Ford Blue in Europe.

5:36:11 PM ETford blue in europe

5:36:11 PM ETyou know china has about sixty million vehicles of auto production capacity it's

5:36:11 PM ETEurope. You know, China has about 60 million vehicles of auto production capacity.

5:36:17 PM ETconsuming about twenty million a year in

5:36:17 PM ETconsuming about 20 million a year and exporting 10 million. A decent portion going to Europe.

5:36:23 PM ETexporting ten million a decent portion going to europe

5:36:23 PM ETand then this has been worsened by weakening domestic sales in china

5:36:23 PM ETEurope and then this has been worsened by weakening domestic sales in China. And then you have a JV with Julian.

5:36:29 PM ETand then you have a jv with geely in valencia the

5:36:29 PM ETpartnerships with renault and vw are these enough to rightsize

5:36:29 PM ETand Galencia, the partnerships with Brano and BW. Are these enough to right-size?

5:36:35 PM ETyour capacity in europe or do you need further

5:36:35 PM ETactions from the eu to

5:36:35 PM ETyour capacity in Europe, or do you need further actions from the EU to hold check?

5:36:41 PM EThalt chinese exports

5:36:41 PM ETthanks for your question

5:36:41 PM ETChinese exports. Thanks for your question. Europe is quite different.

5:36:47 PM ETeurope is quite different than

5:36:47 PM ETwhat's happening in southeast asia and latam

5:36:47 PM ETdifferent than what's happening, you know, in Southeast Asia and Let Ham for.

5:36:53 PM ETfor the china competition so i appreciate your questions specific

5:36:53 PM ETeurope

5:36:53 PM ETthe China competition. So I appreciate your questions, specific to Europe.

5:36:59 PM ETthe situation in europe is very different because the eu has

5:36:59 PM ETYeah, and the situation in Europe is very different because the EU has such a strong EU.

5:37:05 PM ETsuch a strong ev mandate

5:37:05 PM ETand as you said there's a lot of overcapacity in europe

5:37:05 PM ETEU mandate. And as you said, there's a lot of open capacity in Europe, not just to export it from.

5:37:11 PM ETnot just to export it from china

5:37:11 PM ETwe do feel like we know we have the right plan

5:37:11 PM ETfrom China. We do feel like we know we have the right plan to write this.

5:37:17 PM ETto right the ship

5:37:17 PM ETin terms of our passenger car profitability

5:37:18 PM ETthe ship in terms of our passenger car profitability with Renault. And Geely, as you mentioned.

5:37:23 PM ETwith renault and geely as you mentioned

5:37:23 PM ETthose are very low capital investments with

5:37:23 PM ETmentioned, those are very low capital investments with really great cost levels.

5:37:29 PM ETreally great cost levels

5:37:29 PM ETespecially for the ev portion of our lineup that will allow us

5:37:29 PM ETlevels, especially for the EV portion of our lineup, that will allow us to replace unprofitable.

5:37:35 PM ETto replace unprofitable evs with very

5:37:35 PM ETunprofitable EVs with very, with much better profit outlooks on EV.

5:37:41 PM ETwith much better profit outlooks on ev

5:37:41 PM ETthe commercial side is also under pressure

5:37:42 PM ETcommercial side is also under pressure in Europe, and we have a pretty exciting.

5:37:47 PM ETin europe and we have a pretty exciting lineup

5:37:47 PM ETespecially around the ev requirements for the commercial

5:37:47 PM ETexciting lineup, especially around the EV requirements for the commercial business.

5:37:53 PM ETpro business. There's a lot of negative profit pressure, but we have a

5:37:53 PM ETbusiness the pro business there's a lot of negative

5:37:59 PM ETreally good solution coming next year that we're really excited about. I think the content.

5:37:59 PM ETprofit pressure but we have a really good solution coming

5:38:05 PM ETnext year that we're really excited about

5:38:05 PM ETi think the combination of both

5:38:05 PM ETcombination of both will make sense. As far as the capacity utilization that you mentioned, you're specifically.

5:38:11 PM ETwill make sense as far as the capacity utilization that you mentioned you're

5:38:11 PM ETspecific question at this point i don't want to get into the details

5:38:11 PM ETspecific question at this point. I don't want to get into the details other than working through.

5:38:17 PM ETthe opportunity in Valencia and Romania and Turkey. So, thank you.

5:38:17 PM ETother than working through the opportunity of valencia

5:38:23 PM ETand romania and turkey so

5:38:23 PM ETthank you you know we are completely committed

5:38:23 PM ETwe are completely committed to building a profitable European business with these actions. We've been.

5:38:29 PM ETbuilding a profitable european business with these actions we've been on it for several years

5:38:29 PM ETwe have a really aggressive plan

5:38:29 PM ETon it for several years, and we have a really aggressive plan.

5:38:35 PM ETYour next question comes from the line of Joseph Stack with DB.

5:38:41 PM ETyour next question comes from the line of joseph spak with ubs

5:38:41 PM ETplease unmute your audio and ask your question

5:38:41 PM ETUBS. Please unmute your audio and ask your question. Thanks, Referenc, everyone.

5:38:47 PM ETthanks good afternoon everyone

5:38:47 PM ETI guess I just want to start with some of your comments around.

5:38:47 PM ETi i guess i just wanna start with

5:38:53 PM ETof your comments around

5:38:53 PM ETthe f one fifty and and and not to sort of get

5:38:53 PM ETthe F150 and not to sort of get, you know, just sort of really buckle down on this.

5:38:59 PM ETyou know just sort of really buckle down on this you mentioned

5:38:59 PM ETYou mention that F-150 stock, you expect to recover to target levels by the end of the year. And I want to be clear.

5:39:05 PM ETf one fifty stock you expect to recover to target levels

5:39:05 PM ETby the end of the year and i wanna be clear on this because

5:39:05 PM ETyou've talked about stock in terms of days

5:39:05 PM ETclear on this because we've talked about stock in terms of days historically, and I think even in your prepared.

5:39:11 PM EThistorically and i think even in your prepared remarks but

5:39:12 PM ETprepared remarks, but you know, seasonally, we always see end of year December is much lower than September. So

5:39:17 PM ETyou know seasonally we always see end of year december as much lower than september so

5:39:17 PM ETwhen you say recover

5:39:17 PM ETjust to to to correct levels

5:39:17 PM ETwhen you say we cover this to correct levels, are you talking back?

5:39:23 PM ETare are you talking back to that base level because that would mean a pretty significant increase in absolute in

5:39:23 PM ETinventory

5:39:24 PM ETthat days level? Because that would mean a pretty significant increase in absolute inventory.

5:39:29 PM ETthanks joe it's andrew

5:39:29 PM ETThanks, Joe. It's Andrew. No, I think when we talk specifically to our

5:39:35 PM ETno i think when we talk specifically to our f-one hundred fifty stock

5:39:35 PM ETwe're running at forty nine days coming out of september that is below our range

5:39:35 PM ETF-150 stock, we're running it 49 days coming out of September. That is below our range.

5:39:41 PM ETas we look at towards the year end will be running probably on the low end of that

5:39:41 PM ETwe look at towards the year end, we will be running probably on the low end of that. We'll continue to run on the low end of that.

5:39:47 PM ETwe'll continue to run on the low end of that

5:39:47 PM ETof that. And as Jim mentioned, you know, below our competitive set, we've seen really high days to turn.

5:39:47 PM ETand as jim mentioned below our competitive set

5:39:53 PM ETwe've seen really high days to turn

5:39:53 PM ETon our units that we have in stock. In fact, we just came out of the third quarter where we.

5:39:53 PM ETon our units that we have in stock in fact we just came out of the

5:39:59 PM ETthird quarter where we had the fastest turn rates of the year and

5:39:59 PM ETthey were faster than any of our competitors in the segment and that's really

5:39:59 PM EThad the fastest turn rates of the year, and they were faster than any of our competitors in the segment. And that's really helping.

5:40:05 PM EThelping us manage our overall market equation, as we mentioned. But we do not expect to see our stocks building.

5:40:05 PM EThelping us manage our overall market equation as we mentioned but we do not expect to

5:40:11 PM ETsee our stocks building to a much higher level at the end of this year

5:40:11 PM ETbuilding to a much higher level at the end of this year. Just want to reinforce and be specific.

5:40:17 PM ETjust want to reinforce and be specific to your question you said dig in

5:40:17 PM ETthink that's great

5:40:17 PM ETyou know

5:40:17 PM ETyour question. You said dig in, I think that's great. You know, for

5:40:23 PM ETfor me over the many last many years you know

5:40:23 PM ETfor me over the last many years, you know, a normal stocking level for F-150 could have been aged to 100 days.

5:40:29 PM ETa normal stocking level for f-one hundred fifty could have been eighty to one hundred day supply in the past

5:40:29 PM ETwe're i just wanna reinforce what sherry said

5:40:29 PM ETdays supply in the past. I just want to reinforce what Sherry said. Our target is that.

5:40:35 PM ETour target is that fifty little sixty day supply

5:40:35 PM ET50 little 60 days supply. And I think by the end of this year, we're going to be in that.

5:40:41 PM ETi think by the end of this year we're gonna be in that range that is

5:40:41 PM ETrange. That is substantially lower than Ford's operated, and it's really allowed us to build.

5:40:41 PM ETsubstantially lower than ford's operated and it's really allowed us to

5:40:47 PM ETbuild that disciplined full size truck business while we watch our competitors

5:40:47 PM ETbuild that discipline, full-size truck business. While we watch our competitors play a very different game.

5:40:53 PM ETplay a very different game

5:40:53 PM ETand our dealers are very anxious for

5:40:53 PM ETgame. And our dealers are very anxious to report more stock. Our mix is good.

5:40:59 PM ETmore stock our mix is good

5:40:59 PM ETand our turn rates is really what we're focused on now

5:40:59 PM ETgood, and our turn rates is really what we're focused on now, as the Andrew said.

5:41:05 PM ETas andrew said

5:41:05 PM ETSo I would say, to answer your question simply, that 55 to 60 day range that

5:41:05 PM ETso i would say to answer your question simply

5:41:11 PM ETthat fifty five to sixty day range that

5:41:11 PM ETSherry talked about is historically much lower than we normally run our truck.

5:41:11 PM ETthat sherry talked about is historically much lower than we normally

5:41:17 PM ETrun our truck business

5:41:17 PM ETbusiness. Your next question comes to the

5:41:23 PM ETyour next question comes from the line of james

5:41:23 PM ETpicariello with bnp

5:41:23 PM ETparibas please unmute your audio and ask your question

5:41:23 PM ETline of James Picariello with B and Pus, please admit your audio and ask your question.

5:41:29 PM EThi everybody yeah just

5:41:29 PM ETHi, everybody. Yeah, just follow on Joe's question.

5:41:35 PM ETon the S series recovery and inventory. Is the 150?

5:41:35 PM ETfollow on joe's question

5:41:35 PM ETon f series recovery and inventory

5:41:41 PM ET150,000 units recovery targets still cleanly impacted?

5:41:41 PM ETis the one hundred and fifty thousand units

5:41:41 PM ETrecovery target still

5:41:47 PM ETcleanly intact or or is

5:41:47 PM ETis that number lower, and there's something else to, you know, favorably.

5:41:47 PM ETor is that number lower and there's something else to to you know favorably

5:41:53 PM EToffset and keep that that net one billion

5:41:53 PM ETand keep that net one billion in the guide intact. Is it better?

5:41:53 PM ETthe guide intact

5:41:59 PM ETis it better price mix or is that volume

5:41:59 PM ETtarget still

5:41:59 PM ETprice mix, or is that volume target still to God?

5:41:59 PM ETstill the guide

5:42:05 PM ETso so here's how i answer that on the novelis

5:42:05 PM ETSo here's how you answer that. On the new velocity recovery, it has been going as planned operations.

5:42:05 PM ETrecovery

5:42:11 PM ETit has been going as planned operationally

5:42:11 PM ETand we're now running at rate

5:42:11 PM EToperationally. And we're now running at rate. And most, the vast majority.

5:42:17 PM ETand most the vast majority

5:42:17 PM ETof the materials have been validated and we're gonna continue to run it rate in

5:42:17 PM ETof the materials have been validated. And we're going to continue to run it right in Q4 is our plan.

5:42:17 PM ETfour as our plan

5:42:23 PM ETyou get to the financial side of it we have seen costs coming in a little bit lower

5:42:23 PM ETget to the financial side of it, we have seen costs coming in a little bit lower, and the volumes are.

5:42:29 PM ETand the volumes have been proportionately a little bit lower too

5:42:29 PM ETbeen proportionally a little bit lower, too. And so that's going to enable us to continue to keep with the guide that we.

5:42:35 PM ETand so that's gonna enable us to continue to keep with the guide that we said

5:42:35 PM ETwe said at the outset of the year, which is one billion dollars of a net tailwind by the

5:42:35 PM ETat the outset of the year which is one billion dollars of a net tailwind

5:42:41 PM ETby the end of twenty twenty six

5:42:41 PM ETas it relates to this

5:42:42 PM ETend of 2026, as it relates to this set of problems.

5:42:47 PM ETthis set of products

5:42:47 PM ETproducts.

5:42:53 PM ETyour next question comes from andrew

5:42:53 PM ETpercoco with morgan stanley please unmute your audio and ask your question

5:42:53 PM ETYour next question comes from Andrew Percoca with Morgan Stanley, please unmute your audio and ask a question.

5:42:59 PM ETgreat thanks for taking the questions

5:42:59 PM ETGreat, thanks for taking the questions. So I

5:42:59 PM ETso

5:43:05 PM ETi guess to start out a two part question here first

5:43:05 PM ETguess to start out, a two-part question here. First, I want to ask a follow-up on energy storage.

5:43:11 PM ETi want to ask a follow-up on energy storage i think you guys

5:43:11 PM ETknow, the US provided a great update in your prepared remarks. It sounds like you're 80% contracted.

5:43:11 PM ETprovided a great update in your prepared remarks it sounds like

5:43:17 PM ETyou're eighty percent contracted for twenty twenty eight

5:43:17 PM ETso i guess that would

5:43:17 PM ETcontracted for 2028. So I guess that would imply about 16 gigawatt hours.

5:43:23 PM ETimply about sixteen gigawatt hours kind of in the backlog

5:43:23 PM ETbut i think you also said that that included

5:43:23 PM EThours, kind of in the back log. But I think you also said that that included contracted back logs.

5:43:29 PM ETcontracted backlog as well as late stage negotiations so

5:43:29 PM ETbacklog as well as late stage negotiations. So I guess, did I get that right? And is there any other

5:43:35 PM ETi guess did i get that right and is there any other

5:43:35 PM ETinformation or color you can kind of provide in terms of

5:43:35 PM ETother information or color you can kind of provide in terms of what needs to happen to maybe get that full significant.

5:43:41 PM ETwhat needs to happen to maybe get that full sixteen gigawatt hours

5:43:41 PM ET16 gigawatt hours, you know, fully contracted versus late stage. Just kind of curious what the final steps are.

5:43:47 PM ETfully contracted versus late stage just kind of curious

5:43:47 PM ETwhat the final steps are there and and then my second question

5:43:47 PM ETare there. And then my second question, you know, coming back to

5:43:53 PM ETcoming back to what tom asked about in terms of

5:43:53 PM ETof china

5:43:53 PM ETwhat Tom asked about in terms of China, you know, obviously exports are.

5:43:59 PM ETobviously exports are continuing to increase pretty substantially

5:43:59 PM ETcontinuing to increase pretty substantially out of the region, the domestic market.

5:44:05 PM ETout of the region the the domestic market feels fairly saturated

5:44:05 PM ETyou just talk to

5:44:05 PM ETfeels fairly saturated. Can you just talk to how you expect that to impact your business?

5:44:11 PM EThow you expect that to impact your business at higher level not just in europe but

5:44:11 PM ETbusiness at a higher level, not just in Europe, but just globally. And what you think needs to be done to make

5:44:17 PM ETglobally and you know what you think needs to be done to make sure that that's not gonna

5:44:17 PM ETmake sure that that's not going to create a bigger disruption for you guys going forward. Thank you. They were.

5:44:17 PM ETcreate a a bigger disruption for you guys going forward thank you

5:44:23 PM ETdave why don't you hear on ford energy yeah so andrew this is dave

5:44:23 PM ETcarroll

5:44:23 PM ETyou here not for the energy. Yeah, so Andrew, this is Dave Carroll. First, just to cover your first question.

5:44:23 PM ETfirst just to cover your first question

5:44:29 PM ETwe're actually not talking about lack backlog today, we were going to start disclosing that next year. And what we

5:44:29 PM ETwe're actually not talking about backlog today we were going to start disclosing that next year

5:44:35 PM ETand what we what jim had indicated in his remarks is that we are actually ahead of expectations where we are with

5:44:35 PM ETJim had indicated in his remarks is that we're actually ahead of expectations where we are with our customers. And we see that primarily.

5:44:41 PM ETour customers and we see that primarily

5:44:41 PM ETford energy is very excited about

5:44:41 PM ETFord Energy is very excited about the quality of the product that we have on the market. We believe it's one of the highest quality products out there.

5:44:47 PM ETquality of the product that we have on the market we believe it's one of the highest quality products out there in the market that you can buy

5:44:47 PM ETthe market that you can buy. And we're seeing that from our customers. And we believe that's what's bringing the customers to us.

5:44:53 PM ETand we're seeing that from our customers and we believe that's what's bringing the customers to us

5:44:53 PM ETas we're moving forward in fact last week we had one of our customers out of our marshall

5:44:53 PM ETus as we're moving forward. In fact, last week we had one of our customers at an

5:44:59 PM ETmanufacturing facility where

5:44:59 PM ETthey toured where we're producing lfp prismatic cells right now

5:44:59 PM ETwhere they toured, where we're producing LFP prismatic cells right now, and they toured that fact.

5:45:05 PM ETand they toured that factory

5:45:05 PM ETfactory and came out saying it's top tier of all the factors they've seen globally. So, we're very excited.

5:45:05 PM ETand came out saying it's top tier of all the factors they've seen globally so

5:45:11 PM ETwe're very excited that we have the highest quality product in the market and we believe that's what's driving the customers to us

5:45:11 PM ETwe have the highest quality product in the market, and we believe that's what's driving the customers to us.

5:45:17 PM ETYeah, and I think for back log, that would be something we're probably.

5:45:23 PM ETyes and i think for backlog that would be something we're

5:45:23 PM ETprobably give more transparency on next next year

5:45:23 PM ETgive more transparency on next year, right? Yes, that's correct. Okay.

5:45:29 PM ETright yes that's correct okay

5:45:29 PM ETSo thanks for your question. And we have a lot to do with Ford Energy, but really promising start.

5:45:29 PM ETso thanks for your question and we have a lot to do with ford energy but

5:45:35 PM ETreally promising start and we're going to open the aperture for all the investors

5:45:35 PM ETand we're going to open the aperture for all the investors more and more as time goes on. As far as the Chinese.

5:45:41 PM ETmore and more as time goes on as far as china is concerned thank you for your question

5:45:41 PM ETconcerned, thank you for your question. You know, frankly, we've held up really well internationally.

5:45:47 PM ETfrankly we've held up really well internationally

5:45:47 PM ETas the Chinese would gain more and more a share in open and closed markets.

5:45:47 PM ETas the chinese gain more and more share

5:45:53 PM ETin open and closed markets

5:45:53 PM ETwe see the competition the most intense is latam and

5:45:53 PM ETWhere we see the competition the most intense is Latam in Southeast Asia, where we have a large ranger business.

5:45:59 PM ETsoutheast asia where we have a large ranger business

5:45:59 PM ETand in both cases ranger is still doing very well

5:45:59 PM ETbusiness. And in both cases, Ranger is still doing very well because it competes at a much.

5:46:05 PM ETbecause it competes at a much higher price point

5:46:05 PM ETmuch higher price point. And as I said, we're going to be going into their price point.

5:46:11 PM ETand as i said we're going to be going into

5:46:11 PM ETtheir price point next year with this new affordable truck

5:46:11 PM ETpoint next year with this new affordable truck. So we'll see how that plays out, but we're confident.

5:46:17 PM ETso we'll see how that plays out but we're confident in addition

5:46:17 PM ETIn addition, I think Ford is the number one traditional OEM exporting from China. It's been our strategy for

5:46:23 PM ETi think ford is the number one traditional oem exporting from china

5:46:23 PM ETbeen our strategy for several years now the

5:46:23 PM ETseveral years now. The Territory is our second most profitable vehicle globally.

5:46:29 PM ETterritory is our second most profitable vehicle globally

5:46:29 PM ETand it is really successful for us

5:46:29 PM ETand it is really successful for us. And I think the exports are up, I don't know, like 60.

5:46:35 PM ETand i think the exports are up i don't know like sixty percent in

5:46:35 PM ET60%. It's a really big improvement. And we expect to continue to take.

5:46:35 PM ETit's a really big improvement

5:46:41 PM ETand we expect to continue to take advantage of that

5:46:41 PM ETfor the open markets especially i kind of try to give a view

5:46:41 PM ETtake advantage of that for the open markets, especially. I kind of try to give a view.

5:46:47 PM ETview on Europe so I won't be repetitive. But that's where we, for four, that's where we see the real problem.

5:46:47 PM ETon europe so i won't be repetitive but that's where we

5:46:53 PM ETfor ford that's where we see the the real pressure on our business

5:46:53 PM ETpressure on our business with the Chinese. It's really in Europe. It's not just the Chinese, it's the Evie Mandate.

5:46:59 PM ETwith the chinese it's really in europe it's not just the chinese

5:46:59 PM ETit's the ev mandates by the eu which we expect them to address over

5:46:59 PM ETmandates by the EU, which we expect them to address over time, as well as the UK. And all the overcapacity.

5:46:59 PM ETtime as well as the uk

5:47:05 PM ETand all the overcapacity in europe

5:47:05 PM ETit's been there for many many years

5:47:05 PM ETas far as the rest of the world

5:47:05 PM ETcapacity in Europe. It's been there for many, many years. As far as the rest of the world, I think we're well.

5:47:11 PM ETwell positioned not only now, but with our new lineup. And our global partnerships will give us a lot of.

5:47:11 PM ETi think we're well positioned not only now but with our new lineup

5:47:17 PM ETand our global partnerships will give us a lot of opportunity

5:47:17 PM ETwe have learned so much exporting from china

5:47:17 PM ETof opportunity. We have learned so much exporting from China. It's been really a very successful.

5:47:23 PM ETit's been really a very successful exercise for ford

5:47:23 PM ETwith very low capital

5:47:23 PM ETsuccessful exercise for Ford with very low capital. And we've learned a lot about China.

5:47:29 PM ETand we've learned a lot about china cost

5:47:29 PM ETas well as china cost

5:47:29 PM ETChina cost, as well as China cost in places where it needs to be localized, like Taiwan.

5:47:35 PM ETin places where it needs to be localized like thailand

5:47:35 PM ETand europe over time

5:47:35 PM ETThailand in Europe over time. So I think we're well positioned. The issue for us.

5:47:41 PM ETso i think we're well positioned the issue for us in the

5:47:41 PM ETshort term is really europe

5:47:41 PM ETin the short term is really Europe.

5:47:47 PM ETYour next question will come from Jairam Nathan Daiwa, please unmute your audio and ask your question.

5:47:47 PM ETyour next question will come from jairam nathan with daiwa

5:47:47 PM ETplease unmute your audio and ask your question

5:47:53 PM ETyeah hi thanks for taking my question here

5:47:53 PM ETYeah, hi, thanks for taking my question here. So I just wanted to understand.

5:47:59 PM ETso i i just wanted to understand the ability to upsell on the patent

5:47:59 PM ETthe ability to upsell on the fatum. And the starting point of your 30,000 is crazy.

5:48:05 PM ETyou know the starting point of you know thirty thousand is is

5:48:05 PM ETpretty good but i just wanted to understand how would you what ways you can upskill that

5:48:05 PM ETpretty good, but I just wanted to understand how would you, what ways you can upset that.

5:48:11 PM ETDo you mean just so we understand the question?

5:48:17 PM ETdo you mean just so we understand the question

5:48:17 PM ETmean how do we get to a point where it's profitable at that price point? Is that what you mean by the offset?

5:48:17 PM ETyou mean how do we how do we get to a point where where it's

5:48:23 PM ETprofitable at that price point is that what you mean by the offset

5:48:23 PM EToffset. And no, no, no, not offset, upsell, upsell the next.

5:48:23 PM ETno no not offset upsell the

5:48:29 PM ETyou know up sell the vehicle

5:48:29 PM ETupsell the current kind of buy often like getting a bit of mix on the

5:48:35 PM ETkind of by offering like getting a bit of mix on the vehicle beyond

5:48:35 PM ETvehicle beyond that 30,000 on the 30,000. I see, I see what you mean. Okay, thank you. Yeah.

5:48:35 PM ETbeyond that thirty thousand under thirty thousand i see i see what you mean okay thank you yeah

5:48:41 PM ETgreat question i think we're already pretty deep in

5:48:41 PM ETyeah, great question. I think we're already pretty deep in a lot of intelligence, a lot of customers have shown in.

5:48:47 PM ETa lot of intelligence a lot of customers have shown interest in the vehicle so we're learning a lot

5:48:48 PM ETinterest in the vehicle, so we're learning a lot. There's a lot to that strategy at Forward 2.

5:48:53 PM ETthere's a lot to that strategy at ford to

5:48:53 PM EToffer customers a lot of options beyond the $28,000, Android will let you highlight.

5:48:53 PM ETto offer customers a lot of options beyond the twenty eight thousand dollars

5:48:59 PM ETandrew i'll let you highlight the three or four key points yeah i think what

5:48:59 PM EThighlight the three or four key points. Yeah, I think we're one, and we'll get more into this when we do.

5:49:05 PM ETone and we'll get more into this when we when we do a full review of the

5:49:05 PM ETproduct you'll you'll learn a lot more about our positioning strategy but

5:49:05 PM ETdo a full reveal of the product. You'll learn a lot more about our positioning strategy, but the starting price of the 20%.

5:49:11 PM ETthe starting price of the twenty eight thousand hundred fifty is just that

5:49:11 PM ET28,350 is just that. We'll have a range that goes to the high 30,000 range.

5:49:17 PM ETwe'll have a range that goes to the high thirty thousand range

5:49:17 PM ETand we'll have a couple of different offerings within that so

5:49:17 PM ETrange, and we'll have a couple different offerings within that. So I would say we.

5:49:23 PM ETi i would say we will give you a lot more detail around this the the

5:49:23 PM ETwe will give you a lot more detail around this, the offerings themselves as we get closer.

5:49:29 PM ETofferings themselves as we get closer it's probably too soon to

5:49:29 PM ETIt's probably too soon to share more at this point. The big breakthrough conceptually for us about customer.

5:49:35 PM ETto share more at this point the big breakthrough conceptually for us

5:49:35 PM ETabout customers you know buying nicer

5:49:35 PM ETfathoms are really on the digital side

5:49:35 PM ETcustomers buying nicer paths are really on the digital side. We put in an advanced.

5:49:41 PM ETwe put in an advanced electric architecture in a forty eight volt system

5:49:41 PM ETelectric architecture or 48 volts system so we can offer at an incredibly low cost.

5:49:47 PM ETvery advanced ADAS. As well as, you know, digital.

5:49:47 PM ETso we can offer at an incredibly low cost

5:49:47 PM ETvery advanced adas

5:49:47 PM ETas well as

5:49:53 PM ETdigital

5:49:53 PM ETcamera dashboard. You know, I won't go into all the details Andrew said, but the digital suite.

5:49:53 PM ETcamera dashboard you know i won't go into all the details andrew said but

5:49:59 PM ETthe digital suite including the embedded apple maps

5:49:59 PM ETincluding the embedded Apple Maps, is really a game changer for any EP.

5:50:05 PM ETis really a game changer for any ev

5:50:05 PM ETlet alone at this price i think for me personally

5:50:05 PM ETalone at this price. I think for me personally, that is going to be the most exciting upsell.

5:50:11 PM ETthat is going to be the most exciting upsell opportunity it's really

5:50:11 PM ETopportunity. It's really the long-term subscription and digital experience.

5:50:11 PM ETlong term subscription

5:50:17 PM ETand digital experience for the customer

5:50:17 PM ETexperience for the customer. Oh, no.

5:50:23 PM ETour next question will come from mark delaney with goldman sachs

5:50:23 PM ETplease unmute your audio and ask your question

5:50:23 PM ETnext question will come from Mark Delaney with Golden Sachs, visa meet your audio and ask your question.

5:50:29 PM ETyes good afternoon thank you very much for

5:50:29 PM ETYes, good afternoon, and thank you very much for taking my question. I was hoping you could give a bit more color on what Ford is.

5:50:35 PM ETtaking my question i was hoping you could give a bit more color on what

5:50:35 PM ETseeing for pricing. The company took up its view of U.S. industry pricing by a little bit for 2026.

5:50:35 PM ETford is seeing for pricing the company took up its view of u s industry pricing

5:50:41 PM ETby a little bit for twenty twenty six maybe you can share a

5:50:41 PM ETbit more on what's driving that and then also on this

5:50:41 PM ETMaybe you can share a bit more on what's driving that. And then also on this topic more broadly, any early views and pricing for 2066.

5:50:47 PM ETtopic more broadly any early views on pricing for twenty twenty seven including what you're seeing in

5:50:47 PM ETpro with the annual negotiations which i think are now well underway

5:50:47 PM ET2027, including what you're seeing in pro with the annual negotiations, which I think are now well underway.

5:50:53 PM ETthat's a big question thank you for asking

5:50:53 PM ETThat's a big question. They never asked me. So I

5:50:59 PM ETAdrian and Lisha, I think you should bring up. Yeah, maybe I'll start with the retail side banks.

5:50:59 PM ETso andrew and alicia i think you should bring up too yeah maybe i'll i'll

5:51:05 PM ETstart with the retail side thanks mark yeah we're seeing a very strong

5:51:05 PM ETpricing environment right now

5:51:05 PM ETMark. Yeah, we're seeing a very strong pricing environment right now. We expect pricing to be up about a percentage.

5:51:11 PM ETwe expect pricing to be up about one percentage point

5:51:11 PM ETthis year and

5:51:11 PM ETas we looked into next year

5:51:11 PM ETpercentage point this year. And, you know, as we looked into next year, we think.

5:51:17 PM ETwe think there's a lot of different levers that we'll be able to work with with our product mix and

5:51:17 PM ETthere's a lot of different levers that we'll be able to work with with our product mix and net pricing, both the top line, but

5:51:23 PM ETand net pricing both the top line but also

5:51:23 PM ETbut also our variable marketing as well. Just very similar to how we approach this year.

5:51:23 PM ETvariable marketing as well just very similar to how we approach this year

5:51:29 PM ETthe industry remains really strong

5:51:29 PM ETindustry remains really strong. We're seeing the segmentation remain strong. Very, really big Brazilian.

5:51:35 PM ETwe're seeing the segmentation remain strong very really big resilience with

5:51:35 PM ETcustomer base especially in trucks and utilities

5:51:35 PM ETresilience with customer base, especially in trucks and utilities, which is really playing to our advanced.

5:51:41 PM ETwhich is really playing to our advantage and we expect that

5:51:41 PM ETcontinue into next year and alicia do you want to comment on the what you're seeing in the

5:51:41 PM ETadvantage, and we expect that to continue in the next year. And Alicia, do you want to comment on what you're seeing in the early part of

5:51:47 PM ETearly part of commercial side yes can just also on pricing for fleet we're also seeing

5:51:48 PM ETof the commercial side. Yeah, I can just also empic. We're also seeing strong pricing year over year.

5:51:53 PM ETstrong pricing year over year over one percent

5:51:53 PM ETover 1%. But as Sherry mentioned, our fleet demand orders for 27 model year.

5:51:59 PM ETbut as sherry mentioned our fleet demand orders for twenty seven model year

5:51:59 PM ETare on target we're excited about

5:51:59 PM ETare on target. We're excited about Oakville and that capacity because that's going to allow.

5:52:05 PM EToakville and that capacity because that's going to allow us to really grow

5:52:05 PM ETallow us to really grow our truck rental sales. We can return to our pre-pandemic levels where the economic.

5:52:11 PM ETour truck rental sales we can return to our pre pandemic levels where the economics are really

5:52:11 PM ETfavorable for us

5:52:11 PM ETeconomics are really favorable for us. We are also able to take a larger share of wallet for our large commercial.

5:52:17 PM ETwe are also able to take a larger share of wallet for our large commercial customers

5:52:17 PM ETcommercial customers. And then we were able to supply more chassis cap units to the body modifiers. And we are very

5:52:23 PM ETand then we were able to supply more chassis cab

5:52:23 PM ETto the body modifiers and we are very competitive

5:52:23 PM ETthat space and we have been constrained

5:52:23 PM ETvery competitive in that space, and we have been constrained. So, we're excited about the ability to really.

5:52:29 PM ETso we're excited about the ability to really meet this unmet

5:52:29 PM ETdemand and the strong order take that we're seeing so far

5:52:29 PM ETmeet this unmet demand and the strong order take that we're seeing so far. Gives us competition.

5:52:35 PM ETgives us confidence that we'll continue to grow there

5:52:35 PM ETconfidence that we'll continue to grow there. The upside for next year for Pro is pretty meaningful. Between

5:52:41 PM ETthe upside for next year for pro is pretty meaningful

5:52:41 PM ETOPIL and getting past nobellas, it's really a great opportunity for us at Ford.

5:52:41 PM ETbetween oakville and getting past novelis yes

5:52:47 PM ETit's really a great opportunity for us at ford

5:52:47 PM ETYour next question comes from the line of John saying.

5:52:53 PM ETyour next question comes from the line of john sager with evercore isi

5:52:53 PM ETplease unmute your audio and ask your question

5:52:53 PM ETSager with Evercore ISI. Please unmute your audio and ask your question.

5:52:59 PM ETDawn your line is open, please unmute and ask your question.

5:52:59 PM ETjohn your line is open please unmute and ask your question

5:53:05 PM EThey thanks sorry about that

5:53:05 PM ETHey, thanks, sorry about that. Yeah, I just wanted to take one more shot at BESS. You had mentioned.

5:53:11 PM ETyeah i just wanted to take one more shot at ess you you had mentioned

5:53:11 PM ETyou know the discussions for twenty nine and thirty advancing

5:53:11 PM ETkind of ahead of your prior expectations

5:53:11 PM ETyou know, the discussions for 29 and 30, advancing kind of ahead of your prior expectations. We're using

5:53:17 PM ETdo you need to see in terms of commit commitment capacity to

5:53:17 PM ETyou need to see in terms of commitment capacity to start to think about expanding?

5:53:23 PM ETstart to think about expanding beyond that first twenty gigawatt hours

5:53:23 PM ETbeyond that first 20 gigawatt hours. And then, what does incremental cap exist?

5:53:23 PM ETand then what does incremental

5:53:29 PM ETcapex look like

5:53:29 PM ETbags look like for that. And then maybe if I get asked to follow up on just the inner.

5:53:29 PM ETfor that and then maybe if i could ask a follow-up

5:53:35 PM ETon just the the impact to earnings

5:53:35 PM ETimpact to earnings as we go through the course of the year, as you go through the ramp to get towards the

5:53:41 PM ETas we go through the course of the year as you go through the ramp

5:53:41 PM ETto get towards the the fourth quarter of twenty gigawatt hours of capacity could you just

5:53:41 PM ETgive us some puts and takes there

5:53:41 PM ETfourth quarter of 20 gigawatt hours of capacity. Could you just maybe give us some puts and takes there?

5:53:47 PM ETyes so john so

5:53:47 PM ETYes, John. So obviously, the team is really focused. This is Dave, the team is really focused on law.

5:53:53 PM ETobviously the team is really this is dave the team is really focused on launching the initial twenty gigawatt hours

5:53:53 PM ETwe have to to bring online and ramp up in twenty twenty eight

5:53:53 PM ETlaunching the initial 20 gigawatt hours that we have to bring online and ramp up in 2028. That being said,

5:53:59 PM ETthat being said

5:53:59 PM ETwe are already evaluating scenarios how we could best expand

5:53:59 PM ETsaid, we are already evaluating scenarios how we could best expand capacity, expand our offerings to our customers.

5:54:05 PM ETcapacity expand our offerings to our customers because we do see the real demand out there

5:54:05 PM ETwhen we're doing so we do consider the returns on our investment

5:54:05 PM ETbecause we do see the real demand out there. But when we're doing so, we do consider the returns on our investment, consider the customer demand.

5:54:11 PM ETconsider the customer demand

5:54:11 PM ETthe tax treatment and other strategic uses of capital

5:54:11 PM ETthe tax fremont, and other strategic uses of capital. So we do see upside at our consequences.

5:54:11 PM ETso we do see upside

5:54:17 PM ETour kentucky one facility

5:54:17 PM ETexcited for the potential growth but we don't have anything to announce today in that regards

5:54:17 PM ETContechu 1 facility. We're excited for the potential of growth, but we don't have anything to announce today in that regard.

5:54:23 PM ETsure any tips you wanna give on the spending for for

5:54:23 PM ETfor an energy next year

5:54:23 PM ETreally need does she want to give all the spending for an energy next year.

5:54:29 PM ETThe only thing I would give is that we had talked about around $2 billion.

5:54:35 PM ETthe the only thing i would give is that we had talked about

5:54:35 PM ETaround two billion dollars of investment and we're going to spend about a third of that this

5:54:35 PM ETdollars of investment, and we're going to spend about a third of that this year, and about two-thirds next year.

5:54:35 PM ETyear and about two thirds next year

5:54:41 PM ETthat gives you a little bit more understanding

5:54:41 PM ETgives you a little bit more understanding.

5:54:47 PM ETYour next question comes to the line of Dan Letty with Barclays. They submit your audio and ask your question.

5:54:47 PM ETyour next question comes from the line of dan levy with barclays please unmute your audio and ask your

5:54:47 PM ETquestion

5:54:53 PM ETI goody lame, thank you for taking the

5:54:53 PM EThi good evening thank you for

5:54:59 PM ETtaking the the questions wanted to ask

5:54:59 PM ETthe questions. I wanted to ask about the partnership with Geely.

5:55:05 PM ETabout the partnership with geely

5:55:05 PM ETI believe part of the partnership is to establish learnings from them.

5:55:05 PM ETi believe part of the partnership is to

5:55:05 PM ETestablish learnings from them

5:55:11 PM ETmaybe you could just be a bit more concrete you know what you hope to learn within

5:55:11 PM ETmaybe you could just be a bit more concrete, you know, what you hope to learn within supply base.

5:55:17 PM ETsupply base and designing the vehicle and then i'll just extend that question to

5:55:17 PM ETand designing the vehicle. And I'll just extend that question to how you plan to achieve profit.

5:55:23 PM EThow you plan to achieve profitability

5:55:23 PM ETprofitability on Thalada, which I think you've talked about, sort of indexing or benchmarking against the child?

5:55:29 PM ETon fathom which i which i think you've talked about sort of index

5:55:29 PM ETing or benchmarking against the chinese

5:55:29 PM ETknow some of the supply chain

5:55:29 PM ETChinese, you know, some of the supply chain opportunities there. So maybe you can talk about what you're doing.

5:55:35 PM ETopportunities there so maybe you can talk about you know what you're doing with geely

5:55:35 PM ETdoing with Jealy and maybe how some of that potentially extends to how you're going to achieve the right cost that.

5:55:35 PM ETand maybe how some of that potentially extends to how you're gonna achieve

5:55:41 PM ETthe right cost that you need

5:55:41 PM ETyou need to fall off? So let me break it down into

5:55:47 PM ETso let me break it down into

5:55:47 PM ETtwo pieces

5:55:47 PM ETtwo pieces: um, its cost and its quality.

5:55:47 PM ETit's cost and it's quality

5:55:53 PM ETWe are already learning that they can.

5:55:53 PM ETwe are already learning

5:55:53 PM ETthat

5:55:53 PM ETthey can

5:55:59 PM EToffer

5:55:59 PM ETexcuse me

5:55:59 PM ETa certain percentage

5:55:59 PM EToffer a certain percentage, lower cost.

5:55:59 PM ETlower cost

5:56:05 PM ETlanded in europe for us so we're going through

5:56:05 PM ETlanded in Europe for us. So we're going through part by part understanding each system.

5:56:05 PM ETpart by part

5:56:05 PM ETunderstanding each system

5:56:11 PM ETand

5:56:11 PM ETspeed

5:56:11 PM ETSpeed, we're learning there are a few.

5:56:17 PM ETwe're learning there a few months faster than this

5:56:17 PM ETand we're going through

5:56:17 PM ETfew months faster than. And we're going through each part of the product.

5:56:17 PM ETeach

5:56:23 PM ETpart of the product development system

5:56:23 PM ETto understand how they are faster than us

5:56:23 PM ETdevelopment system to understand how they are faster than us. And it comes.

5:56:29 PM ETand a combination of both of those items

5:56:29 PM ETcombination of both of those items is being institutionalized into our own.

5:56:29 PM ETis being institutionalized

5:56:35 PM ETinto our own global product development system

5:56:35 PM ETown global product development system.

5:56:41 PM ETon the ued

5:56:41 PM ETOn the UED, you know, we always set our target even for you.

5:56:47 PM ETyou know we we always set our target even four years ago

5:56:47 PM ETwith imagining what a byd could do in mexico

5:56:47 PM ETyears ago with imagining what a BYD could do in Mexico. Now, because we knew.

5:56:53 PM ETnot because we counter on that happen, but because we knew that ultimately, if that platform is going to be competitive.

5:56:53 PM ETbecause we knew not because we count on that happen but because we knew that ultimately that

5:56:59 PM ETplatform is gonna be competitive we had to make sure

5:56:59 PM ETcompetitive. We had to make sure, even in the US, it would be fully competitive. So that's why we took such a

5:57:05 PM ETeven in the u s would be fully competitive so that's why we took

5:57:05 PM ETbig swing at the innovation because we had to. The big breakthroughs.

5:57:05 PM ETsuch a big swing at the innovation because we had to

5:57:11 PM ETyou know, in general on the cost for that product is really.

5:57:11 PM ETthe big breakthroughs you know in general on the cost for

5:57:11 PM ETfor that product is is really

5:57:17 PM ETa couple of things in general the first is

5:57:17 PM ETa couple of things in general. The first is the

5:57:23 PM ETthe e box and the whole electronic

5:57:23 PM ETe-box and the whole electronics and electrical architecture in ADAS is much, much slower.

5:57:29 PM ETin electric architecture and adas is much much lower cost than

5:57:29 PM ETlower cost than supply chain. We could do that all in-house, and the big benefit.

5:57:29 PM ETsupply chain we did that all in house

5:57:35 PM ETand the big benefit would be the cost and the design cost of that

5:57:35 PM ETbenefit would be the cost and the design cost of that. Number two is we rapidly.

5:57:35 PM ETnumber two

5:57:41 PM ETis we radically resimplified the parts

5:57:41 PM ETradically simplify the parts. So the two large unit castings that Kumar talked.

5:57:47 PM ETso the two large unit castings that kumar talked about derisking

5:57:47 PM ETtalked about, de-risking the 5,000 we've already built. That is a radical enabler.

5:57:53 PM ETthe five thousand we've already built that is a radical enabler

5:57:53 PM ETenabler for much lower part count in the VFL. And then, obviously, the labor content is.

5:57:53 PM ETfor much lower part count in the vehicle

5:57:59 PM ETand then obviously the labor content is much lower

5:57:59 PM ETis much lower in the vehicle by intention. But there's another area that we really found.

5:58:05 PM ETin the vehicle by intention but there's another area that we really found

5:58:05 PM ETfound to be quite advantage relative to you know BYD, and that is the efficiency of our motor.

5:58:05 PM ETto be quite advantage relative to you know a byd

5:58:11 PM ETand that is the efficiency of our motors gearbox and inverters

5:58:11 PM ETmotors, gearbox, and inverters, which are about 30% more efficient than theirs and allows us to design.

5:58:17 PM ETwhich are about thirty percent more efficient than theirs and allows us to design a battery

5:58:17 PM ETthat's much less and so that i think that's

5:58:17 PM ETdesign a battery that's much less. And so, that I think God's really critical.

5:58:23 PM ETcritical. The LFP cell in Marshall is another big enabler, and I think you get the points.

5:58:23 PM ETreally critical the lfp cell in march

5:58:23 PM ETis another big enabler

5:58:29 PM ETand i think you get the point which is like

5:58:29 PM ETevery part of this project

5:58:29 PM EThad to be world class

5:58:29 PM ETpoint, which is like every part of this project had to be world class, Chinese.

5:58:35 PM ETchinese cost efficiency in order to convince ourselves we would be fully

5:58:35 PM ETChinese cost efficiency thing in order to convince ourselves we would be fully competitive. But it also

5:58:35 PM ETcompetitive

5:58:41 PM ETalso introduced a lot of new technology and, frankly, a lot of new suppliers.

5:58:41 PM ETbut it also introduced a lot of new technology and frankly a lot of new

5:58:41 PM ETsuppliers

5:58:47 PM ETand so what we learned from uev

5:58:47 PM ETAnd so, what we learned from UEB and what we're learning from GLI, and what will.

5:58:53 PM ETand what we're learning from geely and what we wanna keep strategically in the company

5:58:53 PM ETare all

5:58:53 PM ETwant to keep strategically in the company. We're all getting captured at the same time.

5:58:53 PM ETgetting

5:58:59 PM ETcaptured at the same moment for kumar

5:58:59 PM ETmoment for Kumar, and his team is now curating how that all is going to work.

5:58:59 PM ETand his team is now curating

5:59:05 PM EThow that all is gonna work along with our ai tools that sherry mentioned

5:59:05 PM ETwork along with our AI tools that Sherry mentioned. And that's why we mentioned the heart and soul of our.

5:59:11 PM ETand that's why we mentioned the heart and soul of our company is gonna be this new industrial system

5:59:11 PM ETgoing system enabled by all that benchmarking

5:59:11 PM ETcompany is going to be this new industrial system enabled by all that benchmarking, including supposed.

5:59:17 PM ETincluding suppliers manufacturing efficiency

5:59:17 PM ETsuppliers, manufacturing efficiency, all the way to how fast we create the vehicle.

5:59:23 PM ETall the way to how fast we create the vehicle

5:59:23 PM ETthat's exciting for us

5:59:23 PM ETThat's exciting for us because it's quite.

5:59:29 PM ETbecause it's quite

5:59:29 PM ETit's quite a big change for ford

5:59:29 PM ETa big change for Ford. A real concrete example is the motors and the patients who.

5:59:35 PM ETyeah a real concrete example is the

5:59:35 PM ETmotors and the patient's physician that you mentioned jim

5:59:35 PM ETthat you mentioned, Jim, are being now being transported into our hypertension.

5:59:41 PM ETare being now being transported into our

5:59:41 PM EThybrid systems for the rest of the week for the rest of our

5:59:41 PM ETportfolio

5:59:41 PM EThybrid systems for the rest of the ecosystem, for the rest of our portfolio. We're putting a lot.

5:59:47 PM ETand we're putting a lot of pressure on ourselves

5:59:47 PM ETto make sure that whether it's uev

5:59:47 PM ETlot of pressure on ourselves to make sure that whether it's UED or GLE or JMC.

5:59:53 PM ETor geely or jmc

5:59:53 PM ETwe or ai tools

5:59:53 PM ETJMC. We, or AI tools, we are going to move that into the corporate.

5:59:59 PM ETwe are going to move that into the core part of the company

5:59:59 PM ETas fast as we can

5:59:59 PM ETpart of the company as fast as we can.

6:00:05 PM ETthis concludes the ford motor company third

6:00:05 PM ETquarter twenty twenty six earnings conference call

6:00:05 PM ETThis includes the Ford Motor Company third quarter 2026 earnings conference call.

6:00:11 PM ETyou for your participation you may now disconnect

6:00:11 PM ETyou for your participation, you may now disconnect.