Ford Motor (F) 27 Oct 222022 Q3 Earnings call transcript

Good day, ladies and gentlemen. My name is Gary, and I will be your conference operator today. At this time, I would like to welcome you to the Ford Motor Company Third Quarter 2022 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. this being note, Please Instructions] event recorded. is [Operator like the Executive call this of time, to turn would I Tyson, At over to Lynn Relations. Investor Director Antipas

earnings Motor Thanks, Harris, to and CEO discussions are Also Ford CEO; include our Chief Advanced non-GAAP Jim Product and Company’s joining call. Model Lawler, President Ford With John of e. Financial third reconciled Farley, and for Today’s Gary. our in the are me comparable Ford Doug Field, These Marion quarter earnings appendix Chief Welcome and us Credit; are most today Q&A XXXX of U.S. Officer. some measures Technology references. Development the our Officer to deck. GAAP for

page factors and our that otherwise are Today’s other content most Actual stated. is actual differ You comparisons can results find an noted, significant cash also the discussion to could weighted. included results those deck about of volume cause materials at mix may important year-over-year. basis, earnings along EBIT, our shareholder.ford.com. adjusted free EPS The forward-looking XX. rest with statements on all includes flow from expectations. differ and and Unless product are the Company on are

Industrialization London. Doug tech two November fireside a Field Manufacturing at with On host EV Revolution Sacconaghi, Bank a our Engineering with Looking John Drake, e. upcoming fireside for Toni AllianceBernstein’s Model Xth, Lawler we IR and at Conference our Electric of will calendar, of chat in have VP chat Tomorrow, Ford engagements. America will analyst, and the host Lisa

Farley. Now, to I’ll turn Jim over call the

investment ago, you EVs, two new and unlocking into the commercial as vehicles, our and the We as services number Conquest growth plan two, you, iconic and services and geographically market three value both total value and and addressable our the Lynn. leveraging Ford+ appreciate software connected those years to hardware, being expand physical integrated us with today. Hi, vehicles; thesis drivers: introduced with Thank We strengths, add well connectivity everyone. for nameplates; creation and that, then had mobility. really vehicles,

like announcement strategy share course, transformation, you of Ford’s on quarter. recap update our autonomy and on the So a progress to and, our of today, I’d report course,

Our in ambition to be us, customers. are Mach-E market, and is each for They’re the has home had is attracting, taking incredible interesting In F-XXX Model scaling our three now successful now new of EV already and e launch leader now shape. all Ford in -- products. E-Transit, almost Lightning,

growth. is this So,

brand our in We’re the and U.S., beginning we’re number now two electric with just the scaling.

Our decision leverage energized to we team for create to and ICE what vehicles both hybrid at Ford. our focused best Blue do and has

that of and up have We exciting have many hits buy, products more love, -- so have launched to our a only lined but not to products come. customers our string we

We tough particularly our could one and the decisions and America our India and you have made capital dramatically. our results, today, like see market improved in allocation like international restructuring flow, have in results groups cash and South

ahead. with it that competitiveness, are quarter Clearly, continue story the we supply and And management. on roster the the have quality, nearly billion cost to here future. much successfully to of we’ve Ford, connectivity token critical on as can’t the At and we on talent our that world’s And just course, ability at software accelerate of to and at operating perhaps in forward vehicle an product improve and ship our our companies vehicles those supercharging Our still incredible like Europe software-defined we $XX from is so some updating go are calls. services into a and the investments but design same is urgency overstate strong. the chain technology who to untold and, same have China address electrification. biggest remains for best sense not to liquidity, future sheet what ended of of the time, recruited the in need balance We even in look performance be. nearly to I work we these as I we’d areas. not you healthy to as and

the partnership has no with one wind investment. we internal model on own will in our Argo will In Now, X AI very in strategy. long yet ago, completed business transaction in profitable the has X+ the increasing moving committed Based a autonomy. learned on Ford XXXX, Argo our to a important our owning that the to at I’d the levels. and more X in autonomy, X down impair believe change an that Argo of and though big and $X it have decided business impact invested a we’ve like $XXX develop billion majority billion outlook been of we shift our on and to autonomous We’ve in estimated and scale. our investments, Argo resulted autonomy strategic to Level invest It’s than defined X Level VW equal have promise business vehicle share promise autonomous of road. still in years both Level Five We Level at And after Level people. technology. focus this we that that and in the

has We’re will here’s with and do beyond Ford. in off commodity modern travel for ultimately can focus Argo give software ODDs, valuable Level lives, large on time. our us at hardware in them BlueCruise become the very back X our all with what eyes Advancing But enabling VW on. details. mission-critical This customers or I working road domains, today operating what and their to most closely and single to the want the

of BlueCruise of Ford across has deployed many zone thousands Blue on hundreds vehicles miles.

to. there a wonderful huge addressable job system. for the to and minds, space, the built the transformational ultimately traffic. everyday exciting now job, very there technology are future millions time The LX deploying algorithms partners breakthroughs And in are that Ford. potential of in streams new moment collection we technical true areas: of a aha alongside of forward the done in me neural an resources transformative help than great Yes, problem a that we complex will but new human, reliable from moment strong networks compute time, this for perhaps can electric require on us X limited toughest eliminating have we’re as this brilliant of cusp now, to tied don’t monotony at is be huge not have of in to operate a vehicles their And about that revenue to of who’ve Level day, broadly, life. market can bring the done people people mission the end like environments. of we sensing, urban domain our time several significant the learn miles giving with breakthroughs a have we -- the low-cost for broadly stop-and-go our the a Deploying without car and us. is a talent LX going going essential constraining operate today; Level sudden that system We is working to for hundred a in on the What’s highly X, and safely of is future in LX LX create it’s driverless who vehicle; Argo, of be Cruise and so muscles case will autonomy, differentiated to accessible and but used the in many operating even and expect work BlueCruise a more Blue highway accretive

we’re software LX, We generate and improving, amazing an and others, and of not us. services for only X% array Ford shipping will transformation broad they many -- introduce will software-enabled not of tools but That BlueCruise range and lineup that for Pro customers. video second not cycle plus productivity uptime already a margin, a are for software for but is fully a of our but services, first, XXX% safety updatable just constantly EVs an commercial services security,

quarter. Ford XXXX. that next by is our to end target. There change now Model we’re annual to to XXX,XXX say and me the the X carefully. reach by track switch Let EVs e, no our year With production of I’ll rate million on of

adding Mach-E shifts Lightings EV as In our Europe, be center to speak, complete vehicles E-Transit. year. of and production Mustang F-XXX Cologne the all-new scaling We’re will in out we midway in -- and next manufacturing will we’re through turning complete finish

and but those generation ground well time, of not scaling new Blue on X-ton construction only build starting in while we’ve Otosan X-ton launching E-Transit, the battery And supply September, Tennessee, also And be batteries. for Turkey production the product, we same battery those a Our at Kentucky. new a in as the going JV City a -- started SK truck will will broken breaking already a ground where already brand-new transits. electric BlueOval E-Transit to plants, we’re they’re plural, custom that is Oval new in plant EV on Ford in we’ve

supply strengthening also further We’re EV Model chain. e’s

making we raw materials, is raw progress the team need. importantly materials great Our in capacity processing securing battery that the and of those

EV customer to offsetting What’s U.S. clear We impacts have growth. the the our investments and degree drive Ford. to range customers is for Reduction will of which both the Act a yet Inflation expect in wide versus not positive for our IRA demand

the potential the of benefits IRA. of let touch So, on me some

first $X ramp partners battery available estimate as annual our JV production production. for The battery kilowatt with a opportunity to our full more From the our billion Ford ‘XX, battery large per to hour. ‘XX tax credit than tax credit in step-up we $XX in about largest, is plants up total credits of ‘XX could and combined

any that’s media overlooked. benefit Ford. the commercial important but I for second the actually read The super often of And it’s haven’t is covering EV this, one credit.

brand and commercial restrictions Ford claim $X,XXX U.S., manufacturing. on per no that they vehicle battery now vehicle with next buy in one the commercial know can the EV customers or year is You sourcing number our

of will vehicle qualify. and Our XX% preliminary that customers between estimate is our commercial of all XX%

The opportunity is retail. third

PHEVs the until $X,XXX and issued EVs this Ford tax our is at of for remain year. end credit the eligible guidance

restrict we’ll meet believe F-XXX we the certain credit credit. will year, Mustang materials further critical Mach-E In and on $X,XXX critical this materials requirement models. the ‘XX, rules Next Lightning

of critical our as material playing Oval it’s The credit develops. energy electric OEMs fourth on Department vehicles, field fairly geothermal plants supply believe right other facilities centers extraction to City, the Blue produce processing and battery U.S. now chains critical convert and the funding in for in growth our level to such of we So, FTA all and Energy for the course domestic loans, grants investments, benefit EV a components. the our as playing --

and as can these possibilities capabilities all you exploring imagine. We’re

month last know, Vegas. standards with ultra-low in dealers you e-commerce as of Now, new all non-negotiated simple fast we a North customer electric inventory, our platform, at our the vehicle-finished pricing shared of That means and all charges America dealerships. single,

dealers Many rewards will Now new And have going electric while these favorable. there’s invest response or other to specialize to real the Ford Oval meet are Pro. poised to early vehicle Blue very from dealers customers, standards been Ford for first. opt for

Blue. Super in them can’t Duty these well-executed in architectures see. What business we technology as really generation Last with powertrains, you electrical Ford we competition. what Blue seventh to set Ford there the with from Mustang. this We Churchill and the all are the Downs is apart and -- incredible very upgraded products growth. they And We amazing Turning unveiled Kentucky. showed view month, all-new see advanced

products franchises among and the to we’re and Our wait segments and you ICE and can’t new leader design hit hybrid the powertrains. the and Explorer the on I And Mustang Bronco show will and based Maverick studio that a filled is all F-XXX these new that expand derivatives leaders. derivatives new and like Ranger, with our

full-sized let’s and well improve U.S., are years for In our us the commercial we’re Ford X brand. than also lower suite In the soon of talk as trucks to be to of trust vehicles with Pro’s types and Finally, their sizes as Europe, productivity. their That’s than of and customers -- using for commercial services the vehicle one vans. all XX% more now, Pro. number about cost the more X. Businesses market

Now, and fleets, that fleets of mix includes are that a ICE multi-mix and EVs.

to grow sales opportunity has better offering Pro like real a mobile service. parts by experiences and service Ford

global third globally mobile end predictive than they’re Pro failure in significant for by XX% and driving We more unit, units paid operation quarter, us service productivity, service the In per we revenue. is telematics sequentially But X,XXX real software -- than in straight the in security month. third the Pro of per and for and expect components. service Actually, parts business, quarter. centered saw telematics, year, the dealer this to for the have by and per all of on $XX,XXX game changer software, more growth, service unit, parts over grow our

Ford of But getting new over before fleet as suite stronger management software. to the Our and keeps offerings Pro like launch let we Ford stronger, I with John, service software VIIZR me it end hand and Pro solutions this. field

many them third results. head-on. the we’re We our At the quarter tackling have as challenges so company, from clear I’m same and with a future we’re creating Ford+. time, excited about That’s

completely building incredible but Pro. just Ford Ford new of not best across and businesses -- new and We’re Model with the talent Ford e, incredibly talent Blue

a global a strongest EVs rate the we’ve in growth. board, product the by ever our across and portfolio X investing on strengthening We’re is of portfolio And think we’re year million tracking we’re to building the scale XXXX, had. run we what

together, the in no world’s one iconic to is of back. win work a There’s looking Taken statement companies of no There’s this down. and brand-new There’s holding refounding era. back. short no most slowing compete nothing

fact, accelerating transformation. John? In we’re our

Jim. Thanks,

look So, promises. and our the some I actually when see at performance real quarter year-to-date, I

and and and business. Ford to Ford the Model transformational stand Pro, while complete we distinct is how manage actions strategic our is businesses, segment three Ford First, yet, changing Blue already out e, truly

other business also the deeply suppliers. legacy everything us ultimately, about satisfaction of revealing to growth, we around by disadvantages And about customers. separation see how profitable more rooted it’s businesses our and just and it of The different quality, this to and orienting types is with design, we how going we these accelerating everywhere, in how it’s each organization are our do efficiency. in from to and So, customer manufacturing is and innovation, complexity to cost our entire than how engineering, interact that

exciting. will opportunity And me, We that leverage this the really is and of understand so, across magnitude to the provide this business. entire

deliver. need to Now, we just

vehicles stronger. Starting top-selling well like capital portfolio products first-generation Tremor. paying popular like new Second, category-leading EVs to choices product inspiring been Mustang Super E-Transit Mustang and off. customers like has our Lightning These that love. as our as our and Mach-E, allocation are F-XXX Raptor all never are with And Duty really our of our derivatives and models finally,

the electrification as strengths, to Our sustainable accelerate and have improvement America. free improving we our hone from automotive and significantly, tough generation we our investments portfolio, made And flow our focus our footprint cash connectivity. even business this is in reflects especially on North choices that product outside of

our quarter. X% In that with me in as year-over-year. financial turn above $X.X delivered $X.X range So, to results were EBIT, we to for up last $X.X automotive, guidance billion the billion We a provided month. the backdrop, billion let adjusted wholesales

supplier commodities However, has costs because as in our on and for our the EBIT rich labor, was schedule, in production mix inflationary down and which freight vehicles inconsistent end the weighed of offset had quarter been partially to $X as partners. lump-sum by on billion XX,XXX of disruptive well we of costs inventory settlements wheels due incurred settlements. the our at The suppliers, by impacts higher about

base schedule many So, chain. in our our to providing of us greater example and front of is just opportunities we the certainty supply stability have as one we global transform supply

ship focusing wheels. also automotive So, of shortfalls, collaborative ongoing the us. by quarter, with XX,XXX to vehicles we generation we’re free taking to business, strong flow parts $X.X the suppliers’ in of support our the despite and the on adverse approach while are on they address quality the cash cash very delivered production the grateful our billion for In effects improving they

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

strong to end Our numbers quarter. of remaining the billion than And balance at these was sheet ended $XX healthy. continues which quarter very billion, the and we $XX and be with the at cash include billion And in Rivian, less stake of liquidity valued $X our respectively.

commodity Now, a those down our of North X%. and driven and I’ll of $X.X billion reflecting and wheels EBIT on measures inventory. buildup of delivered inflationary by of performance a business touch higher of the the costs, units. pressures vehicles were year-over-year mix, margin diverse America Both on

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

in delivering growth from to South in our fifth ease, Europe, profit of wholesale margins consecutive In of global began America XX%. constraints continues benefit redesign its to strong chain $XXX And resulting profitable efforts, million. quarter. posted a we supply sequential

vehicle fortify XX.X% to we in continues to be commercial by And electric sequentially. position investments million, driven Lincoln spot are a continues with the China, again in we posted with quarter of its share for Our the vehicles. ending loss leadership improving business a $XXX region share year-to-date. bright making the a

over And with EBT by Our more The exciting $XXX costs. International million credit driven reflected solidly Credit to reserves launch for release the our profit Group business. by anticipated then of of loss quarter decline be delivered the normalized Ford margins were Markets this driven profitable. EBIT continues Ranger. strong non-operating higher another X%, all-new sequential run was rate that a finally, borrowing of and

me impairment of now through Argo. walk Let our

streams. a more LX achieve it’s profitably, and Jim at going LX autonomy will that’s we become provide it revenue longer larger LX+ to to assist than scale scale As annuity-like commercialization to driver technology and of take previously the required and base, expected. that which much accretive to quickly highlighted, is clear addressable allow going technologies profitable customer have

recorded we decision quarter, LX+/LX technology third being as pretax During Argo a develop And a from by noncash developed to the $X.X result, spending billion made LX special strategic impairment in a to item. the quarter, as internally technology. we the the capital third shift our

our you with share current outlook. me let Now,

in a about $XX.X with about adjusted expect XX% up XXXX the wholesales. year, from XX% we to earn EBIT, For increase in billion about

projecting cash generate now billion. adjusted $XX billion We’re flow to of $X.X free to

our America; as inflationary Our of in Ford’s in and profitability the adjusted Credit strong, new and vehicles for EBT the in earnings higher of about continuation continued strong dollar. $X year-over-year rest supply further basis values improves quarter North strength and in in borrowing no pricing; of demand auction lower, EBIT the of continued higher aggregate for at deterioration assumes orders significantly with fourth broad-based $X.X chain; newest in commodity world; billion, products; higher though supply costs; Ford about billion; ‘XX target pent-up strong a costs the

let before reporting. radically provide new we quick this new a quarter, our getting of early to questions, plan update ahead change strategic organization a to to your our reporting. So teach-in me year host XXXX on mentioned prepare event finally, next first for help you financial Last our a to quarter

purposes date fixed for March. will revised accounting teach-in, for than for the start we’ve we’ll will a full So, mechanics an is you we’ll furnish reporting rationale along But XXXX QX the our toolkit and both, we reporting reiterate business results with far the more implications we of using disclosures also models. exercise, now our XXXX reflect segmentation, and you transition and in your with to the SEC filings, which this because for and and the earnings XXXX. illustrate new share change to help At

We’ll for remarks. questions. to the line the So, our address the that wraps balance on prepared of And time please thank your open Operator, minds. you. what’s up use

John today is America. from go of Please [Operator first Bank Murphy question Our with Instructions] ahead.

lot I’ll questions. There’s guys. try keep here. it a Thanks all to the detail. for of to evening, one Good

out not us solution or that are AV here. there there’s working. the that moving of ADAS And think lot thought that might this Jim, On that’s they pivot a some Argo be pieces to behind. a believe some to far have But of I to there close from semiautonomous,

there, are going changed. curious folks take think And to you be misguided actually I’m to, more of in spill corollary like are those with assumption these So, around and that it you solution? sounds their quickly there, EV this profit if connected over in is, your may And that that will or the capital, Pro that consumer accelerate much near a how into side? are that going sort profits they what and and you connectivity And is have might term? seeing to much vehicles your you’re the opportunity efforts the generate

now. to is of our that in we our in enabler as to EVs. the our reallocation team. conference growing other a vehicles. Ford other us excited Ford a comments. the moments at of. how in like The now is to more combination we that’s we the before use Thank we vehicle so our the really fully decision Ford we’re leadership We the software. are, one. in reallocate how best John. of investment will passionate the the that’s BlueCruise ICE you, for some for in a delivering our and one Argo as that large of The LX Pro, software And are starting cycle behind a about software-updatable it’s of strategic X. usage to the a ahead, access We of seeing in we you X; in talent we the focus much we a second are X the people combination, it’s factor us It’s for few first capital, our see capital and capital it’s view talk big X we’re margins capital. ship shippable And growing we’re about And as I’m that can they is his sure and of informed we decision. confidence made off, some our patterns I on that software, BlueCruise, building. Level Doug bigger confidence the that Level funding; this It’s think And in biggest factors. return or the invested see said, Pro. And markets John, opaqueness, software in Level and John be Level key talent, the see landing public than both the -- team of confidence to the combination that have other it see maybe to the is launch But and And it midst

Yes.

we’re first constrained. So, not capital off,

top We’re of we’re on investing and in investing And billion. connectivity that our software. $XX

So, cash with billion liquidity. billion we ended the quarter of of $XX and $XX

we So, the it’s where a And a business going that’s will taking that term to long arc. relative in it. a return think business have have sizable investment and to we the putting near it decision towards behind one that’s

to So, very clear be that. about need I think we

and invest of to go some have LX that and in the savings into LX, going We’re we will that.

If I up I could on got maybe just level that. to a behind of may be you’re just confidence mean not left to as high autonomy there’s going follow that be time. develop over

a throwing have mean, that say mean, can’t skeptic towel how range? I optimist the surpass An couch that it and you in So would say up. you’re and would keep keep in you’ll to over you competition the able time. would I you confidence up actually maybe be

and I us want it’s hear HD the to investment mapping winning this all consumer-facing the the But the weather-constrained, geography, we LX all from fleet emphasize enormous a to Doug. business best, for you because all have Well, across ODs driven to that, before go-to-market I fleet, to it. complement a enormous John, as service. that think depots, still a of much of the all it’s do is about And have

how the you that And our a aside it you as big portion? we’re pieces because how technology, is the in Level see made the thinking. X, talk we’re be nontechnology factor maybe technology Doug, enormous handicapping to will have about still in on the -- very excited technologist So, the -- investment could about from a

Jim. Sure,

the Argo we’re best that’s at mission. many problem work ways, really doing, a of passionate working can is think we really constraints is tough driving I the decision, how about that diving the In doing what and LX deeply Ford the is on problem be world’s in kind to As that much people going a as And as as we the you constraint don’t the we’re are this our at to constraints. generation. of the about nearly kind into really are talent it And problem. capital projects solve. becomes of of mentioned, you that many get toughest It’s here

with have you ideas customers really it can our are to when exciting, EVs. work next-generation of how We and interact how them it can add particularly that

talent. think use So, this want to is way And we the that the them world. impact most meaningful way the we to for it’s

Langan question ahead. with go Next Please from Fargo. is Colin Wells

taking a Just your obviously, than the a And mean, for a big for follow-up on little the business? you mean, did look follow-up kind maybe clear. to is Argo, a bit. I just of I impairment. What time you line I of for you assessment you the is this X that out sort Level comment mean, guess I at? years you’re XX had point? some with I looking this a be acquirers think at made mean, decision. do before rather

Absolutely.

And the more mentioned, public markets access We that’s I that journey them very one last we challenged. Colin, a were variables, Argo we lot looked of like at and would to year. clear many As feel is access markets. include to public over the

a looked funding. decision. our X of XX hear frame? that it possible you the -- leadership and factors But looked at in your maybe we maybe partnerships time John, -- why this we at on don’t yes, team as So was making discussion

Yes.

only immediately before in it you impact the does country the LX customers see the our to plus far actually opportunity and that to business generate something out years a and services more frame. with require invested impact business. technology a to that we And capital and we as technology, started positive not all said, more meaningful LX, greater the much horizon a way required could business. when in a at to the get time being that near-term in the breakthroughs We that technology scaling but Colin, this, would in five Jim fleets, So the across looked saw be profitable the then get

that that So, the was with had part of team. discussion we the business

if have just I follow-up. And it. quick a Got

worse look at the materials $XXX million. billion $X In lowered about you terms indicate headwind. midpoint guidance change, by you But raw like of the did guidance a

You forward volume down. credit, guidance lowered came

any on you to the offset color that So release? the the headwinds outlined in

Yes.

have, really as strong think the out coming a the line player base see, can in mix and have standpoint, we in vehicle then and supply the we It’s you exposure UK. a largest the it’s I very mix things. we brand of sterling. that Europe from two vehicle we’re commercial know, The presence

so And the change closed. hard quite currency us did quarter after that hit

when that, at is one the has last of couple the that -- a dive team weeks, deep we base. things -- done, I so, doing of And spent look done, that of of the the supply on-site I’ve time Colin, lot reviews we’ve

suppliers In crisis fact, tremendously, production of XXX the that a as almost slightly. a we’re it’s easing And number deep non-chip it’s struggling ramp eases. not is chip And approaching what of those finding of there’s that easing we’re review suppliers. are to

frame We’re then issues during non-chip starting but to the suppliers many to the the as had and to of do also us in we’re able in that. has seeing and with in they’re time to do it COVID tooling, facilities mix has market, we their see ramp had maintenance in It hit not we quarter And on the with what labor tight suppliers. so expected. invested fourth or not expected. refining versus But that’s

getting low in the us brought And our down of end range. it’s the the currency really to and us mix that’s so, to

mix? is $X Okay. Sorry. in possible that billion And the offset results, pricing vehicle to that and

remain strong. Net pricing pricing. pricing Exactly, to Yes, to continues continues strong. remain

Brinkman JP Morgan. The Ryan ahead. next with go question Please is from

might $X billion in-period Are catch-up think to how the might XXXX help in would should much be what we for expenses into dimension continuing versus by to us you suppliers versus To XQ of a in nature? with much understanding how this supplier-related higher-than-expected inflation incurred incurred of XQ of more onetime in period relate that that represent know I much able as model actually portion costs of prior headwind cost? how

Yes.

with fashion, we’re the not it’s So, taking lump-sum supply that that as doing basis price. as share means we’re baked the things a QX. in that one settlements looking do piece base, so about more a into in that of about to And is, talk on we’re we’ll ‘XX what we the go-forward more

as The settlement led last $X third a well. it provided part from third a but confluence billion the of that of when is the was to we’ve quarter, reported. that. the $X quarter billion, of it So, what was also And up of in quarter for lot factors half year the $X it’s a reflects largely for ways, amount billion first we

we and cost supply combining base’s that things to accept. high and schedule our on larger to clarity frankly, with year and than we efficiencies the than shortages expected, is better complexity, having higher willing this labor ability much were had impact And of quite that around deliver One initially are the stability. we a and higher

of support conclusion included soon became it And so, all partners, needed we third the coming And call. our a lot the that CEOs. and of June told the as that to And up out time with we spent our partners. then, And in that supplier we quarter. that conclusion, all made the with to that increase amount, of way our was with you supplier conversations supplier the we we we evident made settlement and call as came

So that and of what knew. we in it got we front knew out

early considered maybe it deflating are to with to a it helpful. seem And think likely Very now commodities that tailwind to all bit it prices, Okay. in are be or likely call, commodity tailwind comes not And too spot you are at dimension a confident of commodities? to similar costs a decline you you that be XQ to compare chain face year. tailwind? do which supply to magnitude the the costs to able you’re to that non-commodity headwinds likely directionally to whether or when more in be a say headwind subsequent the lastly, next But I time the at are

Yes.

are seeing make it’s impact. a the a to come off honestly, enough prices meaningful we but point this So, significant at bit, not commodity spot quite

things will drive drive we’re quickly think Will prices? significantly. We environment the that that slow is how easing prices far Ocean know of to significantly. up down, to also are freight whole ease macroeconomic up going commodity through chain? logistic are the trying I work how all that logistics in

now, on difficult a right quarter do. to trying really And so, to that make left with call a we’re thing go, XXXX, to is

earnings off any hold today. to that year. our of beginning that to more about going on of we’re next with talk able at And be doing So, QX the we’ll of

question The Research. from ahead. is go Please Lache next Rod Wolfe with

us helpful or affordability we It’d year that volume two? the starts and peak. starting off pretty see rates between Can be thoughts average lens. consumers’ the price now you I the come up, values just and wanted this maybe to always through give over seeing lot, price vehicle thoughts about might a Jim, to inventory on the next are pricing. and had of And magnitude any transaction you’ve are and your had normalize? interplay read about market good are to on ask and if prices you obviously, of just going up normalization a trade-in kind the

It’s which Thank and EV in you, Rob. It’s includes increase. early the not are vehicles that through is Europe, interesting. is seen no commercial And We’ve -- an vehicle commercial roof. if The no demand change, in. signs literally The lumpy. interesting. coming

order bank month. grow. to It’s continues multi, Our multi

our up. have demand. We of Same continue taken windows the close to out as to commercial for EVs, order for we’ve prices vehicles because

is on the that’s retail that, to go the that’s if you XX-month see in into fine. On what I from quarter uptick slight U.S., side and different Marion, last financing, customer want

an obviously, seeing, trade-ins, challenging include of that a payments. We’re trade-ins easing and more customers for cars, little makes transactions those which for used higher

XLT, now. compared starting XLT different. We’re Lariat’s seeing right our is our I vehicle. to it’s that to one rates Lariat. volume quarter. highest turn the past, turn the the differences most small And It’s subtle reversed faster for that’s -- really in now, see F-XXX. and watch right It’s turned between and the we’re It’s but some rates than In

see So, some in you our competitors of with spending what expect now incentives. on on pricing I’d and higher -- come

and obviously, The like looking is John between opaque What Duty changes. think has specifications within said F-XXX very profitable be us. or of for watch would a for So, or fresh of and shifts, mix I to past. is It’s the so nameplate, for some mix what our mixes in as we’ve Super accounted now. right the is I lineup series important for Rod, that, already models.

only anything mention want the to you Marion, do within spec. mix we’re is seeing So, shift about payments?

Yes.

We’re quite out the year. an to higher vehicle country and we’ve have trying pockets stay to move interest with seeing level, -- with going that’s And a rates, longer bit of effect. And payment, some a same this as are transaction around payment customers extending terms starting but bit prices it’s higher term. the well. for customers it’s that, even in affordability at seen And vehicle

So, going deals many very, are you still hear of very in not areas changes strong. because quality. through In payment other about areas,

for And for guidance to Thanks gears, trying your switching understand implicit Ford just I’m Marion, that. Credit. maybe

At that the that you to I post-COVID, numbers, in year reserves. optically some end a full able from something $X looks way reserves driving one least sort was to like the at that’s I in where wondering on down had, might us there -- you give color bit, billion looks to loss $X.X that taken X.X% it’s level up expect else point, is of that’s in to receivables. little low. of brought year these if you’re now terms the around it of but of You anything billion, there QX implicit quite think, be managed or profitability? Is you that

Yes.

Let give key me just takeaways you the here.

is sheet years right significantly off balance smaller was our few all, of a than the it top. ago, First

reserves. credit Second, we’re releasing loss COVID-related no longer

back would consider what levels. reserve normal we We’re at

values to expect mostly That’s And cost are haven’t time, we which forward. headwinds, lower the tailwinds look fourth, borrowing will depreciation pass fully ease lease to and on been returns. expect behind some time our moderate us, portfolio costs higher, and we over but the rapidly. have car our used over to able we risen we are as and have that sheet grow, we Third, borrowing as do would though those continued something, as rates customers balance

Goldman from go question is Mark ahead. next Sachs. with Please Your Delaney

something be maybe capabilities? perhaps Ford you perhaps market? the of the some some And in-house or some will benefit of LX could maybe to you thinking combination? products with Argo from you just So developing to I on in think was their share input from more something bring timing suppliers some is leverage that potential

Thank you, Mark.

that vehicle. is say cycle arrival in and of All to a EVs think, Doug, we’re software-updatable with line I our updatable best the answer second would -- is this. fully I timing suited

electrical frame fully think completely all So now that in-house updatable system. of our software enhanced ‘XX of to and to is of on globally, introducing time refreshing you, kind of and its X+ Doug. controlling million Level lineup development leveraging Level architectures and EV done X vehicle, Over X ‘XX OTAs the experience we’ve for Ford

Thanks, Jim.

components will we’ll of the take can are But system and suppliers such and solution. as understand systems, a have are provide not value we its can we is is in that. of of these at imaging and advantage a system, going We core to LX our connection own ignore will capabilities LX technology. that we of the manufacturers They It radar, team own integrate vehicles. to the great that a that software. performance important connected the also level, really sensors

So, makes the the data better, we and that. have own that and pipeline collects ability to a system must better

us to in that’s the problem opportunity create autonomous in huge a exist that for customer is the experience, and out of really doesn’t operation, a how a moves unique. experience Finally, LX and actually that’s customer Ford

areas the are on in-house great and development. develop will that focus we in LX absolutely the So, those capability

us And effort. Argo helping internal team we’re really the excited with about that

Yes, we have just incredible talent.

Thank you. helpful. please. And could, more I one if quite on That’s EVs,

And ways targets perhaps term Ford. that of and do over benefit the capacity myriad years EVs make the XX or But gross toward part you I so, through potentially to Thanks. believe. amount could the change quickly mentioned IRA especially next longer think does of investment ramp the in IRA EVs, XXXX, shift the want of Ford you how over out the may this decade? the and latter into reiterated You you the

tax for including so vehicle, commercial, consumers. in who ambulances buy they the They a local just how not for credit buy of had -- to sense this being a And before. are going EV top for And evocative businesses, for This is XX% what’s people municipalities. for is brand commercial that police credit have do, vehicles emergency is It never $X,XXX we is tax U.S. a the the people in only credits. to and the Europe the a mean, who responders, this for what had accelerates of in Ford, communities, give tax going never exciting player U.S. we’re us I sure. to you for the

that’s impact the accelerate we’ll dramatic for market e-van the in business. this which demand wait So, We of adoption those going I because the vehicles. and think we’re they’re and already think can’t will our a XX% themselves second-generation these show of really only our on commercial you to EV, have EVs, speed the vehicles share We to commercial to accelerate scaling market EVs.

accelerate. hard of be not is or company, clear the marketplace. industrialization to So, to I this largest demand handicap it’s would the this play in out What’s honestly. the in like legislation said, consumer to more something customers And That’s that, of benefit vehicles? be it going yet, the side our the is will to

Capital is The Joseph next question Please from Spak with Markets. RBC ahead. go

between least get is Maybe, be me Jim, from to little then, $X we commercial your like you partners. on much think just of sort Because the skewed it just partners? that side, bit because side, you $XX. like, that we picking And XX like point, where some full should believe down how your next at and to billion seems I mentioned are IRA there the the sort I retail? of we negotiating one to would next year between of then, pack how get for direction. of think -- of it’s, really a year? should you maybe the Ford XX that Can the commercial just about, up the mix you And in starting in on and seem guess, able it should drill pretty can the EVs

-- our the middle of battery we’ve I mix. interesting are going already right still we’re wish on I’m with because imagine into now the on but mean, between, some could you the others -- there’s discussions commercial negotiation our obviously now. it in going DAs, Well, to go can into a Yes. not in I lots we go partners, deal inked But

of wish would generally right could -- don’t So, us. our fair it, imagine. that’s benefit to how both investments. with just but with partners proportional can mean, speaking, battery that I to that But you to think public think I with I I our you be cover go going of now, I to as

many profitability electric enormous, to and I customers a the our though EV, commercial is, say, the than the turn rates. the commercial have our for for EV. in we’re side, just EV completely rates different sold the On commercial business ways, profitability out three the be both, to between even are And order more and out on demand in going retail the to robust retail we’re soon. a But is EV the products, move breaking

be to interesting as we quite is of this going So and for that. all you us do for

we you, is now do And help. tricky tricky lot will that an I This sure, commercial and until are going year. I is tell that the will EV. customers part for think vehicle think who we are year do or Lightning a I this of wait to next what part -- stimulate the of end The really between really big this a So a our but help going of E-Transit. the operationally, will the profitability Pro But, is, to is just upset for for us to the equilibrium. demand. That’s have it us operationally, order

I you spirited this have it’s help How really our about it’s to you negotiations? discussion. way, Lighting So, we about the Company many -- this we a And I Lightning have our having think year, we’re EVs excited game-changer do of -- the XX% make want inside and divulge how F-XXX will change. local we to make? customers mean, John, want discussion day. quite next we We demand. even by qualify, this retail every for have the to to quite a to many our anything do municipalities, Pros already want see. including almost will which bit profitability But

negotiations. about Jim. the Not Thanks,

Okay.

I guess, maybe with I bit But talked turned you information China strategy changed you’ve since clearly have circumstances, new and has LFP since, would since -- announcements to relationship you’ve been might a like think, that the been and summer. and you’ve just other guess, again shown Argo I about willing potentially south. little earlier U.S. Maybe today, Jim, guess you’ve -- I CEO example the the change this be, adapt that even geopolitically, to the

on to update there backup Is any of any a time risk any that? So, lines? there And plan? those is

That very a is good question.

So, that’s EV, this all company obviously, I we’re a the we have now on business the and truck we profile and in as plus literally commercial pickup side. unique EV, mean, XX% commercial van have,

important and it’s important technology, affordability, is back question LFP is to for us. a So, And point, a all we think the very for Rod’s in China. IP very also

really dynamic a situation. is this So,

is of next is with supplier LFP the really a those so. have see particular you’ll still what think great we tariff importing the a contract favorable, rules to batteries the U.S. LFP And year. batteries into incorporate very I that

in But we’re question good front we is all of structure, can import of the the into localize that real on you in North you the going cells America? will So, is tell really where and do billion-dollar the now. and reality And that. build And tariff name building LFP you I just given The production that I from And go shape. LFP we’re China think, the whose not to is the that. economically Mexico? of U.S. in versus pack? when do And

for This concludes earnings Company Ford quarter third call. participation. Motor your the you Thank conference XXXX

disconnect. now may You