Ford CEO Jim Farley on Tariffs, EV Strategy, and Ford Pro Growth

Navigating Tariff Impacts

• ⚠️ Ford anticipates a profit drop of up to 36% this year due to tariffs, with an estimated $2 billion to $3 billion impact.
• 💡 The company is recovering about a third of this impact through pricing strategies and leveraging the strength of its commercial business, Ford Pro.
• 📈 Ford Pro, encompassing vehicles, software, and parts, is a key driver of results, with expectations of flat pricing for the remainder of the year.

Ford Pro: A Strong Ecosystem

• 🚀 Ford Pro has added $2 billion in revenue year-over-year and over $3 billion quarter-over-quarter, demonstrating significant growth.
• 💰 Despite competing businesses having higher valuations, Ford has chosen not to spin off Ford Pro, instead highlighting its profitability with double-digit margins.
• 💻 The segment boasts nearly 800,000 monthly software subscribers, outperforming third-party providers due to vehicle control capabilities.
• 🛠️ A strong parts business, with dealers investing $2 billion in repair facilities, now contributes almost 20% of Ford Pro's profits, creating a unique ecosystem.

Evolving Electric and Hybrid Vehicle Strategy

• 🚗 Ford is the number three player in hybrids and number one in truck hybrids, planning to expand hybrid offerings across its internal combustion engine lineup.
• ✨ New hybrid models, like E-Revs offering 100 miles of electric range and a 700-mile total trip capability, show promise for vehicles like the Explorer and trucks.
• ⚡ For EVs, Ford is focusing on affordable, low-end vehicles for urban and commercial use, rather than expensive crossovers, with a new affordable battery plant in Marshall, Michigan.
• 📉 The demand for EVs has been lower than anticipated, leading Ford to adjust its cycle plans and focus on affordable and commercial segments, while also repurposing unused battery plant assets.

Tariff Disadvantages and Trade Policy

• ⚖️ American automakers face a significant disadvantage compared to international competitors due to stacked tariffs on steel, aluminum, and foreign parts, potentially costing $5,000 to $10,000 per vehicle.
• 🤝 Ford is actively working with the Trump administration and the Commerce Department to minimize tariff expenses and improve competitiveness.
• 🎯 Ford's strategy is to focus on passion products like Bronco and Mustang, work vehicles like Super Duty, and breakthrough EVs, rather than commodity segments where the tariff disadvantage is most pronounced.
• 🇺🇸 The company is hopeful that the administration will consider the predicament of U.S. manufacturers when negotiating bilateral trade agreements to support domestic production.