Ford Motor (F) Q3 2025 earnings call transcript

Page 1 of 19 Ford Motor Company Third Quarter 2025 Earnings Conference Call Thursday, October 23, 2025, 5:00 PM Eastern CORPORATE PARTICIPANTS Jim Farley - President, Chief Executive Officer Sherry House - Chief Financial Officer Andrew Frick - President, Ford Blue and Model e Kumar Galhotra - Chief Operating Officer Cathy O'Callaghan - Chief Executive Officer, Ford Credit Steve Croley - Chief Policy Officer and General Counsel Lynn Antipas Tyson - Chief Investor Relations Officer Page 2 of 19 PRESENTATION Operator: Good day everyone.

Lynn Antipas Tyson: Thank you, Leila, and welcome to the Ford Motor Company's Third Quarter 2025 Earnings call. With me today are Jim Farley, President and CEO; Sherry House, CFO; Andrew Frick, President Ford Blue and Model e; and Kumar Galhotra, Chief Operating Officer. Joining us for Q&A will be Cathy O'Callaghan, CEO of Ford Credit, and Steve Croley, Chief Policy Officer and General Counsel. Also with us is Alicia Boler Davis, President of Ford Pro. Jim will give a high-level overview, followed by Kumar on industrial progress, Andrew on market dynamics, and Sherry on our financial review and guidance. 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. Upcoming IR engagements include Andrew Frick at the Scotiabank Conference in Toronto on November 18th and Sherry House at the Barclays Conference in New York on November 19th. Now I'd like to turn the call over to Jim.

Jim Farley: Thanks, Lynn. Before I get started on earnings, I wanted to welcome Alicia Boler Davis to our team and to all of you. Her leadership is critical as we build our incredible powerhouse, Ford Pro, into a durable, product software services powerhouse. Alicia will cover Pro starting on our Fourth Quarter Earnings call. I'd like to thank the Ford team, as well as our suppliers, and all of our dealers for delivering a very strong quarter. We not only solidly beat expectations, but our underlying performance has Page 3 of 19 Jim Farley (cont’d): us on track to raise our full year 2025 EBIT guidance if it weren't for the impact of the Novelis fire in Oswego, New York.

Sherry will provide details of the financial impact of the Novelis fire. And I'm very pleased with our team's swift and decisive response to this challenge. We immediately mobilized a dedicated crisis team, worked around the clock with Novelis to secure alternative aluminum sources for our operational lines and accelerate a plant's recovery. Several top leaders and I personally visited the site to support all of these efforts. In addition, we are adding up to 1,000 new jobs to increase F-Series production to recover loss volume and fulfill strong customer demand. We have made substantial progress, in a very short timeframe, in both reducing the 2025 impact and putting in place an exciting recovery plan for next year.

Turning to our results, our Ford+ plan delivered a record 50.5 billion in revenue and 2.6 billion in adjusted EBIT. Once again, we made meaningful progress in cost and quality thanks to the disciplined execution of our industrial team. Kumar will share more details. I'd like to thank President Trump and his team for the recent tariff policy developments, which are favorable to Ford as the most American auto manufacturer. Credit based on our large US manufacturing volume will allow us to offset tariffs on imported auto parts we need for a strong American production and manufacturing base. In addition, tariffs leveling the playing field for those imported medium and heavy-duty trucks is a positive for Ford because we are no longer disadvantaged for building every single one of our super duties here in the United States.

We also continue to watch for relief from tailpipe emissions, which may come as soon as the end of this year. Federal legislation has already scaled back California's ZEV rules, and we anticipate a meaningful reduction in federal requirements next year. We are adjusting our product mix accordingly. Our Ford+ plan is designed to win in the market among four key trends. Markets are more regional now. We all need tailored strategies. Customers are more fragmented between retail and commercial. This requires unique services and digital solutions for both. The competition is getting tougher. Namely, the Chinese OEMs are expanding globally, and the industry faces lower returns due to the EV overcapacity and global pressures. Thankfully, our strategy plays to our strengths at Ford: iconic work vehicles, passion products like Mustang and the off-road franchises like Bronco and Raptor.

We're also prioritizing hybrids across our lineup, including the development of extended range hybrid options. In the near term, I believe EV adoption will now only be about 5% of the US market, but this is going to grow especially for affordable EV vehicles. We are well-positioned for this with the Universal EV Platform, which underpins digitally advanced, very spacious, and appealing products that start at around $30,000. Page 4 of 19 Jim Farley (cont’d): This is not a distant plan; it's right around the corner for us at Ford. Sourcing is at 95% complete now. We are testing vehicles. Will begin installing equipment in Louisville for the UEV later this year, and we are on track to start production of our LFP cells at Marshall, Michigan, plant later this year.

To compete, we need innovation and hyper-cost efficiency. In this capital-intensive environment, smart partnerships will be essential to us. And our largest near-term opportunity is closing that cost gap and achieving world-class quality. Kumar?

Kumar Galhotra: Thank you, Jim. Our industrial platform is delivering tangible progress in quality, cost, and modernization. Improving quality is the single biggest driver to close our cost gap. Better quality lowers warranty expense and reduces recalls. Four key elements are essential for sustainable warranty cost reduction: seamless launch execution, minimal defects, greater reliability and durability, and time. You need time to clear the car park of old issues. It all starts with a clean launch. A bad launch creates years of warranty and recall problems. Over the past two years, we have radically improved our launch quality. We are on track for best-in-class performance across six nameplates, with three more nameplates in the top quartile. This is based on J. D. Power warranty analytics data.

Also, Ford was the most awarded brand in J. D. Power 2025 U. S. initial quality study. We're also catching defects earlier in the process through rigorous engineering reviews where leaders sign off to ensure accountability and fixes happen in real time. Our next focus is on long-term reliability and durability. We've identified the specific parts and systems needed to achieve industry-leading reliability. To get there, we've implemented a new powertrain testing regimen that is up to seven times longer than before. It includes extreme use cases that help us find issues we previously only found years after the vehicle was in the field. Now, it takes time for these improvements to improve our recall numbers as older models have to work their way out of the system, but we're already seeing our recall costs shift towards more aged vehicles.

And since the peak recall period is in years three to five, we expect a meaningful improvement soon. On cost, we delivered another quarter of year-over-year improvement, and are on track for a net $1 billion improvement this year, excluding the impact of tariffs. Lower material cost, freight and duty efficiency, and lower warranty contributed to this. This is the result of a fundamental change in our team's operational DNA. We have dedicated work streams, reducing the cost of parts, optimizing repair times, and transforming how we negotiate with our suppliers. We're also modernizing our facilities and IT to unlock the next level of efficiency. We are systemically deploying AI across the entire industrial system. For example, we have significantly improved CAD loading times to less than a minute, and we have added 900 AI-powered cameras across our plants to detect quality issues at the source and help us mitigate supply disruptions.

Thank you. Now over to Andrew.

Page 5 of 19 Andrew Frick: Thank you, Kumar. I will start with Ford Pro, which is thriving due to our diverse vehicle lineup, service parts penetration, and growth in our integrated software and services. Our specialized dealer network is a significant competitive advantage that is difficult to replicate. Dealers recognize the importance of customer uptime, and they continue to invest, adding another 1,700 service bays and 500 mobile service vans over this past year. This makes Ford the largest mobile fleet in the U. S. , providing a structural advantage and brand differentiation for both Pro and retail customers. We have intentionally diversified our revenue streams for more durable profits. For example, softness in government sales this year was offset by strength in small to medium businesses or SMB.

Our channel mix is now well-balanced across large corporations, SMBs, and government and rental fleets. In software, Pro's paid subscriptions grew 8% to 818,000 subscribers, and we're also seeing growth in our ARPU and attach rates. This is producing a flywheel effect. For example, customers who subscribe to our fleet software have a service parts capture rate up to 20 points higher, which also helps us win sales from new competitors in multi-make fleets. There's upside to software via strategic partnerships. Our new partnership with ServiceTitan, the largest software provider to the trades, is a notable example of this. We are embedding our real-time vehicle data directly into their workflow, combining the insights from Ford Pro's data services with ServiceTitan's Fleet Pro software for a real-time view of fleet vehicle data.

Customers will be able to manage vehicle maintenance, streamline services, and simplify repairs. Now, in our home market, industry conditions were strong this quarter with a SAAR of 17 million in positive pricing. Our total U. S. share grew to 12.8%, with growth outpacing the industry, despite our phase out of the Edge, driven by key products like F-150, Bronco, Explorer, and Expedition. In fact, the all-new Expedition is red-hot, gaining over three points of segment share, with 75% of customers choosing high-end trims like Tremor. And we continue to lead the hybrid truck market with about 70% share.

Lastly, our ample inventory does position us for a strong fourth quarter and helps to insulate our retail sales from the near-term impact of Novelis. We will end this year with leaner retail stock levels between 55 to 59-day supply, with gross stock down 11%. As we look at 2026, even with our net recovery, we forecast being down roughly another 6% to about 520,000 units of gross stock, a disciplined approach, yet still leaving US headroom to look for more market opportunities. Now I'd like to turn it over to Sherry.

Sherry House: Thank you, Andrew. Ford continues to make great strides in our journey to build a higher- growth, higher-margin, more capital-efficient, and durable business, and that progress is evident in our ongoing performance. Page 6 of 19 Sherry House (cont’d): In the third quarter, our strong product lineup drove global revenue growth of over 9%, roughly one and a half times faster than our growth in wholesales, and we delivered adjusted EBIT of $2.6 billion, flat with the prior year, despite absorbing a net tariff headwind of $700 million. The durability of our businesses strengthening. Over the past three years, total company EBIT from software and physical services has grown by over 20%, and our revenue growth has diversified across regions, segments, channels, and software and physical services.

Furthermore, our industrial system has delivered on their commitment to consistently deliver cost improvements, excluding the impact of tariffs. Total company adjusted free cash flow was strong at $4.3 billion in the third quarter, with 5.7 billion year-to-date. We ended the quarter with nearly 33 billion in cash and 54 billion in liquidity. Our balance sheet is a competitive advantage. We are disciplined in our capital allocation strategy, and we are focused on the areas driving expected profitable growth, such as our UEV platform launching in 2027. We remain committed to our investment-grade rating in returning capital to shareholders. Today, we announce the declaration of our fourth quarter regular dividend of 15 cents per share, payable on December 1st to shareholders of record on November 7th.

Now, turning to the segments. Ford Pro delivered another solid quarter. Revenue was 17.4 billion, and EBIT was 2 billion with a robust double-digit margin. Revenue and volume grew by 11% and 9%, respectively. Growth in EBIT was driven by volume and continued improvement in warranty and material cost, partially offset by tariff impacts in pricing normalization in Europe and North America. Ford Model e delivered both revenue and volume growth driven by new product introductions in Europe. EBIT losses increased due to lower net pricing and an increase in spending on our next generation vehicles. Let me give you additional color on Model e. Year-to-date, Model e is at a 3.6 billion dollar loss. Roughly 3 billion of this, is from our first generation products: Mach-E, Lightning, Puma, Explorer, and Capri.

The balance is investment in our next generation vehicles, including our UEV platform. The only practical way to improve the profitability of our gen one vehicles is through one of more of the following: pricing, new cost reductions, and improved fixed cost leverage. Given current industry trends, it's clear scaling fixed costs is a challenge for most of the industry. You can see this in the multitude of recent program cancellations and charges globally. We've been proactive. Over two years ago, we reduced our planned battery capacity by 35%. And last year, we canceled our three-row program, making room for additional commercial vehicle volume. Clearly, near-term US customer and market realities for EVs continue to evolve. We will have more to share about how we are adapting to these changes at a later date.

Ford Blue achieved EBIT of $1.5 billion with revenue growth exceeding the rate of wholesale unit growth, highlighting the strength of our diverse product lineup. Higher costs were driven by tariffs, which muted progress and warranty. Adverse exchange was also a headwind driven by a weaker US dollar against the Euro and Thai Baht. Page 7 of 19 Sherry House (cont’d): Ford Credit delivered over 600 million of EBT, up 16%, reflecting improved financing margin. Ford Credit also made a 350 million dollar distribution. We continue to originate a high-quality book with US retail and lease FICO scores again exceeding 750 for the quarter.

So let me turn to our 2025 outlook. Excluding Novelis, our underlying business continues to perform well. In fact, we are tracking at the high end of the adjusted EBIT guidance range we provided in February of between 7 and 8.5 billion. This original guidance was provided before tariffs, which we have fully absorbed. Additionally, adjusted free cash flow is trending better than the guidance we provided in July of between $3.5 and $4.5 billion. Between 2025 and 2026, we expect Novelis to be a headwind of 1 billion or less. For 2025, we expect an adjusted EBIT headwind of $1.5 to $2 billion in the fourth quarter for Novelis. And we currently have line of sight to mitigate at least $1 billion dollars in 2026, and we are working to improve the situation further.

We also expect an adjusted free cash flow headwind of $2 to $3 billion in the fourth quarter. Keep in mind, the production disruptions result in an oversized short- term impact on our working capital, which will reverse next year. Given the recent announcements by the administration, we now expect tariffs will be a $1 billion dollar net headwind per 2025, down from $2 billion dollars. This brings our updated adjusted EBIT guidance for 2025 to between $6 to $6.5 billion with adjusted free cash flow of between $2 and $3 billion. Our full year outlook also assumes US industry SAAR of about 16.8 million units, US industry pricing of about 0.5%, a net cost improvement of $1 billion dollars, excluding the impact of tariffs.

And lastly, capital expenditures of about $9 billion dollars. Turning to 2026. While it's premature to give guidance, I want to share some puts and takes as you think about the industry and Ford.

First, we have line of sight to recover at least $1 billion dollars related to Novelis. For tariffs, we expect a net full-year impact similar to 2025. For compliance, the evolving global admissions landscape is expected to eliminate 2026 compliance headwinds, thereby unlocking opportunities to optimize our mix of ICE, hybrids, and EVs and reduce reliance on credits. And for cost, we plan to deliver another $1 billion dollars of cost improvements across our industrial system, which will be redeployed to strategic accretive ICE and hybrid cycle plan actions. Additionally, UEV platform spending will continue to increase as we ramp our Marshall LFP battery plant and change over to the Louisville Assembly plant ahead of 2027 launch. Before we go to Q&A, let me end with this.

Our underlying business is strong, and importantly, we are starting to more consistently execute and deliver our Ford Plus plan. I'll now turn the call over to the operator.

Thanks, Joe. This is Kumar. Thanks for the question, and thank you for your very thoughtful paper on this earlier. Yes, that is in line with our communication with Novelis. The Hot Mill, which is down now, will be operational in late November, early December. It'll then go through a quick ramp-up through December. Between now and end of the year, we'll probably lose 90 to 100,000 units in fourth quarter. We announced today that we will add a third shift at Dearborn Truck Plant and higher line speed at Kentucky Truck. So through those actions, we expect to make up roughly 50,000 of those 100,000 units in 2026.

Jim Farley: I would just add. It's important to realize that the makeup capacity next year largely depend on Ford's capacity makeup. Even if we have more availability of aluminum, the real lever for us is going to be our own upside, and we're working through that. This is still early days. We'll have a lot more to update through this quarter and into next year's guidance, but please understand that's not Novelis' restriction.

Kumar Galhotra: Yeah, thanks, Jim. All F-series plants were already running three crew, and Dearborn wasn't, and now it would run three crew as well, so the factories are basically flat out.

Jim Farley: We see this as a political issue. We're working with US and Chinese administrations. I was in DC yesterday, actually, and this issue is top of mind for every official we met in the US government. They're very well aware of it. Working to resolve it. These are fairly common parts, mature nodes, semi-components like diodes and transistors. We're maximizing our buy of these components. We got really good at doing that during the chip crisis. I think all the OEMs are doing the same thing. At the moment, the run-out dates look very close to the date when we may see a resolution. It's an industry-wide issue. A quick Page 9 of 19 Jim Farley (cont’d): breakthrough is really necessary to avoid fourth-quarter production losses for the entire industry.

That's all I'm willing to say at this point.

FSA costs are not simply a function of number of units. For example, software, OTA repairs, and other repairs like that are significantly cheaper. And as you mentioned, our initial quality has improved substantially, and the reduction in those coverage costs is expected to offset any potential increase in FSA. And I use the word potential increase intentionally because, given the large car park, it is somewhat difficult to precisely forecast the FSA number and the FSA cost. But next year, we expect the total cost coverage plus FSAs to also go down.

Jim Farley: And I also want to highlight our Q3 warranty costs were down year-over-year. Correct?

Sherry House: 450 million.

Jim Farley: Yeah. It was a really big achievement by the team, really seeing that coverages flow through one of the reasons why we were able to offset the tariffs.

Andrew Frick: Yeah, Dan, it's Andrew. Thank you for the question. As we look at the industry pricing this year, it's up about a half a point and we expect that to remain strong. And when you look at the strength of some of the segmentation out there, like full-size pickups, it also remains very strong within the industry itself. So we see strength as we move forward in those key segments, which are very important to us.

Jim Farley: And the reason why we feel comfortable is when you look at the underlying segment drivers, fuel price, construction, they're very strong for those segments. And as well, our competitors and Ford have a relatively new lineup. We have a new Expedition Navigator, we have a very still new F-150. The Super Duty is basically still brand new and we have hybrid lineup that others don't have. So I think it's a combination of our optimism about the freshness of our lineup as well as the underlying drivers of the segmentation.

Jim Farley: Thank you for your question. There's two principle drivers for investors for emissions in the US to think about. The first is a different regime, if it's confirmed in December, whenever it will be, will allow us to minimize the cost of credits that we would buy. We had those as optionality and we don't have to use them.

Sherry House: That's right.

Jim Farley: That's a really big advantage. The second one is the monetization of that is very much centered around mix. Mix of power trains, mix of series, mix of vehicles. So even if we have basically a maxed out industrial manufacturing capacity, we still have lots of levers to sell what customers Page 11 of 19 Jim Farley (cont’d): really want. And we'll put a finer point in all that in Ford in the year end when we look at next year's guidance.

Anything to add, Sherry? Sherry House: Yeah, just that we have purchase obligations about two and a half billion dollars and we think a lot of that may go away with Q4 and we're already 40% lower from where we started the year with the purchase obligations because the ZEV-related credits went away and we had no obligation any longer to those contracts. So that's a big part of what is being reduced.

Sherry House: Yes, let me just start by saying our business has been performing exceptionally well and as a result we would've guided $8 billion dollars plus. With that, you take out the Novelis EBIT impact of 1.5 to 2 billion, and that's how you get to the six and a six and a half billion. If you would've taken our prior guidance of six and a half to seven and a half and took out the one and a half to two, we would've been guiding at five to five and a half. So indeed, we do have progress in the business. It is partially because of the improvements in the tariffs and that's going to be a billion dollars.

Page 12 of 19 Jim Farley: Yes, yes.

First one, I think you mentioned that looking at next year the tariff impact should be similar. Can you just walk us through some of the assumptions around that? I would've thought some of maybe the changes in policy could help. Sherry House: Yeah, so the changes in policy, the proclamation that happened last Friday gave us a billion dollars of benefit, and that's now allowing us to offset more of our parts tariffs expense. So that's going to be the primary improvement that we saw that was driving the billion dollars that I just talked about, leading to just a 1 billion net impact for this year and enabling us to have a similar impact on tariffs and costs for next year.

So basically what's going to be left is you're going to be left with auto parts tariffs that don't have offset, steel and aluminum in particular. And that's going to be both the tariffs of steel and aluminum as well as any of the pricing impacts that come through. And then any of the vehicle import tariffs that are not offset by the US content offset that we're allowed. Jim Farley: And the timeframe is different. This year was a partial year.

Next year is a full year.

Sherry House: That's right. But when you look at the impacts, we're expecting it to be very similar this year.

And then just a follow up on, I think some of the comments you made about Model e investment. I guess how are you thinking about the Skunk Works efforts now? Obviously you talked a lot about emissions being huge potential tailwind, but obviously you spent all this effort on the next gen EV platform. Are there just high level... are there changes we are thinking about related to that? How does one move forward? Jim Farley: Great question. The EV North America market we're seeing now in the fourth quarter of this year, we believe will be very different in 27 through 35 when that vehicle's out in the market. And so two things to think about. First of all, the UEV was designed for two priorities: the lowest possible cost platform with multiple top hats in one facility and designed to really compete in the heart of what we believe is the new EV market in North America, which is affordable commuter vehicles.

We expect adoption will increase over time and the market continue to evolve and maybe the regulations evolve. We think this product's literally at the center of the future of the EV market in the US.

So how are you thinking about that impact or about managing that impact from a customer perspective? Andrew Frick: Yeah, I think... This is Andrew. Thanks for the question, Ryan. We believe we have enough stock to insulate us from the impact on Novelis in the fourth quarter given where we started the quarter, and that's why I wanted to make the comment on where we expect to end the quarter in the midpoint of our range just to give you confidence in how we're managing the Novelis impact.

Jim Farley: We can.

Page 14 of 19 Cathy O'Callaghan: Thank you for the question. Yeah, we ran it the last few weeks of September, what we call a no- tier upgrade marketing program, and it really was to generate news for the F-150. We haven't changed our purchasing policy or our risk appetite, but we are really focused on ensuring that we use these sort of incentives to structure deals for customers that they can afford their monthly payments on a sustainable basis. So I think these programs, this program, proved to be very effective.

Doug Carson: Just so I'm clear, I believe your subprime is a very small part of the overall- Cathy O'Callaghan: It's very small. Yeah, it's very small. In fact, our high risk portfolio mix is just 3% and it's been very sustainable at that 3% for quite some time now.

Cathy O'Callaghan: Yeah, thanks. We are concentrated on helping sell more products, so we're very open to new ideas. Thank you.

Jim Farley: You must have some dealer friends.

Andrew Frick: It's Andrew. Thank you for the question. Well, our ATPs are really strong right now, as you know, and we are among the leaders and above segment average. But I think that at the core of what it allows us to do is build to customer demand and give us the flexibility to manage our mix. Page 15 of 19 Andrew Frick (cont’d): As Jim mentioned earlier, on certain vehicles, especially as we look at some of our off-road derivatives like Tremor and Raptor, it gives us some headroom in that to actually manage the mix within selected vehicles.

As a quick follow-up, maybe on the quarter, if you could talk through the drivers behind Blue's improved pricing. I think $400 million was better than what you did last quarter, as well as any additional color on fleet pricing in the quarter. Thank you. Andrew Frick: Well, I think in general, as I mentioned earlier, the industry pricing is up half a point. Retail is up more. It's very strong right now. Up 1.7 points. It's driven by a lot of the tariff pricing through the year. If you look at the counterbalance to that, fleet has been down a bit. It's primarily in the van business and fortunately for us in our portfolio and what plays to our strength, our super duty pricing and full-size pickup has remained very strong for us throughout the entire year.

Jim Farley: And one of the great offsets that we've been able to manage this year with Ford Pro is not rely on the traditional fleet business. Andrew, maybe you want to talk about the changing mix of our Pro business.

Andrew Frick: Yes. We continued to increase our overall services as a percent of EBIT. Just a couple years ago, we were around 13% and we are now well on our way to hit our 20% total EBIT. Across the channels, we've also been able to diversify. We're roughly a third of our channel mix now amongst large corporations, a third with small, medium businesses and a third with government and daily rental. So we are very well-balanced, very diversified, both on the vehicle side and also with the services.

Jim Farley: But that strength in small, medium business, SMB we call it, is really a key accomplishment by the team. We heavily focus on that group and we're continuing to try to grow that mix of that group and that helps us a lot, de-risk any kind of pricing risk on the fleet.

Andrew Frick: Yes.

Andrew Frick: And we've been able to grow.

Sherry House: Yeah. Yeah. Let me clarify. So for Q4 of this year, we expect an EBIT impact of $1.5 to $2 billion due to Novelis. Then due to tariffs, we're expecting to see a positive in the Q4, because we are going to get the receivable for the billion dollars. So that's going to be a positive in Q4.

Sherry House: I wasn't sure if you were originally talking about the Novelis, because the numbers seem- Tom Narayan: No, no, no. The tariffs, because I remember in 2Q, it was -800, 3Q, -700, so it's like a plus 500 for Q4 to get to that one bill. And just understanding how to think about '26.

Yes. What's going to happen is you would have tariff costs and it'll be offset by this billion dollars that is retroactive that's coming in in Q4. So to date, we're at $1.7 billion and then you'll be able to take the billion off. You'll encounter a little bit more next quarter, but you'll be positive for Q4.

Clearly there's stranded costs. We saw the EV losses worsen sequentially. I know some of that was investment, but how should we think about EV losses going forward to next year if volumes come down? I know some of these plants are flexible, some of them are dedicated, but how should we think about that? Jim Farley: We'll be excited to give you an update after fourth quarter as we look into next year.

Jim Farley: Very big decision for the company.

Yes. So when you're compliance constrained or under certain regulatory policy, we were having to restrain some of the mix, because some of the off- road vehicles, like I mentioned before, Tremor and Raptor, are actually very negative against compliance, so we would suppress some of the natural demand within that. So as we look at next year and our overall build mix, we'll obviously match that to customer demand. We don't want to overproduce against that, so we can remain disciplined and we'll take a look vehicle by vehicle like we always do to maximize our mix within.

Jim Farley: One of the big opportunities, to complement what Andrew said on the series mix nameplate is the hybrid mix. And obviously, we can change the pricing in hybrid and change the demand curve for the vehicle. We've had to be very aggressive with hybrid pricing to make sure we cover the right mix. And that obviously is a big opportunity for us, because F-150 is a huge volume vehicle for us and the hybrid F-150 is so popular, we have opportunity there to maximize the company's results.

Sherry House: ... that I would add, I just want to make sure everybody understands, is that with the EPA changes that are likely, that is removing a compliance headwind that would've been going into next year. And so it's just really important that everyone understands that we were facing a headwind and so that's going to help to eliminate a year-over-year impact.

Page 18 of 19 Sherry House: No. None to note. As I said, we were 8 billion plus. When you take that one and a half to 2 billion off, it gets you to the six to six and a half. You add the billion dollars to tariffs. But we also are performing at the higher end of the guidance that we had put out there at the beginning of the year and the reason for that is Credit's been doing good, material costs have been doing good, the pricing and volume have been solid and so that's why we were at the higher end of the guidance.

Am I misunderstanding the commentary there? Sherry House: We would've been at 8 billion plus and you take out the Novelis impacting Q4, so that's going to be $1.5 to $2 billion, which gets you to the 6 to 6.5 for 2025. Now, when I talk about make up, that's in 2026, so that's where you get the billion dollars back in EBIT.

Sherry House: Yeah. That's right. So as of last Friday when the proclamation was signed, we now can apply a greater percentage of the MSRP tariff offset to our parts. And now that we can do that as of last Friday, we're going to get a billion dollars of benefit. We couldn't record that in the Q3 numbers, because our books were already closed and this just happened last Friday. So now you're going to see a receivable in Q4. It's more than going to offset what the tariff costs would be in Q4. And then when you add Q1, Q2, Q3, Q4 together with that positive receivable, you'll reach 1 billion net for the full year.

Page 19 of 19 Sherry House: Well, there's a lot of texture we want to take you through as we position 2026 and beyond and we're going to do that properly at Q4 earnings. And so for now, I just said we've got some tailwinds and headwinds that I wanted you to know. Tariffs, roughly the same. Tailwinds make up Novelis, likely removal of the EPA compliance headwind, continued cost savings, but then the headwinds are going to be investments in our launches in Marshall and Louisville and investments in the cycle plan. So that's what we're able to share at this time and we look forward to sharing more with you in our Q4 earnings.

Sherry House: Mm-hmm.

I'm going to turn the call over- Jim Farley: Operator, I just want to say one thing. We appreciate all of our investors and the people that analyze our industry very carefully. I just want to note that I know Adam Jonas is moving on to another segment and I wanted to thank you for your activist investor point of view. Certainly helped us be better managers and stewards of the company and I think we just wanted to say thank you as a management team for all of you for what you do, but when someone moves on like Adam, we want to highlight that. Thanks. Okay. Well, thank you, Operator, again.

To summarize, Ford is addressing the key issues affecting our industry head on. Our improved industrial system is driving consistent results on cost and quality. Ford Pro is making total Ford a more durable company and business. We have and will continue to take decisive actions to improve and grow our company. And I'm confident in a stronger Ford as we head into an exciting 2026. Thank you today.