Earnings call transcript: Ford’s Q2 2025 earnings surpass expectations

Ford Motor Company (F), a prominent player in the global automotive industry with a market capitalization of $43.15 billion, reported its second-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.37, compared to the forecasted $0.31. The company also achieved a revenue of $50.18 billion, exceeding the anticipated $45.29 billion. Following the announcement, Ford’s stock experienced a modest increase in aftermarket trading, reflecting positive investor sentiment. According to InvestingPro data, Ford’s trailing twelve-month revenue stands at $182.87 billion, with a healthy dividend yield of 6.9%.

Key Takeaways

• Ford’s Q2 2025 EPS of $0.37 exceeded forecasts by 19.35%.
• Revenue reached a record $50.18 billion, surpassing expectations by 10.8%.
• The company’s stock rose slightly in aftermarket trading.
• Ford is focusing on developing new EV platforms and autonomous driving technologies.
• Cost reduction and operational efficiency remain key priorities.

Company Performance

Ford Motor Company demonstrated strong performance in the second quarter of 2025, with revenue reaching an all-time high of $50.18 billion. This performance was driven by robust sales in the truck and SUV segments, where Ford gained market share both in the U.S. and European markets. The company’s focus on hybrid and electric vehicle (EV) technologies is positioning it well against competitors, including Chinese EV manufacturers.

Financial Highlights

• Revenue: $50.18 billion, up significantly from the forecast.
• Earnings per share: $0.37, surpassing the forecast by 19.35%.
• Adjusted EBIT: $2.1 billion for the quarter.
• Cash and liquidity: $28 billion in cash and $46 billion in total liquidity.

Earnings vs. Forecast

Ford’s actual EPS of $0.37 was higher than the forecasted $0.31, marking a 19.35% surprise. The revenue of $50.18 billion also exceeded the forecast of $45.29 billion by 10.8%. This earnings beat is notable compared to previous quarters, indicating strong operational performance and effective cost management.

Market Reaction

Following the earnings announcement, Ford’s stock saw a slight increase in aftermarket trading, rising by 0.27% to $11.11. This movement reflects investor confidence in Ford’s strategic direction and its ability to outperform market expectations. The stock remains within its 52-week range, with a high of $11.97 and a low of $8.44, indicating stable performance relative to broader market trends. Based on InvestingPro’s Fair Value analysis, Ford appears to be fairly valued at current levels, with a beta of 1.5 indicating higher volatility than the broader market. The company maintains a strong dividend track record, having paid dividends consistently for 14 consecutive years.

Want deeper insights? Access Ford’s comprehensive Pro Research Report, part of InvestingPro’s coverage of 1,400+ top US stocks.

Outlook & Guidance

Ford provided full-year adjusted EBIT guidance between $6.5 billion and $7.5 billion, with adjusted free cash flow expected to range from $3.5 billion to $4.5 billion. The company is targeting $1 billion in net cost improvements and aims to reduce CO2 credit purchases by $1.5 billion. Ford’s continued investment in EV technologies and autonomous driving systems is expected to drive future growth.

Executive Commentary

CEO Jim Farley stated, "This is a Model T moment for us at Ford," highlighting the company’s transformative efforts in the automotive industry. CFO Sherry House emphasized, "We are laser focused on capital efficiency and cost improvement," reflecting Ford’s commitment to financial discipline. COO Kumar Gahotra noted, "Our industrial platform is delivering tangible progress on our core priorities."

Risks and Challenges

• Tariff impact: Estimated $2 billion net headwind could affect profitability.
• Emissions regulations: Changes may require additional compliance costs.
• Supply chain disruptions: Could impact production timelines and costs.
• Market saturation: Competition from Chinese EV manufacturers poses a challenge.
• Macroeconomic pressures: Economic downturns could affect consumer demand.

Q&A

During the earnings call, analysts questioned Ford’s strategy regarding emissions regulations and its recall strategy. Executives addressed these concerns by outlining plans for cost management and exploring opportunities in autonomous driving and fleet management. Tariff implications and trade policy were also discussed, with Ford monitoring developments closely to mitigate potential impacts.

Ford Motor (F)ull transcript - Ford Motor (F) Q2 2025:

Leila, Conference Operator: Good day, everyone. My name is Leila, and I will be your conference operator today. At this time, I would like to welcome you to the Ford Motor Company Second Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

If you would like to ask a question during this time and if you have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application. If you have joined by phone, please dial 9 on your keypad to raise your hand. At this time, I would like to turn the call over to Lynn Antipas Tyson, Executive Director of Investor Relations.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company: Thank you, Leila, and welcome everyone to Ford Motor Company’s second quarter twenty twenty five earnings call. With me today are Jim Farley, President and CEO Sherry House, CFO Andrew Frick, President, Ford Blue and Model Yee and Interim Head of Ford Pro and Kumar Gahotra, Chief Operating Officer. Joining us for Q and A will be Kathy O’Callaghan, CEO of Ford Credit and Steve Carley, Chief Policy Officer and General Counsel. Today, Jim will provide a high level overview of our performance and touch on the policy environment. Andrew will then cover market dynamics, followed by Kumar on our industrial progress.

Sherry will conclude with a detailed financial review and our updated guidance before we turn to Q and A. We’ll be referencing non GAAP measures today. These are reconciled to the most comparable U. S. GAAP measures in the appendix of our earnings deck.

You can find the deck at shareholder.ford.com. Our discussion also includes forward looking statements. Our actual results may differ. The most significant risk factors are included on Page 20 of our deck. Unless otherwise noted, all comparisons are year over year.

Company EBIT, EPS and free cash flow are on an adjusted basis. Lastly, I’d like to highlight a key near term public IR engagement. August 13, Navin Kumar, CFO of Ford Pro, will participate in a fireside chat with Ryan Brinkman at the JPMorgan Auto Conference in New York. Now I’ll turn the call over to Jim.

Jim Farley, President and CEO, Ford Motor Company: Thank you, Lynn. Hi, everyone. The Ford team delivered a solid second quarter, including a record $50,000,000,000 in revenue that underscores the strength of our incredible products and services. Overall, we earned $2,100,000,000 in adjusted EBIT and delivered another quarter of year over year improvement in cost excluding the impact of tariffs. For the full year, we now expect adjusted EBIT to be between $6,500,000,000 and $7,500,000,000 net of tariffs.

I want to recognize our team as well as our dealers and our suppliers for working together effectively to drive our business forward around the world. Thank you. Ford Pro, our growth engine, best exemplifies our strength this quarter. We’ve transformed this business by diversifying our revenue streams. Over the past twelve months, aftermarket, which includes parts and software and services, contributed 17% of Pro’s EBIT, closing in on that 20% target for next year.

These high margin reoccurring revenues make Ford Pro a less cyclical and more durable business. To accelerate that progress over our multiyear business plan, we are shifting capital towards Pro, partly funded by reallocating the resources on future EV programs. As I hope you saw earlier today, we’re pleased to announce that Alicia Bohler Davis will be joining Ford as the president of Ford Blue effective excuse me, pro effective October 1. Alicia is an incredibly talented and experienced business leader, and her experience across automotive and technology, logistics and customer experience is exactly the right skill set that we need to accelerate Ford Pro’s transformation towards software and services and of course greater profitability. Andrew Frick, who has done an excellent job leading Ford Pro on an interim basis will continue to lead Blue and Model E going forward.

Model E delivered a significant margin improvement in the quarter as a team continued to scale operations as we more than doubled the volume in Model E, while also lowering the material cost and driving other operational efficiencies. On August 11, that will be a big day for all of us at Ford. We will be in Kentucky to share more about our plans to design and build a breakthrough electric vehicle and a platform in The US. This is a Model T moment for us at Ford, a chance to bring a new family of vehicles to the world that offer incredible technology, efficiency, space and features. In Ford Blue, US sales in the quarter were especially strong.

We gained share and committed higher pricing, reflecting the strength of this incredible product line that we have at Ford. And as America’s largest automotive producer and the best selling brand in The US in the first half of this year, we support a level playing field globally. We value our ongoing cooperation with the administration on trade policy and CO two emission standards. We expect tariffs to be a net headwind of about $2,000,000,000 this year, and we’ll continue to monitor the developments closely and engage with policymakers to ensure US auto workers and customers are not disadvantaged by policy change. We’ve been working hard with the administration.

We believe our cycle plan is right for this tariff environment for the coming years. The latest round of tariff policies, especially the deals in Japan and Europe and potentially South Korea makes our strategy even more compelling at Ford. Our bet is not to compete in high volume generic segments that typically require overseas production for cost competitiveness. Instead, we are doubling down on what we do best, trucks, iconic passion products, Ford Ford Bro, and breakthrough technology that you will soon see on our forthcoming EV platform. Now on emissions, America’s top brand, we further in are investing in giving our customers choice along their low c o two journey, New investments in ice, more efficient and performance hybrids and full electric vehicles are all on tap at Ford.

We support a single durable national emission standard to ensure sound industry planning. We proposed reforms that are on the table now give us greater powertrain optionality and reduce our need to buy CO2 credits. In fact, our commitments to purchase CO2 credits have already been reduced by nearly $1,500,000,000 Further changes will balance standards and customer choice and has a potential to unlock a multibillion dollar opportunity over the next two years, primarily in Ford Blue, which has carried a lot of the compliance burden. EPA’s announcement this week will give us more flexibility with respect to our product mix and volume. Once finalized, this will provide further opportunities to improve profits next year and beyond.

And finally, reaching world class vehicle quality remains our top priority as a team. Although we face challenges with our older vehicles, the quality improvements on recent model years shows we are on a favorable trajectory. As Kumar explains, we are on track for our best initial quality metrics in over a decade at Ford. Ford is now the most awarded brand in JD Powers 2025 IQS study, and Link has improved two years in a row. We’re proud of the progress and we expect our warranty costs to decline in the years ahead.

Andrew?

Andrew Frick, President, Ford Blue and Model E, Interim Head of Ford Pro, Ford Motor Company: Great. Thank you, Jim. I will start with Ford Pro where our disciplined customer led investment strategy is paying off. Year to date, Ford Pro share increased one point in The U. S.

And 3.2 points in Europe. This performance is driven by a diverse vehicle lineup and continued investment in the Pro portfolio. Delivering on uptime, the most important KPI for our customers, is a shared mission that we have with our dealers. Over the past year, Ford Pro solutions have boosted customers’ uptime by reducing repair time by 20%. As Jim mentioned, we have increased our capital spend on Ford Pro, and our dealer network has done the same, investing $2,000,000,000 of their own capital since 2022, primarily to expand service capacity.

And we have grown our global mobile service network by 18% to more than 4,700 units, enabling growth in service parts penetration. All of this translates to higher quality earnings, and connected vehicle data fuels that growth. Paid software subscriptions climbed 24% to 757,000, with average monthly revenue per unit, or ARPU, also growing 24%, driven by roughly a doubling of the telematics and fleet management subscriptions. Now let us look at our global business. In The U.

S, our sales were exceptionally strong this quarter, growing 7x faster than the industry, with market share up 1.7 points sequentially. In addition to the share gains, our transaction prices increased more than the industry average. We had our best quarter in twenty years for total trucks, driven by F Series, Ranger and Maverick. Full size Bronco posted a record quarter, and the all new Expedition and Navigator are off to a hot start with sales up 44% and a 115% respectively. We also sold more electrified vehicles than our two main domestic rivals combined with EVs and hybrids at close to 14% of our U.

S. Mix. The success of our From America, For America campaign allowed us to reduce our U. S. Gross stocks by four day supply.

Building off that momentum, we entered the second phase of our From America, For America campaign earlier this month, and our sales pace remains strong. Our dealer stocks are healthy, our product portfolio is fresh, and we have new entrants like Explorer Tremor and F-one 150 Lobo hitting showrooms soon. We are confident our product lineup and U. S. Footprint will continue to drive profitable growth opportunities.

Outside of The U. S, our global portfolio has made year to date share gains in key markets such as Canada, Europe, South America and The Middle East. China remains a strategic export hub, especially for growth nameplates like Territory and the new Ranger PHEV built in South Africa has been well received in Europe and is now shipping to Australia. Lastly, Blue’s international operations were profitable in all regions, including China, during the second quarter. Now I’ll turn it over to Kumar.

Kumar Gahotra, Chief Operating Officer, Ford Motor Company: Thanks, Andrew. Our industrial platform is delivering tangible progress on our core priorities, cost and quality. We’re making this progress by establishing key enablers, leading indicators, and output KPIs. Enablers are the most important factor. For example, we have roughly doubled the number of our safety and technical experts.

We have significantly increased testing to failure on critical systems like powertrain steering and braking. We’re also monitoring more vehicles in the field through connectivity. Insights from these initiatives are also being incorporated into current production. This has contributed to some more recalls in the near term, but it is the right thing to do for our customers. Let’s start with cost.

We are still targeting to deliver a net improvement of $1,000,000,000 this year, excluding the impact of tariffs. A significant driver of these savings is material cost improvement actions, which will also flow through into 2026. It is important to note that in the second quarter, our costs would still have been down even if the special field service action or the FSA was included. Turning to quality. Warranty is the largest component of our competitive cost gap.

This is a major cost opportunity for us. There are two warranty costs investors should focus on. The first is warranty coverage. This is the expected cost to cover our bumper to bumper and powertrain warranties. Coverages make up about 60% of our total warranty costs.

As the quality of our vehicles improves, the cost of coverage per vehicle should come down. In fact, we are already seeing this improvement. Our latest zero and three months in service metrics are tracking towards our strongest performance in over ten years. The second part of warranty costs are FSAs, costs associated with recalls and customer satisfaction items. We are not satisfied with the current level of recalls or the number of vehicles impacted.

We are working to reduce the cost of these recalls. For example, we are leveraging AI solutions to improve parts traceability to help minimize the scope of recall units. Roughly a third of our recalls over the past three years have been software related, and we are addressing this head on. We are using over the air or OTA updates to reduce customer inconvenience of having to take the recall units in for service. OTAs are a game changer.

OTAs cost over 95% less than physical repairs. While OTAs and other process improvements are helping us make meaningful cost improvement, most of our recent FSA costs are tied to vehicles engineered several years ago before we made all the robust process changes across our industrial system. As a result, the expected FSA cost improvement will not impact the bottom line as quickly as improvement in coverage costs. There is a lag effect until the majority of our car park reflects vehicles designed and built under the strengthened processes. But there are early indicators that are encouraging.

For example, the FSA costs for ’24 and ’25 model year vehicles are at least 50% better than ’20 and ’22 model year at similar time in service. Now I’ll turn it over to Sherry.

Sherry House, CFO, Ford Motor Company: Thank you, Kumar. Ford’s transformation journey is well underway, and our objective to build a higher growth, higher margin, more capital efficient, and durable business is evident in our ongoing performance. Our global revenue grew 5% in the second quarter, outpacing wholesale growth of 4%. We achieved our fourth consecutive quarter of year over year cost improvement, excluding the impact of tariffs. And we delivered 2,100,000,000.0 in adjusted EBIT despite a net tariff impact of about 800,000,000.

The durability of our business has also strengthened. The consistent positive performance across our industrial system helped us close roughly 1,500,000,000.0 of our competitive cost gap in material costs last year, and we have delivered year over year improvement through the 2025, excluding tariffs. Now for some segment highlights. Ford Pro continues to demonstrate its structural advantages, a large growing share of US and European vehicle volume, complemented by the largest and growing service operations network. This vast network is helping us rapidly grow our high margin software and physical services businesses.

Pro’s revenue grew 11% to nearly $19,000,000,000. Its 12.3% EBIT margin is driven by a strong product lineup, disciplined pricing, and the increase in mix from our high margin, capital efficient services business. We we feel confident about pro demand in the second half, supported by policy changes that should drive a recovery in small business activity. Ford Model e delivered solid top line growth with revenue more than doubling to 2,400,000,000.0. Our margins improved nearly 44 points, largely related to mix, driven by the full year launch effect at the European Explorer and Capri models in the newly launched Puma.

Mach E and Lightning also improved their material costs in 2025. From a capital perspective, Model e continues to make targeted investments where we have breakthrough innovation, such as our next generation EVs, and where we have a distinct advantage, such as our LFP battery technology launching in our new plant in Marshall, Michigan. Consistent with our goal to improve capital efficiency, we are actively pursuing options to maximize the utilization of all of our assets. You will hear more from us on this in the future. Ford Blue earned nearly 700,000,000 in the quarter, reflecting profitable market share gains, higher net pricing, and cost improvement.

This was overshadowed by the nonrecurrence of last year’s f one fifty stock build following the new model launch and tariff headwinds, which drove lower EBIT and margin in the quarter. Ford Credit is a source of strength and a strategic asset for the company. In the second quarter, Ford Credit delivered 645,000,000 of EBT, up 300,000,000, reflecting improved financing margin and receivables growth coupled with continued strong portfolio performance. Ford Credit also paid a 500,000,000 distribution in the quarter, bringing total year to date distributions to 700,000,000. Total company adjusted free cash flow was solid at 2,800,000,000.0.

Our balance sheet is a competitive advantage. It’s strong and getting stronger. We ended the quarter with more than 28,000,000,000 in cash and 46,000,000,000 in liquidity. And over the last week, we bolstered our liquidity with two incremental actions, a new $3,000,000,000 delayed draw term loan and a 1,000,000,000 sterling UK export financing arrangement. These transactions were proactive, providing flexibility to refinance the roughly 5,000,000,000 of debt we have maturing in 2025 and 2026 and at a cost that’s significantly below a traditional unsecured offering.

With these actions, our liquidity is historically strong, providing us with invaluable flexibility, including the ability to invest through an economic downturn and continue to fund growth in areas like Ford Pro, while some competitors may be forced to pull back. This strength, combined with the consistent free cash flow generation, is the foundation that allows us to consistently return capital to our shareholders. In accordance with our commitment to return 40 to 50% of trailing adjusted free cash flow, today, we announced the declaration of our third quarter regular dividend of 15¢ per share, payable on September 2 to shareholders of record on August 11. So let us turn to our 2025 outlook. For the full year, we expect company adjusted EBIT of six point five to seven point five billion dollars, adjusted free cash flow of three point five to four point five billion dollars, and capital expenditures of about $9,000,000,000.

Our updated guidance reflects a strong underlying first half performance across our three automotive segments and for credit, including our continued improvement in cost. Our full year outlook assumes a net tariff headwind of about $2,000,000,000, reflecting approximately $3,000,000,000 of adverse gross adjusted EBIT impact, offset partially by 1,000,000,000 of recovery actions, primarily market factors. US industry sales of 16 to 16 and a half million units, industry pricing to be about flat, and lastly, a net cost improvement target of 1,000,000,000, excluding the impact of tariffs. Given the potential range of outcomes related to how the net tariff headwind will play out by segment, we’re only providing a total company outlook for the remainder of the year. In summary, our business transformation is well underway.

We are laser focused on capital efficiency and cost improvement, and our strong balance sheet gives us the power to invest through the cycle and act opportunistically. I’ll now turn the call over to the operator for q and a.

Leila, Conference Operator: We will now move to our question and answer session. If you have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application. If you have joined by phone, please dial 9 on your keypad to raise your hand. When you are called on, please unmute your line and ask your question. We will now pause a moment to assemble the queue.

Our first question comes from Emmanuel Rosner with Wolfe Research. Please unmute and ask your question.

Emmanuel Rosner, Analyst, Wolfe Research: Alright. Thank you so much. First question is, I was hoping you could give us a little more color on the drivers of guidance change and and improvement in particular. You’re obviously absorbing larger tariffs, you know, 2,000,000,000 of tariffs that were not in the initial guidance. And so what are the drivers by bucket of improvement versus your previous outlook?

And if at all possible, I’m curious about the EBIT, but also the free cash flow.

Sherry House, CFO, Ford Motor Company: Sure. So let me just first by commenting on the the guidance. So our net tariff was estimated at $2,000,000,000, and our guidance came down a billion. So our guidance illustrates the strong improvement in our business. We also kept our free cash flow the same, versus the outset of the year at 3 and a half billion to 4 and a half billion.

And the $9.08 the 9,000,000,000 for CapEx is, approximately the high it’s the high end of our prior guidance. The guidance is underpinned by the strong performance in the business, which is primarily in the cost area. And as you know, we have a target of $1,000,000,000 of net improvement on a year over year basis. We’re making terrific progress on that as you’re seeing in our numbers. And we’re really focused on sustainable improvement in warranty and material cost that will make its way into 2026 and beyond.

And currently, we have a very fulsome pipeline of opportunities to support that.

Emmanuel Rosner, Analyst, Wolfe Research: Okay. I appreciate that. So this is mostly because that was already your target, this cost improvement, 1,000,000,000 x tariff. So are are you targeting a a larger number now? I’m I’m I’m just generally trying to understand, you know, why sort of, like, the underlying performance better.

I guess, where where do you expect that underlying performance better to materialize on a full year basis?

Jim Farley, President and CEO, Ford Motor Company: We’ve seen it in manufacturing efficiency and our negotiated cost for parts. Those are two areas where we’ve accelerated past our own targets. There’ve been some, you know, some ins and outs on the billion dollars, but those are the real strong parts of the business that we see. And also, obviously, the market equation for pro is very strong.

Emmanuel Rosner, Analyst, Wolfe Research: Okay. Understood. And then separately, Jim, I was curious on on the back of some of the, you know, recent changes in in US regulations and a more relaxed environment. Curious about Ford’s appetite to potentially be more, you know, strategic about some of the spending on on the EV side and whether there’s actually room to potentially cut this back in any sort of material amounts in the future once you get a chance to essentially assess the impact of of these software regulations.

Jim Farley, President and CEO, Ford Motor Company: Well, you’re you’re absolutely right. The EPA’s, you know, decision and and their posture has really changed a lot in US. And, you know, being number two to Tesla and EVs, we’ve learned a lot the last three years and having a full range of truck hybrids. We’ve learned a lot. And there’s no doubt about it that we’ve had to change our EV spending and capital allocation pretty large, you know, pretty massively.

You and there and a lot of investors, hopefully, will get a chance to come to Kentucky and you’re gonna see the future of our EV platform shift from where our first generation products are to now. We’ve definitely moved out launches. We canceled some products. We’ve we’ve made the right choices on in terms of battery chemistry change like LFP in Michigan. I think we’re very well positioned for the reality of the EV market with the customers today.

I’m equally excited about the changes we’re making in our powertrain choice. We we’re kinda moving from being the dominant player in truck hybrids in The US to offering e revs, p revs, and and a full range of hybrids across our lineup, especially our bigger vehicles. We think that’s a much better move than a 60 to $70,000 all electric crossover. We think that that’s really what customers are gonna want long term. And, you know, we’re investing a lot in more durable ICE powertrains.

The good news is that we’ve always built our business around flexibility of the powertrain. So our manufacturing operations can adjust to these. And a lot of the EV spending that’s come down has been reallocated to pro, including pro services. I think that’s gonna be great for our investors and great for the employees. We think the rule maker will be finalized by December and in the short term, we’ve already made mixed changes.

We’ve descaled our our credits, our c o two credits by a billion and a half already. There may be more opportunities on the mixed side for next year as we as you said, as we’ve full evaluate fully evaluate these opportunities. Not much is happening in Europe and the rest of the world. This is really just a big shift in The US and a big opportunity for Ford.

Emmanuel Rosner, Analyst, Wolfe Research: Great. Thank you.

Leila, Conference Operator: Your next question comes from Dan Levy at Barclays. Please unmute your line and ask your question.

Dan Levy, Analyst, Barclays: Hi. Good evening. Thank you for taking the questions. First question maybe is, for for, Jim, Kumar. One of you can opine on this.

There was a a a blog post, Kumar, about two weeks ago on the back of your recall, and there’s a comment in there that you’re applying higher standards. But with that, you’re now going to potentially find, issues, that on previous, model year vehicles that maybe haven’t been reported yet. So appreciate that the warranty coverage is getting better, but, it seems like the recall piece is remaining a headwind. So what confidence is there that the recall piece is going to improve, especially as there may be now with higher quality standards, additional recalls now that you’ll need to report?

Kumar Gahotra, Chief Operating Officer, Ford Motor Company: Yeah. Thanks for the question, Dan. As I mentioned, two big components, 60% coverage is getting better, solid evidence there. FSAs have a much longer arc, but not all FSAs are directly tied to higher cost. For example, we’ve had a lot of software FSAs that are a lot lot cheaper to fix.

And there are some some early indicators that the vehicles, for example, twenty three to twenty five model year, are substantially lower in FSA cost than the previous twenty two to twenty four model year window. But I think it’s way too early to really draw any conclusions on FSAs yet because the longer arc is driven by our need to turn over the entire car park before you can clear out all the older issues. So I would say good improvement on the on the coverages side. For example, twenty five second quarter was better year over year if we exclude that special FSA. And coverage is costs are significantly down versus second half of last year.

So mixed. Strong pro progress and more, coverages. FSAs FSAs are still a bit opaque.

Dan Levy, Analyst, Barclays: Great. Thank you. Maybe if I could just, as a second question, ask about your recent market share performance, which has been quite strong. And maybe you could just talk to, a, the the $1,000,000,000 offset on the tariffs on the market factors, how you’re thinking about that between share and price. And b, do you believe that your share is sustainable given we are now seeing some tariff relief?

How committed are you to the current market share that you’ve gained?

Andrew Frick, President, Ford Blue and Model E, Interim Head of Ford Pro, Ford Motor Company: Yeah. Thanks, Dan. It’s Andrew. On the on the sustainability of our share, we do believe we will be able to carry that performance into the second half. We’ve seen, from an industry perspective, we saw a very strong first half of the year.

We did start to see some pullback in demand, which we then which we now expect to see a softer second half with a full year industry of around 16% to 16.5%. In the world of pricing around that, we expect, as Sherry said, to see net pricing around flat full year. What we’ve seen in the retail side of the business is pricing has been a little bit higher, so we expect to see pricing up about 1%. On the commercial side, we’ve seen a little bit more pricing pressure, but our Super Duty pricing has remained really strong. So overall, we see flat net pricing.

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

Dan Levy, Analyst, Barclays: Great. Thank you. Our

Leila, Conference Operator: next question will come from Mark Delaney with Goldman Sachs. Please go ahead.

Mark Delaney, Analyst, Goldman Sachs: Yes. Thank you very much for taking the question. I also had a question around the changing emissions policy environment. I’m hoping you can better help investors better understand how Ford is balancing the opportunity to see improved mix and lower costs as a result of the changing emission policies in The U. S.

While also remaining competitive with your EV technology, including relative to the Chinese domestic OEMs that are increasingly selling their vehicles on a more global basis?

Jim Farley, President and CEO, Ford Motor Company: Thanks. Yeah. We’re we’re already reducing our credit buys. We are changing our mix towards the fourth quarter this year, and we see a pretty big opportunity next year. As I said, multibillion dollar opportunity over the next couple of years.

On the EV side, I’m really excited to show everyone, you know, where we’re going on our EV. We’ve been busy the last three years kind of in behind the curtain. No one could really see how we’re allocating our cap capital and what our new EV strategy. We are out of sync in a good way with our competitors who are now fully loaded with all their EVs, and they’ll have to commit to them for full cycle of product. Ours is coming out, you know, in the next year or two starting.

So you’re gonna see a lot of news from Ford on our EVs, and our strategy is very simple. The we believe the only way to really compete effectively with the Chinese over over the globe on EVs is to go and and really push ourselves to radically reengineer and transform our engineering supply chain and manufacturing process. And that will come to life soon, and I’m excited to show everyone. This is this is the a model t moment for the company, as I said, and that will become clear for us. We really see not the global OEMs as a competitive set for our next generation of easy EVs.

We see the Chinese companies like Geely and BYD, and and that’s how we built our vehicle, how we’ve engineered, what kind of supply chain we’ve used, and and the kind of low content in our manufacturing. And a key part of that is our LFP battery built in Marshall, Michigan. And it’s a big advantage for the company. We’re the first one to to build it at scale. It also apply it also has the PTC.

We’re thankful that congress upheld that. That’s a key part of our profitability road map to transition in these lower cost batteries. Can’t wait to show you the product and the platform, so stay tuned.

Mark Delaney, Analyst, Goldman Sachs: Looking forward to it. My other question was on autonomy. The company made the decision to shut down Argo about three years ago given the time to market and returns considerations for robotaxi. But today, there’s a number of robotaxies now on the road, a partial and fully autonomous technology is improving. So I’m hoping to better understand where Ford stands on level three and level four technology.

And how important do you think partial or fully autonomous technology may be in driving the kind of recurring and more durable profits that the company is targeting? Thanks.

Jim Farley, President and CEO, Ford Motor Company: I see. You know, BlueCruise has has done really well for us. The margins have held up. The pricing for level two and level two plus plus looks looks a lot more robust than a lot of the other ADAS features. So I think we’re off to the races, and we will continue to over the air update improvements to BlueCrews.

Lane change, ramp to ramp, we have a lot of opportunities to increase the ODD. And I think that profit and those margins will stay strong for for a few years until it starts to commoditize. We are making a lot of progress on our level three system. The eyes and and that that will be a major moment for the company. We really believe this is the key opportunity for retail customers.

And we have the right team, all those Argo engineers who stayed at Ford. They’ve been really busy enhancing level two and and building out a level three. So so stay tuned. I can’t wait to show everyone. We are not going to be the first with a level three system at low speed, for example, that are out there today.

We want a fully functioning level three high speed highway application with a really decent ODD where a lot thousands, millions of customers would be able to use the system. On l four, we’ve been thinking a lot about our strategy after Argo. You know, what looks very interesting to me is the service side of that. These are large fleets. They’re gonna need someone to adjust the instrumentation and repair those vehicles, and Ford Pro is a fantastic partner for fleet management of those large fleets.

And they’re no different than our, you know, our transit vans. There are some differences, but we think we’re really well positioned to take advantage of the very profitable parts and service, as well as offering level four to some of our commercial customers in in a van format. And we’ll have more news coming on that, but I suspect but that’s that’s where we’re really focusing on level four.

Dan Levy, Analyst, Barclays: Thank you. Our

Leila, Conference Operator: next question will come from Joseph Spak with UBS.

Joseph Spak, Analyst, UBS: Thanks so much. Jim, I wanted to get your pulse on, I guess, a, what you’re hearing, but maybe more importantly, b, what what Ford wants in in light of some of the, you know, the the tariff discussions have been happening and what might happen with Mexico as, you know, Japan and Europe now got reduced tariffs. Because on the one hand, obviously, lower tariffs are are gonna help you absolutely. On the other hand, it’s it’s a relative disadvantage for you versus maybe some of your competitors given your US footprint. So may maybe you could help us understand the range of outcomes on on the USMCA negotiations that you’re planning for.

Should we think about a 15% rate or lower, or is it more nuanced than that given, you know, The US content requirements? So I I guess, basically, like, what what is Ford really lobbying for in the conversations with the administration?

Jim Farley, President and CEO, Ford Motor Company: I think to put it simply, Ford as the leading auto producer in The US and the leading exporter with the most UAW workers, we’re very clear with the administration. We want to simplify the tariffs so that we can make up for, you know, that gap between the bilateral, you know, import tariff rates and what we’re paying in our our tariff bill. Our tariff bill is $2,000,000,000, and that’s a net number. We see there’s a lot of upside depending on how the negotiation goes with the administration. We’re in daily contacts with them, and at this point, I would say they’re very productive conversations.

We’ll give you more news when we when we get it. But we have a lot of opportunity even as the most American company with the $2,000,000,000 liability. We have a lot of opportunity to simplify, especially parts tariffs, and re reduce that liability considerably, which would be upside for the company. You know, the reality is our our competitors now all have to pay 15% import and hire for Mexico. They can’t change the footprint anytime soon.

Those tariffs were not around a year ago. This is an opportunity for Ford. Yeah. It may be it may be less than 25%, but I think we found with administration, they’re they’re really committed to companies like Ford, and they are going to work hard to reduce that liability.

Joseph Spak, Analyst, UBS: Thanks for that. I guess just maybe sticking on policy. I heard I heard you mentioned, I think you said you’re gonna scale back compliance credits by a billion to billion and a half.

Emmanuel Rosner, Analyst, Wolfe Research: Did you mean Yes.

Joseph Spak, Analyst, UBS: Purchases or is that is that what you are, like, what was what are you what were you planning to expense this year in the guidance, and what are you planning to expense now? I know you did about 200,000,000 last year. I’m just trying to think about how much of a profit tailwind that could be in ’26 and beyond.

Sherry House, CFO, Ford Motor Company: Yeah. We’re we’ve expensed about 200,000,000 thus far, and I think you could you could think about that being a reasonable quarterly rate going forward. So not significant.

Jim Farley, President and CEO, Ford Motor Company: And on the credit side, you know, it’s very clear to us that, you know, the California situation has changed a lot, so we can descale our credit contracts and our purchases. That will be material for the company. The most material for Ford in the end is gonna be changing our mix. And we have high demand for our pro and larger SUVs right now. We have high demand for some of our non electrified powertrains.

And changing that mix is a multi billion dollar opportunity next couple years. So, you know, that that’s what’s gonna come through for the business. We just have to finalize the rule making, which probably won’t happen till the end of the year.

Dan Levy, Analyst, Barclays: Thanks so much. Sure.

Leila, Conference Operator: Your next question comes from Federico Marendi with Bank of America. Please go ahead. Federico, your line is now open and you were able to unmute on your side.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company0: Good evening, guys. Sorry about that. Just wanted to touch upon the electrification initiatives. And I understand that now the regulation has changed and the overall environment in The U. S.

Has shifted. But I was wondering how does Ford balances the different commitment in the regions where op it operates, like The US, Europe, and even China in terms of capital investments on the electrification portion of the business?

Jim Farley, President and CEO, Ford Motor Company: Yeah. Thank you. Yep. We we really see the pure EV market in The US seems to us very clear. You know, small vehicles used for commuting and and around town, so to speak, and we’ve been working really hard with our Skunk Works project and can’t wait to show everyone, you know, where that lands.

And commercial, we’ve been, you know, the dominant player in commercial EV in The US and we think that’s gonna be a robust business. But we wanna shrink the number of top hats. We’ve always focused and told investors we wanna have a very simple lineup with not a lot of complexity in top hats. We have some of our competitors that have 10 or 15 top hats. That’s not our strategy.

We’re gonna have just a few. And we’ve made the adjustments in timing, we think, and to to be in segments where we can actually make money on EVs. Globally, we’re focused heavily on partnerships. Partnerships for EV, we think, is the right strategy. We believe that the supply chain and the platforms are quickly commoditizing.

You cannot differentiate yourself, you know, on that aspect, especially for a vehicle. Now, it is a little complicated with electric architecture. You gotta work through that, but we know how to do that now. We’ve been partnering with JMC and other brands globally for a while. We know how to do the we think we know how to do the the electric architecture with a partner.

And you you should expect from Ford in these other regions where electrification is very important to to partner where we need to. And we will use p haves and other solutions for commercial customers that makes sense for them, you know, based on the local registration requirements. I think we have a good strategy. It’s been I I have to say I’m very thankful that we move fast because we learned about the market changing maybe before our competitors, and we can reload our capital and have the right plan planning for this new reality of pure EVs.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company0: Thank you, Jim. And my second question would be on the mitigating factors for tariffs. From what we’ve heard, basically, you, Ford, and even other OEMs are kind of moving some redesigning their vehicles and putting some Continental standard into optional with the new model year. From your internal analysis, how do you expect customer to react from these changes?

Jim Farley, President and CEO, Ford Motor Company: Do you mean recontenting, or could you be more specific? I just wanna answer your question the right way.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company0: Yeah. Sure. With that, I mean, that let’s say, model year 2025, you had a certain vehicle with a certain trim with with trim, which had which it it had some standard content. From what we have heard is that the same vehicle in model year 2026 has some content that, basically, the customer would have to pay up for that same content that last year was standard.

Jim Farley, President and CEO, Ford Motor Company: I see. Thank you for your question. Look. We we in the segments that we compete, a Bronco or an f one fifty or Super Duty and Explorer, we do very well in those segments. So we watch our competitors really carefully.

We’ll match them on specification, But we we we also know what customers want in our trim series. So, Andrew, do you wanna say anything about how we’re changing our spec?

Andrew Frick, President, Ford Blue and Model E, Interim Head of Ford Pro, Ford Motor Company: Well, we constantly look at our spec to to customer wants, obviously, and that does change by by by segment, by vehicle line. We’re also balancing the cost improvements that we’re seeing across the vehicle lines as well. So we’re using a lot of the vehicle off the data, a lot of the customer utilization rates to make help us make those informed decisions.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company0: Thank you, guys.

Jim Farley, President and CEO, Ford Motor Company: Thank you.

Leila, Conference Operator: Your next question comes from Tom Narayan with RBC Capital Markets.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company1: Yeah. Thanks for taking the question. So first one, I I know you guys didn’t give segment guidance, but just curious in terms of how we should think about for modeling. So if we look at the EV business, you know, we know the consumer credit is going away in September. That probably means some you know, maybe a stronger q three, but then q four is negatively impacted.

Just curious if that results in lower sales of EVs, the credit going away, is that is that actually a net positive for the EV EBIT being that each car is still losing money? Is or is it that there’s so much fixed cost associated that it would still be a headwind? Just curious how we should think about that dynamic.

Sherry House, CFO, Ford Motor Company: Yeah. You know, so as as you get into that further in q three and q four, if we were to pull back some of our US EV production, most likely, you would be moving that into other areas. So maybe you’d be leaning a little bit more heavily into Europe where the mix and the contribution margin is stronger or moving into ICE, you know, ICE products. So you could you could calculate that you could have some uplift there on a financial basis if that was to play out as you described.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company1: Okay. And know, we’ve been hearing from some of the European OEMs some headwinds in the commercial vehicle side in Europe. Yeah. I guess it’s not a smaller piece of pro, obviously, but just curious how you guys are managing that dynamic. I know you in your prepared comments, you said you’re gaining, I think, three points of share there at pro in

Jim Farley, President and CEO, Ford Motor Company: Europe. But Yes.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company1: How big of a headwind is that for you guys? Thanks.

Jim Farley, President and CEO, Ford Motor Company: Well, you know, we we are very successful, the one ton transit business as well as the pickup market in Europe. And, you know, we have a brand new vehicle. Literally, it’s brand new. And and so that’s that’s doing really well as is a brand new Ranger. So we we have this brand new lineup.

I don’t know about the competitors and where they are in their age of their products, but it seems that Ford, our pro business in Europe is very strong now based on our new v seven ten, the one ton. And then there’s there’s another factor that’s important on our financial performance. This is a first generation where we are building for other people. We have the Volkswagen pickup truck as well as their van off our platform. We’re now starting to scale their their platform, and that is really helping our cost basis.

And remember, our cost base is in South Africa and Turkey, so they’re very low. So, you know, the other the other reason is we’re not only increasing our performance because we need products, we’re also becoming more profitable on the margin basis because of our cost, and that that’s a good thing for us.

Dan Levy, Analyst, Barclays: Thank you. Your

Leila, Conference Operator: next question will come from Daniel Roska with Bernstein SG.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company2: Hey. Thanks for taking my questions. Maybe, Jim, after the discussion on tariffs and the changing in compliance regulations, if we take a step back, imagine tariffs stay in place, but you get a more streamlined emission standard in The US. So that, as you explained, enables the lower compliance costs and probably better mix over time. What do you think?

Are those two awash traded off against each other, or is that actually a meaningful positive tailwind if I kind of sum up the impact of medium term tariff changes and medium term emissions changes?

Jim Farley, President and CEO, Ford Motor Company: Yeah. It’s a great question. I know I I think it’s it’s a bit tricky at this point in time to handicap the ins and outs on that, but I would say the emissions tailwind is pretty substantial. Both on Model e, as Sherry said, but also on our Blue and Pro business, especially Blue, which has taken the brunt of the electrification journey globally. So I would say, you know, I think we’re I think we’re, you know and that is not the reason why we increased our our guidance.

Our guidance was, as Sherry said, based on real cost traction. But if you had to handicap the second half of this year and next year and what could go right, I mean, depending on how the submissions works out, that’s definitely a tailwind for Ford. I mean, look at the mix of our products with Pro and Poohoo and, you know, that that to be able to build what customers really want is going to be a financial tailwind for us.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company2: Yeah. Great. And maybe as a slight related follow-up, I’m gonna ask you to take out the crystal ball to some degree. With each additional tariff deal that is trade deal that’s coming in like Japan and Europe, Would you agree that this kind of increases the likelihood we will not return to a pre 2025 kind of policy landscape when it comes to global trade?

Jim Farley, President and CEO, Ford Motor Company: Can you explain a little bit more what you mean on the last part of that, the pre 2025?

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company2: Well, basically, you know, a a very low tariff rate for imports into The US, basically. And because the market has been discussing going back and forth, will tariffs stay in place? Will they not will they not stay in place? And to me, it seems like if we’re now putting deals with Europe and Japan and likely South Korea and then USMCA on top, I’m unsure whether the next administration would see any reason to change that again.

Jim Farley, President and CEO, Ford Motor Company: That is that is a really important question to answer. We increasingly see Europe, North America, and Asia becoming kind of regional regional businesses with trade tariff rates that are aligned for those three or four regions. And I believe that is a very long term change. Now because it’s happening in multiple things, not just tariff. It’s happening with electrification and c o two requirements, And and it’ll happen as well as the Chinese OEMs go global and start to localize outside of China, and they’ll pick the regions.

And the regions will pick them. So I I believe this is quite a a fundamental change. We were just talking before the call chain started about how fundamental everything seems to be changing in the car business, and this is one of the factors. And and I do think USMCA negotiations can be very material for our North America health. And these tariffs feel like, especially the ones in Europe and Asia into The US, feel kind of long term for us.

Yep. Are they big enough to change to radically change the footprint? You know, at this point in time, it doesn’t look like it. Hard to tell, but that a lot of that will have to do with the administration’s commitment to companies like Ford that committed to The US production. And, you know, what is their what is the what is their point of view gonna be with this $2,000,000,000 liability we have?

And and depending on, you know, again, we’re having very constructive conversations with them being the most American company you can imagine. But depending on how that works out, you know, this this could actually reverse and and we could get a sustained advantage being an American company. So stay tuned. Brilliant. Thanks very much.

Thank you.

Leila, Conference Operator: Your next question will come from Edison Yu with Deutsche Bank.

Dan Levy, Analyst, Barclays: Hey. Thanks for getting me in. First one, I wanted to ask about pricing. I think you called out some weakness on commercial fleet side. Curious if you can elaborate a little more on that.

And maybe just directionally, is that supposed to stay kind of a headwind through the rest of the year? Is that gonna improve, become a smaller headwind? Some color would be great.

Andrew Frick, President, Ford Blue and Model E, Interim Head of Ford Pro, Ford Motor Company: Hi, Edison. It’s Andrew. Good to hear from you. Just a little more texture on the commercial side. I I think the what we’re seeing in there in the pricing is the full size pickup is remaining relatively strong, which is really good.

This the weakness that we’ve seen has actually been across the van business and the van segments. And there was a lot of competitive pressure that we saw coming out of the second half of last year and into the first part of this year. It seems to have stabilized actually. So we’re actually optimistic around that holding for the rest of the year, but it was mostly in the van segment.

Dan Levy, Analyst, Barclays: Got it. Got it. Thanks. And switching gears, I wanted to come back to a comment, Jim, earlier on on autonomy. I think you mentioned that you could do some something on the on the Ford Pro side providing service.

I I’m curious what kind of what that would kinda maybe look like. Would you go to, like, a certain partner up with someone? And does that kind of rule out any interest in actually producing some sort of integrated Thomas vehicle?

Jim Farley, President and CEO, Ford Motor Company: It’s early days. I mean, we’re in the first inning of this rolling out. It is very exciting for me to be in the industry in forty years and see all all these autonomous robotaxis. But, you know, the technology is fascinating. But as far as making money off the business, you know, which we have to bet on our capitals, leaders of the company, you know, we think that, you know, if if these robotaxi fleets are are large fleets, I’m not sure it’s gonna be a super profitable business, but someone’s gonna make money on owning those fleets and maintaining those fleets.

And, you know, this is a very congruous capability versus our service build out for pro. You know, we have nothing to announce today, but this is quite intriguing for us as a company. We we really feel like the fleet management opportunity is a a big upside for for Ford Pro. We’re doing it digitally today. Part of those software that we sell that Andrew mentioned, that’s going at 24%, you know, is fleet management software.

It’s very popular. Going into the physical fleet management is is a different thing. It takes capital. It will require leasing and a lot of other, you know, more capital intensive investments. So we have to be, you know, thoughtful about that.

But we are very intrigued about these robotaxi fleets, what they could mean for pro and our dealers over time. Again, nothing nothing that to announce today, but I I think you’ve heard what we said pretty clearly.

Dan Levy, Analyst, Barclays: Thank you.

Kumar Gahotra, Chief Operating Officer, Ford Motor Company: Thank you.

Leila, Conference Operator: Your final question will come from Colin Langan with Wells Fargo. Please go ahead.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company3: Great. Thanks for taking my questions. I just want to cover the guide implies an improvement, first half into the second half. I think SAR would imply it’s saying about flat. Tariffs are supposed to be about flat.

What would drive that improvement in the second half?

Sherry House, CFO, Ford Motor Company: Well, we would have some of our material cost items are coming in in the second half. Also, a lot of the work that we put into place on warranty, working with the dealers, working on our time to repair. A lot of these things are also looking to be implemented in in the back half as well. Also, just some of the volume volume issues with Kentucky One shutting down in the past. So you had you had the idled period.

So you’re you’re getting the now positive impact of not doing that and not having the destocking that that we did in the, you know, the first half.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company3: Okay. And then you mentioned several times that that I guess the guidance the underlying guidance seems to have improved because of cost. It’s kinda surprising because you just had record recalls year to date. Can you parse that out? What is like, what kinda actions are actually driving that cost that’s better than what you expected back in January when you initially guided?

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company2: It just

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company3: feels like recalls, I I gotta imagine it’s a bit worse. Right?

Jim Farley, President and CEO, Ford Motor Company: Just to be specific, as on recalls, we need to make it really clear to everyone that the number of recalls and the costs are are not related. Half of our recalls this year are software. When we do a software recall, we can do an OTA. It’s literally 10% of of repairing something mechanical. And and so, you know, that that’s just it’s not it doesn’t work like coverages where it’s, you know, very correlated to to the number of of actions we have or or defects.

And what we we said before and it’s it’s clearly happening, the manufacturing team is finding a lot of efficiencies year over year, more than we expected. You know, obviously, in the billion dollars, we have all that broken down by function, by group, all the way down by plant in the case of manufacturing. And and Bryce’s team has been able to accelerate beyond even in the logistics area of of of savings in our manufacturing. And the second would be we have been more successful working with our suppliers on either getting a redesign part or negotiated a part that’s that’s better. And that’s great to see.

And and oh, by the way, we have really nice pipelines for next year. Anything else to add, Kumar?

Kumar Gahotra, Chief Operating Officer, Ford Motor Company: The coverages the coverages are improving as well.

Jim Farley, President and CEO, Ford Motor Company: Yep. Morning coverage. So the cost of our defect

Andrew Frick, President, Ford Blue and Model E, Interim Head of Ford Pro, Ford Motor Company: be clear.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company3: Is also decreasing. So recall costs, even though we’ve seen a lot of headlines, are are actually not worse than you expected starting the year?

Kumar Gahotra, Chief Operating Officer, Ford Motor Company: If you exclude that one big special item. For sure.

Dan Levy, Analyst, Barclays: Yeah. Yeah.

Kumar Gahotra, Chief Operating Officer, Ford Motor Company: Yes. The answer is yes, but excluding the special item.

Lynn Antipas Tyson, Executive Director of Investor Relations, Ford Motor Company3: Okay. Okay. Alright. Thanks for taking my questions.

Jim Farley, President and CEO, Ford Motor Company: Sure.

Leila, Conference Operator: This concludes the Ford Motor Company second quarter twenty twenty five earnings conference call. Thank you for your participation. You may now disconnect.

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