Ford Motor (F) 6 Feb 242023 Q4 Earnings call transcript

Good afternoon, and welcome to the Ford Motor Company 2023 Fourth Quarter Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Lynn Antipas Tyson, Head of Investor Relations. Please go ahead.

Thank you, Gary, and welcome to Ford Motor Company's Fourth Quarter 2023 Earnings Call. Jim Officer. and are Lawler, and today Financial Chief me Farley, CEO; President John With us Q&A and joining Kumar of Also for e. Galhotra, Ford CEO Model COO Credit; of of Ford; Marin COO is Gjaja, Marion Harris,

are Today's most to the of comparable references. deck. in the our measures reconciled earnings discussion GAAP non-GAAP includes appendix some These U.S.

shareholder.ford.com. can and other materials find our of earnings the You content deck at rest along with the important

those stated. Our differ includes from results statements may could our that about are Page XX. to Actual most discussion expectations. The cause also forward-looking on results factors significant differ actual included

XXXX. Unless new our on Company major EBIT, an detail March global roll for shared noted, is earnings EPS are Included With comparisons basis. quarter a is detail our and flow our last with in cash of you this in otherwise are segmentation. adjusted deck all of and segment forward teach-in table by year-over-year. this free geography, the at our we nameplate wholesales a

I engagements. few to near-term IR call Lastly, out a want

after about leave minutes side chat XX questions. longer, at call Dan ample XX will plan this us time February XX, Jim chat and will fireside with the fireside Conference. Tech, a Levy with Auto, to minutes Barclays in Navin week, New XX, CFO of Global will John We do Kumar, Pro, participate your and so Miami hour. run February in York Industrial Wolfe Conference. in want Lache in participate Rod Mobility for Lawler Auto to We take the Ford at Farley that the to Next a

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many competitor size. isn't even In our fact, months, second-place half our

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digital we have Ford. So from We developed move to system, these they with for decades really upfitters even to a able engineering really upfit and them integration We've and now already They're all with trust Fords new and Fords. old important. specs those equipment upfitters. share it their being been working upfit

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The bottom amazing vehicles. have line these we is,

adding a have position. of durability market leading share now those We're long-term products. We

We have now. a highly profitable software alternative revenue streams repair in and

magical for customers really breakthrough company believe, and the our a Ford I Pro our and, is industry.

see the for we're Quality. addressing effects We go about starting now to and negative progress. quality, don't have been into to X we've but years it

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you on KPIs every those with share will We quarter. quality

like EVs. Next thing to is I'd highlight

in and EV evolutionary change, a industry. That last out months has but a in have of this losers been That the winners will we portrayed our some change be last Now change as X Darwinian. the in seismic market slow think rapidly the could sort year.

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and strategy more happens, seismic with EV as targets. overall share the has relevant Our been change we want to never our you

spend first next that and cycle, life X single-digit that's will to deliver capital Gen are our months said, their less going mean capital. XX in we've here EBIT to bets profits the we'll over to above mid a of as number And EVs. going adjustments. get that products their Model be e's have and Our high always to those. cost we'll very of profitable on launch. larger small margins will big of And profit We're And

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software It be they've that will but will services we're that platform And now and a at several large deploy not was flexible of types a Pro. installed a to for developed base vehicles start-up. seeing only

in Chinese are the growth, the Tesla and balance of us. and EV because to ruthlessly better OEMs. that the affordable going our efficiency competition realities, some products and is for be capital the even on All bet And to market and products, ultimate our given all cost of the our returns EV teams delays profits focused of rightsizing and of

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this in year Our business our many grow will refresh we really launched launching overall vehicles we exciting, electric and have with of the Explorer EV this the lineup. as commercial Europe year because

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as COVID subsidies. you the pricing pay the move X,XXX they because moment a month converged X,XXX quickly This after we've to willing scale customer, to EVs. we retreated, benefit is you that any early As for premium into everything, are to is hybrids seen, from us. What to EVs a learned and significant we huge offer for units a not majority shock

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total in the QX. down year revenue versus half EV the was second U.S. last market. at of Look

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be important will you'll role Hybrids around go transition industry's You long for the world, variations. the here see same in our play an run. will and increasingly

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talent is Last we've want the right thing of company in to is innovation operationally And to and learned I right technical or sufficient. the breakthroughs excellence without in None are talent. happen talent. these that financially going our or mention not

go and a at that X differentiate system. to fundamental massive reward It's business delivery. the a imperative matches company. now in right the way years, and Over the it's our We running Ford, our It's change change. that culture a management last and been we're excellence operation we performance truly

that towards results compensation compensation variable benefit our business to fantastic. tied is is delivery Evolving weighed structure more and a to

And in our value to best making and bring shareholder retain are without short-term can't long-term the tied incentives this You talent and change. our creation. to John. you, now incentives Over specifically

Thanks, appreciate Jim, joining We us afternoon, good everyone. and you today.

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our consistent portfolio Capital cash of generation. the step positive right taking footprint, global driving products our Now of Ford+ back, last plan. and discipline year reflects is momentum performance the a

cost. quality We and continue delivering improvements on to see in focused and growth remain opportunities both

remarks. up Now that on your wraps address mind. please balance for of you. to questions. time the Thank the We'll the line our use open what's prepared Operator,

today first Jonas question from Our is Instructions] Adam Stanley. with Morgan [Operator

had a think the about billion want it. on versus owned you Ferrari, I about time good $X which to and movie, won. remember I I valuation I when guys by way, Jim, Ferrari, the great a of the talk a to and Fiat Ford by way, is

part worth Fiat. billion business totally today, it of is ignored was and when investors Ferrari was the $XX Now by

you, ignoring I Ford called agree, people Ford Now Jim. I a cow cash it's disagree And with are we Ferrari, Pro. has think the but

of of because agree. said of You it's kind don't or transparency opaque I kind metrics. opaque

Am this unfair, with almost Jim, can profits a assessment because being or it's follow-up. have do science what your project. all think of that funding kind this? the EV team about I I are I

and towards to enthusiasm relative there's it. a lot doing. do, But a we're we [indiscernible] can lot EVs, there's

think faced. a to shifting reality the pricing vertical versus relationships, More a buy or power this in integration, we've more capital a of OEM you're because build changes I and industry smaller different focus that to lot vehicles. seismic going see in of all generally on shifting

EV they news robust. The the and really They're hybrid the our a not us or get They hybrid the issue love cost are chance with with and make repurchase The vehicles, so very right. high-volume our very like first good to a vehicles. the cost approach loyal very in customers the including, is of They to vehicles. has generation. than bringing do ICE adjustments transition. capital, it it's a business, them is cycle us on and allows of it the lot execute that's us to Ford gives timing down, second product different a That

all cost our to think in all profitability commitments I make Model to of capital, kind to to saying important want understand. in to have of it lot of explain didn't that the our be are benefits, its of it's and And I got I also if the of return XX believe money team of I which launches, And a first months other wouldn't it. e, really that

Marin, you those, over want or John? go maybe to

sell the to roughly... EV value of vehicles. value. before for credits sell compliance can A high-margin ICE generated we Lightning the do to Each the same and, time, We EV these us high-margin the need vehicles Sure. mentioned about just the multiple us Thanks, X the we're sold allows offset Jim. building us, If can at Gen that we business allow vehicles. think what

Pro. Including

building also We're Pro. capabilities. Including customer-facing new

out customers, Tesla. that together got and shop dealers these our charging service satisfying so and is dealers. experience dealer us network both learning developing ownership high We're that to what's a our buy through we're for We've and new the with standards, there adoption. required and of We where for customer there's are demand levels changing serve

varies by adoption Now the tremendously geography.

the Jim and We've West volume us of than vehicle. to got more higher XX% loop across customers conquest those rate with We're thermal giving a electric handle customer in be the better feedback ICE As and demand for better, XX% F-XXX much the intensely on mentioned, more and we BlueCruise in seeing X powertrains. value services the the that the learning we're propagation, would like Coast, goes typical that That of Gen engineering. these ignore these market if quality. I EVs. both being is these we're developing a customer, integrated the software much the lifetime on sell vehicle. the We've deliver a how through life services remiss whole of in vehicles we much and efficiently and can got

John? else, Anything

the return really of We're EV thing stand mean, and And investing. to needs its a on know important important would on one about we I say very right? Yes. a is we're segmentation clear needs the generate own, And on things, that, to that Adam, the is, business that. I only the just top of is here. profit the it capital that

but what Now we're not towards. we're there that's working yet,

than do don't clean. to sooner important. we eventually, We And that nickels. don't we sell vehicles profitable credit or can F-XXXs Lightning later. benefit that own business a any into every this up ICE on for really that dozen other We because anything we a Model that's compliance into stand But that's ICE e point. do The -- It's has important with rather to anything get, like EV, wooden its or sell.

John. Thanks,

is although math And includes Pro actually By the they going do it's customers, Pro the quicker electric. for slower way, customers. electric than retail

if Pro December, were which more EV we're would so ever higher sales customers than more seeing makes in and sense. sense. And make cycle Pro duty our their actually, January go But electric

for even success. So for it's important our Pro,

just appreciate brief on that, Jim. a China. I just I follow-up have

China. insight having You sophisticated very guys into sophisticated of terms come across in as

there You the years. got Ambassador for Board, Huntsman been on

You JV have really partner a a** that's lately kicking Changan with with EVs.

Ford can way? capital-efficient to EV more Chinese objectives Ford how partners So work -- a achieve work in potentially help its with

knows and eye-opening who person John as right said, me, next Changan to Gamba each head China of [ trip it a Thank I spring the holy at leaders and went well. was ] X John the look really you. other us. I and last mean, was Well, to leadership really to Ford cow. for

I now. think, really overlook importance of profitable for all, is as the we overseas actually, first JMC now. of shouldn't very And export our markets important an China

We a EVs. in in different China to think our very business ICE have low going China: actually capital export with and EV. We're competitors profitable I to strategy, a really very approach

of we're really bloodbath allowing And -- don't doing we reality in China to capability watching breathtaking we our platforms jump good feet to EVs, we're it's and with a we lot carefully. we're that see kind We don't what lead time learning. China. And the are their local So that, there the EVs, both pretty a and in now in to see think learning with in in on IP partners' our about but it's China electrification.

approach this and use building think product bloodbath for I profitability. experience, globally. also concepting explosion of we're at battery in moment our digital capability a and sensing we'll in also I this profitable China but global that very and think appropriate capital, business EV And team is of low time kind tech for

thing, not profit real I think even capability loss that a as that's though or globally. we a see

our company. So different for but is works it think our strategy I quite

The next Murphy America. question is with John of from Bank

first question hot Just Obviously, here. EVs. it's on a topic a here, Jim,

NADA we're some last folks I particularly the we that EVs week, slowdown EV. and and at in dealers, traded ICE buying they're from time hearing As of in here, look seeing spent sort

you're swapping or buying Hertz actually ICE EVs And postponing they're then dumping and and and out XX,XXX So EVs orders. seeing canceling hybrids.

be it sake, like argument's getting Pro the XXX,XXX and And some EVs short happy question, not really and is sounds if both near So with your sort for side are less these the so are up have actually data think happening It's understand be those XXX,XXX volumes about a why the that Ford that sell near profitable the some here have the lot don't the on say side of but to sales right I don't, market, more on backfill have and term? you you I bit for folks you're hybrids It's to both think EVs. less on And customers the lose ICE seeing maybe at planning in have think do side, lower? side actually because of you that mean you things you not retail retail product little commercial now. failing what to if the that sort and just you're you the backfill assumptions do following that kind product the product the term. What with they term, side, just commercial on if trying might in a of degree. stories. with to you are in happy? Do are folks the you might you

imagine -- You your question. can can John, you for thank you --

portfolio because with big can for a being ICE, our to plan us EV, have out. capacity hybrids, choice You and on imagine years scaled of is this we very question course, our fundamental

quickly the can They and math quick on found. ICE showroom we what floor. hybrids. doing the on Customers breakeven evaluate between the showroom hybrid a are Here's

F-XXX, home, I on to charger require on they will like a cost they Honda or mainstream harder EV Power cost repair installing save they're an versus can the and It's of -- cost? the generator Onboard, a have change gasoline? versus how don't How at they How much I know for Pro to operating in behavior. A compare. much a efficiencies For change much save uncertain. customer will lot electrons

and that at just a interesting the we're more which brutally And does EVs seeing math they cost because Pro vehicle and utilization. of customer a of use so is higher ownership, the success is the that

at much clearer doing EV. ownership the going math a and therefore, are of of them And in some they're to lens. cost So looking

math but are that cycles doing that believe customers more these are there now do think in would always been EVs. that. has for HEV, interested people smart for I and some And we customers

investing So going time over it's a us it's business. because on good that do right. really and cost get it's the math But to worth to

hearing an do dealers? for customer customer, -- EV opaque So EV a anything what want you little the think Marin, We're to mainstream than is more I hybrids. bit just we math see say quickly on seeing we're about

Yes.

last their when we're I margins vehicles with really the strong. dealers making is their think And on seeing better in and ICE comparable actually pricing 'XX they've vehicles year. ICE what been in we're doing 'XX, than was our to

are on for something dealers this closely. But So we and money sure we are term. feel making really that's making monitor think investments good long making about I the our that

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lot a we So flexibility. have of

I in think we're shape. good

mean, them curious, I to different trying the general tour troops the in is at everything you're I one to follow-up. dealers, be your happy, just message going to line some of just and in are them your the EV the distribution Jim, moving reported of to the to right a you to get annoyed channel the are I'm dealers. all-important rumor going stuff. mean a doing around channel? direction and X-week be in around What as some

couple of messages. key A

I Ford all, a mentioned of First Pro juggernaut and that is. what profit

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So invest in Pro.

flexibility hybrid. second EV and ICE between is and manufacturing we have The thing

probably want than we're So that any in understand transition. better to shape this they other brand make we sure in that

on progress is press on partnership on quality, purchase. both investors, message to investment to pick and on up They to the has all we customer, Farley we third gas and more repairs The And want to That's now. these going are need why your step in remote, their right experience, I in them really understand the side. we and be are from should We going service, say retailing. think that to the for dealers want leaders ownership customers has customer Jim tour. I'm among that remote retail our the top. and our come to takes to private who keep our doing for

The Wolfe Lache next Rod question is with from Research.

than you costs Jim, XXXX probably curve adoption still structural you're a we're but losses that which bit $X billion discovering higher $X.X the e, are for in shallower, XXXX. of said in is billion Model EVs that that seeing implies to

a see So it there isn't maybe the because little much sounds because and choice. like ultimate committed also bit you you're benefit

here, you possibly that reaches demand when and you through can commit do question the Or of other to or either the because spending? are? and $X business improvement So have is, EPA pretty exceeding all trajectory do breakeven, billion meaningful. from that consumers ZEV and the things control lower where to stronger Because ultimately, is of

not losses it's in just then Model them But market takes that we're some see number. to bit it's on to we a go we pick some convinced maybe the make little opportunity timing adjustments opportunity e And go to with term completely want going you actually. at have that little to profitable. see and to know apart And I And going about turnaround you'll we actual ourselves vehicle yes, X. adjustments. to I huge the short Gen Well, the a think a bit. John, be unless a big in into more the it's

Yes.

capital flow So the Gen you're standpoint. seeing were We them that no we our in what now at very quickly we collapsed continue we're that at cost understand investing return environment get biggest have X Rod, X put through. a that the and course, And as think, we to our we that I a X issue they're vehicles, and the the get we of part there is won't improving that can getting But revenue cost on unless optimized and that not will Jim said, structure Gen vehicles Gen have is to market you from to the of through work is a we vehicles. of And reality. to choice. profit a launch pricing on

talked much the how is the it yes, all very benefit around modeling optimization about that. of many and the So compliance because EVs work of balance we between mother sell we

there's that's balance. can sell For of every We a the can need number there's and sell Mach-E of ICE then credits every they're we what to And and we tomorrow, sell HEVs we you'll a so with Lightning, XX ICE vehicles. balance that with sell, buying vehicles ICE as how K too. standpoint also, we see in that are available. there, improve we from the our and can and benefit, there's But

have about working now. But we what we own right X frontiers So have that we to across electric its stand business of get fulcrum there. that's to those and and our know vehicle all we as as this on have goal know to on optimize and Tesla profitable that talked because we're that's cross what there out that are be Chinese well have that And profitable, the are We is. competitors that we there. and

the benefit plus it of those. business, compliance a we be benefit capital that return So to on the profitable get from needs

know of is in to guide EVs. we're not but at lot stakeholders if a want this go year you lot don't And lot in Rod, optionality have so we have even spending. Ford a going we specific, I mean a be that of of details, I John, to but... capital

CapEx XX% about and XX% is and of this EV. year our last It's year

a as on driving of that we're range. low team be end the And to

Absolutely.

that working hard EV on leave baked. the are spend. to don't make is want call we Because we to I our with sure fact want And this totally just this

because range run of on hard we it's be business. that low really think appropriate to end working the are the to We

then I come Can kind think a at to you've line the of in see got closing material you come in Gen that you're line that you out Is cost And that a that just down. the point that breakeven the and as disadvantage saying sight Will that to starting we year? you've warranty warranty variable highlighted vehicles before said billion? commit certain on XXXX? for follow-up, $X coming this X down of time

goes that have We so EV I question business Marin, think here, our and you to warranty. the of timing leader on

to right Yes, a on now to going specific we're prepared to EBIT. timing I positive don't think when be commit we're

John to we're see our We've course going changed we over the starting year. market of levers the realities. production. to to improving to quarter-over-quarter will expect gross the margin to the mentioned are some of and We pull, continue adjust

to know since continues issues. the exactly We that X,XXX to be in to But it have and the we cost. We've because BOM the to And what's to commit inventory it's can launched happen need we're the to I know increased keep work. our working don't of was a Lightning, team C&I taken be address Mach-E is our out going on on market X,XXX Mustang and of as going out X,XXX turned we going market. to And challenge. and don't X,XXX

been dramatically we Generation issues to the incredibly deliver work of on got around costs the set learn that terms and In to and our we've for lower but about EVs, in vehicles, warranty Generation And valuable to platform. continue will with that warranty mentioned have earlier, a of batteries X costs, we thermal for obligation. our partnership X, us Kumar industrial to as

new And costs turn? a little efficiencies around, those this in would last impact from warranty probably offsetting touch pretty portfolio upon of $X starting was So be lag. the question material our this efficiencies coming of XX% But of expect system, We're to with this But bit also in refreshed. are remember, to features, the to we year. Rod, that are works, global quality the industrial year, standpoint, improvements. compliance, can UAW. to flow that And I flat start be the way through. And going the to cetera. will know, we shoots I a your more, much say there's we that incremental see you costs this a see of are billion cost see but Kumar the green have think year in about for as et costs going will be part that

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Barclays. with Levy Dan from is question next The

I go to guide for want back with Pro to CMD your is line and the that last at -- provided this already your year midteen spring. the in have margin you guide you

question robust the but a aggregate you if I product, something had very is is really know And $XX So earnings price how billion tailwinds by think X-year you sustainable think stream? I partially new experienced? this you've billion specifically, like of stretch. driven this these is, what year, is I over price the Last sustainability $X of tailwind.

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we're our think the it's real I we'll that XX% a changes units that are this never that this software the company We're high attached never our coming we never profitability software all that of started started business. and We've million optionality. So we our getting believe business. side on now. we've retail just attach of profitability with Transit our with to this And had the of from of things start risk XX% haven't because margins. that's are aftersales we is commercial never services. And volume robust the also XX% with now. like had. I portfolio and Custom for totally on Blue's just -- And kind coming the even we rates. We've effect seen Pro a really pretty getting see is XX% attach rates X.X of the that marked opportunity Ranger that had is now feel way. We focused of

of years to even which to Pro. return So in for years. a which I'm capacity your to more from next slow the be upside, what not to will hard in to would the are market, of couple more that couple we're a starts good other it about thing even the years, to construction or going But really have one time X watch predict. ground. The be get really because now? the up, we're that been fire housing about a we shovels of really is in in have last sure has robust question, spot the issues ground If Pro frame carefully, the on

And $X a Great. think as back And I just a want billion follow-up, competitors ago second to at go in costs. mentioned about that you cost on industrial CMD, then specifically, to your John, disadvantage versus your comments I Blue. the the talked a

say gap to do? getting more improvements that So how $X on versus Just it that competitors' that do still safe us work you're cost is lot sort path help mean is a it I gap narrowing understand Or we now inflow? that contextualize of billion? the to versus just narrowing now still the the your journey starting? this cost is to

and the now gap -- $X would And that Yes. traction is to should say narrow. we're billion. your it to I that's of is What starting start part the gain that

across both industrial Kumar material can that. labor. he's how more be some leading that on And share it's in details think so system, And driving in and I the to going and

we're for inflationary we are deliver us our suppliers. that $X going things. couple from and had differently a have Yes. very billion 'XX, year, fundamental year, and substantially talked different of to John. very than this Last Those example. A Well, John eased starting claims Thanks, help than about. 'XX of lot pressures the

of thing years much also our us to reduces is a more second supply the It entire us is ways. system using stable. where we color bit lot One helps our chain run and not The smoothly waste. much That lot of we're vehicle you on one a as a different freight couple allows lines, examples. In want been remove are I like of more will give is to what of our X a designs of so well. for eyes those of Kaizen we've the it are, and efficient, $XX attacking lot because were delivering cost material, a so same vehicle. benchmarking, a shields fuel with aero And team and help premium fresh certain way review some save up per couple different aero of terms and freight in in our economy that the internally last came the of doing of

So per to year. that's $XX about equivalent million

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saved one freight. So teams mentioned just about stations of I million. $X And XX completed the of about the already and recently, analysis

close kinds this that mentioned the the are year. a chain robust inflationary along that stable these with John we in billion that's help So with very save of gap along claims, $X ideas have and us supply hopper, to going less

Bank. next question Emmanuel The with is Rosner from Deutsche

can quarter. that XXXX, off cost that conviction there includes up you the major us color us pick any where fairly good all hoping give sort some just it these fourth in I and point even Obviously, of side. left to the a Are was you to actually around increased in still that drag on to, on was cost of costs? green shoots

So watching the what provide in like that in actually your we of any tailwind, reporting, should be $X in billion-plus XXXX? these markets the any terms of will

just the I talked fundamentally about. It's things

busy stability a very of have removing lot in a cost. hopper very chain, waste, of freight ideas supply We we're robust and executing: that

freight. of to all not -- fourth spend in stable chain and in quarter allows fourth premium third a money, that We're much see starting XXXX. premium us to of quarter costs lot supply more that a those us and spent did, we in down bring So

ended industrial with Liz And that base. proactively our system catching the Emmanuel, to up when of say where that what understanding identify we them 'XX would working driving done XXXX and, that together change with we that. a now as efficiencies, has And of great work is across help was well. and you spent look will things place behind base, thing that that add we a like out supply would efficient in their I front be more to we're much to 'XX, with supply And Kumar 'XX and different lot can them were a cetera, in to at time Kumar's at getting were claims. that that, actions, other the design as very they very of inefficiencies very said, et make we I to curve in things them

to bit add color So of to that's that. another

at like time fourth freight on still guess take -- looking a follow-up The these to was this. should walk we quick billion $X a still -- out? things Just I on your quarter headwind. and will play I'm

need this would about especially your secondly, in a and then a if back-end switch Ford And could Or bit sort volume curious more see of turn on XXXX? the of and for benefits be it about you So these the for year, if quarters then Blue. would some curious thoughts like number we outlook loaded? of

inventory what the you've days sort higher of historically comfortable of the been some think towards I with. like end are of

growth wondering see for volume year. this And I'm where so you

a you for XXXX in have through Yes, XXXX that model calendarization this And lot from those actions said, should so call cadre a start see design built the as I that see, working the is the identify hopper. we've a the on been of are will actions on standpoint turnover. in year up you'll think to coming we Kumar of lot What cost these there.

on traction towards So those. more a year, start the there more to you'll the of middle see lot

manufacturing so it's Some that's our where at. our of When supply, at of limit you'll supply Kumar? And of probably a where when right, mid-XXs, be. is you bit we days' expect I to of deal in Blue at the so improvements, the at little those, you the retail days' supply, it look even see we're more the about an quarters, would throughout say, to days' look low flow

to pandemic. to the decline, be you negative year X back get wholesale leaning the for it you [ at affordability going volume, which before and monthly disposable pricing XX% to standpoint XX pricing. And From So we we from pre-pandemic when then is where look back XX where takes XXXX back -- is ], what that income to to a X% vehicle it we X% we're so planning about perspective, an us step see affordability maybe X% saw up should XX.X%, levels, about think buy back we're is where a the about from into be to standpoint, about to that be expect for to the at. a year, that. industry From that expect that's to we a a planning to perspective,

see So we're line some us product in some going to mix going Blue, is on to there. tailwind Blue. pressure new top give continue which coming some We've and to got

year going as come a in And positive know, last Half Emmanuel, commercial then all that's tranches. seeing be set. you them incredible X Jim so came So of on We're to for in Pro. off Blue. And think I Pro. covered those demand they're orders

half and strength we're other to coming are now see there. continuing The through

is be ] by refreshed [ portfolio the new that or And going to year-end.

Paribas. is BNP The James Picariello with from next question

margins this for Ford losses. the respect wondering e midteens step-up tied on for of in Model with foresee year do Pro $X billion-plus Pro's Model fleet demand could course. EVs to if in volumes you a for year, companies, to just difficult. this EV And e with dimension you EV beyond associated the volumes curious the the then year, more Just help losses Like impact getting no

about just you Pro So how for profitability are well? as thinking dynamic EV the

will the is but cost offering because interest advantageous more Marin absolutely, for expanding to of Transit ask electric retail EV that. ownership coming sales not our our quite a our online. fleet, the X vans some grow we're because seeing I'll answer On Pro, Europe only we're side, On in bit also with

there electric of and -- definitely driving a vans closures will lot especially city Europe in that's that vehicles, for are so And and specifically. of kind regulations adoption other

have very So in yes, we'll for Pro. growth our robust EVs

Yes.

We expect where as growth on in sales were year of well. Mustang on Lightning. the side we Mach-E retail and out Remember, last F-XXX we had times production

And be we'll be we're that Explorer us growth. more second this grow. overlapping importantly, see we'll going to year in in Europe half of so those, help a the offering then new So launching will that's

growth. volume unit we So to see expect substantial

you negotiations supplier already are I And this stand out billion core Just cost wondering know year? any on progressed? how have component the are of the there for commercial John, And of but touched that in areas opportunity? terms savings $X in a reductions

Yes. A lot the standpoint, year-over-year again, that a mostly then reductions $X design a part it's on on. material system the through been and the is, $X design are And basis. billion of of manufacturing from that industrial we've so working efficiencies billion the it's

benchmarking been to similar had actions those pretty the ideas much and on described, that it's design-related. that working So Kumar we've

and So design, freight labor primarily.

from comes Ryan today final JPMorgan. the And with Brinkman question

decline guide strong in like check their you I about Tesla contribution do could throughout we e right? you embedded And to given billion is then little lowered that $X.X Model annualized, e margin after out recently term though, perspective? before basically 'XX? margin of their that Model what of expect that that I within be into, to a of, 'XX longer EV $X that target on rolled and think, cut anticipated variable like it's yours. losses in Obviously, feeling GM margin margin the Including end X% overall in How a Digging actually target. And how billion, the higher bit their line think saw by to 'XX aggregate. prices from progress a X% also with you're

is guide it's If targeting you're X% the 'XX with 'XX out there an really still only mystery. now, the

So it then seems over quite course to like the a 'XX. 'XX of step-up

you sources -- of mixed are to or to or to that savings? integration you how 'XX? boost need big to in that from enough are earlier layer models. X% there But comparison I about know EVs the feeling improvement that I and is know, do but expect over other don't that those sources is you you of vertical second-generation the what target? just fuel those are a in get discussed 'XX And

Yes.

the think had top come dynamics way that I that marketplace it's down and in we not the the XXXX So the put the X% significantly out clear, line time in given since there the period. is

here improving going don't vehicles we we 'XX, X%. generation down that's the next launching generation our go think said, believes from gross to to So I margin, think has year. It's margin, anybody can the through contribution on first as come to bridge I that Marin clear. and by the of as

you want to more that? do Marin, color But add to

John, I that's right. think

we're operating want. when really I to business. only the over we deliver discipline think and to this capital And year that the gross they levers profitable pulling returns Gen and kind time the really and X time, stand-alone a X around over then Gen discipline it's launching build improve profitable sticking margin be EV the on of can will

presentation. session, the attending also Thank you now for conference today's has our concludes concluded. question-and-answer This and

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