Ford's Q1 2026 Earnings Call

[00:00:00] Good day everyone. My name is Layla and I will be your conference operator today. At this time, I would like to welcome you to the Ford Motor Company first quarter 2026 earnings conference call. At this time, I would like to turn the call over to Lynn Antipas Tyson, Chief Investor Relations Officer. Thank you, Layla, and welcome to Ford Motor Company's first quarter 2026 earnings call. With me today are Jim Farley, President and CEO and Sherry House CFO. Joining us for Q&A is Andrew Frick, President of Ford Blue and Model E,

[00:00:27] Alicia Bowler Davis, President of Ford Pro, Kumar Galhutra, Chief Operating Officer, and Kathy O'Callaghan, CEO of Ford Credit. We'll be referring to 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 19 of our deck. Unless otherwise noted, all comparisons are year over year.

[00:00:56] Our company EBIT, EPS, and free cash flow are on an adjusted basis. Hello, everyone, and welcome to Kilowatta Podcast about electric vehicles, renewable energy, autonomous driving, and much, much more.

[00:01:26] I might sound a little different today. That is because I'm recording directly to my laptop, over the laptop speaker. I'm going to be honest, I don't feel good. So going and spending a lot of time sitting in a hot room recording this episode was not going to be a good choice for me.

[00:01:50] So in order to get this out, I was like, you know what? It's an earnings call. Jim Farley and the team are going to do most of the talking anyway. Had I been smarter, I would have got this out yesterday, but I didn't feel good yesterday either. And I was like, well, I'll feel better tomorrow. And, you know, I didn't. I will say, though, before we get right into the opening remarks of Jim Farley, this was recorded back in April.

[00:02:17] So this earnings call is more than a month old. So just keep that in the back of your head. I still like doing these because I do like knowing where the company's heads are at or what they're thinking when it comes to EVs and renewable energy and autonomous driving. And. Yeah, so I still think there's some value in this. I will make it as short as possible, but as long as necessary.

[00:02:46] You know, there's lots of other things that they talk about in these earnings calls for these legacy automakers that don't. necessarily have to do with what we have, what we talk about on the show. So I cut that part out. Also, it's important to note that I will edit this for the show, but I will try to leave the context in as best as possible. If you want to go and listen to the entire earnings call, you can just go to the show notes and check it out there.

[00:03:13] All right. With that, let's go ahead and jump in to Jim Farley's opening remarks. Jim's the CEO of. Of Ford. All right, let's hear what Jim has to say. For five years, we have relentlessly built the foundation of Ford Plus. We strengthened our industrial system, made real progress on quality cost and advanced our software capability and customer experience.

[00:03:43] Early this month, we took the next step in that evolution by establishing an end-to-end organization, product creation and industrialization. We unified our advanced technology, digital and design teams with our global industrial system. This change aligns with the most intensive product and software rollout in our history.

[00:04:06] By 2030, almost all of our global volume will feature next-generation electric architectures and in-house software. This applies to every propulsion type as we deliver and scale high-quality, software-defying vehicles. This new organization allows for faster decision-making and reduced complexity.

[00:04:29] This is the moment we integrate the digital soul of the vehicle, the software, all the silicon, and the user experience with our world-class industrial execution. Among other things, this alignment will support our high-margin software and physical services revenue, which was over $15 billion last year. And we expect to grow that $15 billion nearly 8% annually through the end of the decade.

[00:04:58] This service growth is driven by offering customers indispensable digital experiences and investing in aftermarket sales with a focus on customer uptime, expanding our parts catalog, and enhancing our service network. We're also leaning into the Skunk Works model to improve all of Ford.

[00:05:24] They've done an incredible job creating the UEV platform, which represents a step change in efficiency and cost, especially for the EV market. But at Ford, we're now integrating these Skunk Works breakthroughs back into our mainstream products and processes. We're applying their advanced tools and physics-based cost modeling to the highest volume internal combustion and hybrid lines.

[00:05:54] This, of course, will reduce our costs and improve quality across the board. Our product pipeline is aggressive. Between now and 29, we will refresh 80% of our North American portfolio and 70% of our global portfolio by volume. This includes the next generation F-150 and Super Duty, among many others. It also includes the launch of our universal EV platform in 2027 from our Louisville assembly plant in Kentucky.

[00:06:24] We are scaling that plant for significant volume to accommodate a variety of vehicles off that single platform. And speaking of electrification, our strategy remains focused on powertrain choice, not nameplate complexity.

[00:06:41] By the end of the decade, 90% of our global nameplates will offer electrified powertrains, including advanced hybrids, extended range electric vehicles, and full EVs. So he started off talking about digital services, but that's not where he stopped.

[00:07:01] He's like, we're going to build this for all of the different kinds of vehicle platforms that we're going to sell, hybrid, extended range EVs, and full electric EVs, as well as ICE cars. So, you know, that's not all that different than what GM said. They put a lot more emphasis on Mary's opening remarks when it comes to digital services, but Ford mentions it here.

[00:07:27] But the thing that stuck out to me anyway is that while Mary did mention that GM was number two when it comes to EVs in the United States, or North America, I believe is what it was. Ford really, you know, Jim Farley really kind of highlighted like, here's how we're going to take what we learned with our $30,000 truck, whatever it's going to be called. We don't know yet.

[00:07:58] They developed a whole Skunk Works project. They're building that truck in much in the same way that Japanese, or excuse me, Chinese automakers build their vehicles. So they took a leaf or several chapters from the Japanese automotive industry to learn how to build more efficiently. I'm sure that's what he's talking about when it comes to, you know, bring in that, what they learned from Skunk Works into their other platforms.

[00:08:28] And ultimately, if Ford is able to be successful, this is a good thing. Now, Jim Farley's actual opening remarks did not go all that long. And then they moved over to the CFO Sherry's opening remarks. And just a couple of things to talk about. I won't play her clips. I'll just do a quick rundown.

[00:08:50] She talked a little bit about getting, I think it was like $1.1 billion in tariff refunds back from the U.S. government, which if memory serves me, was something close to what GM got back as well. And then she talks a little bit more about the Novelis aluminum plant. This was the plant that caught on fire like three times in 2025. So they have plans to get their aluminum, source it from other places until Novelis is back up and running at full capacity.

[00:09:21] All right, let's go ahead and jump into our analyst questions. I've already skipped several analyst questions because they were really more about EBITDA and things like that. But this next one, when I heard the question, it made me perk up. And it was really about getting Jim Farley's take on Chinese EVs, possibly here in the U.S. So let's go ahead and listen to that. And then, Jim, maybe one for you.

[00:09:47] You know, there's been a lot of headlines recently around some potential partnerships between Ford and some of the Chinese OEMs. And even outside of Ford, there's just a lot of focus in the marketplace around some of these vehicles coming out of China, eventually potentially making their way into the U.S. Can you just give us your updated thoughts on what that could look like and maybe any involvement that you might be interested in doing there? Sure. I'm sure glad there is a lot of focus on it.

[00:10:17] As America's largest auto producer, we are totally dedicated to a thriving U.S. auto industry and, of course, safeguarding our country's industrial base. And that's just not economic vitality. It's also national security as a country. And when we see China and Japan and South Korea, they've really prioritized their domestic auto industry and manufacturing for these same reasons that I mentioned.

[00:10:46] I would say, to answer your question, we leverage global partnerships and even IP sharing, including with the Chinese OEs, to grow our business around the world. But we are really fully committed to a level playing field here in the U.S. And also safeguarding our home market because of the importance of the auto industry and our industrial base.

[00:11:14] You know, so how I would think about it is Ford continues to be a global company. We want to have the rights to win around the globe. We need IP and partnerships outside the U.S. to do that. And when it comes to the U.S. industry itself, we are extremely protective, as we should be, like China, South Korea, and Japan are.

[00:11:40] What that means is specific policies that will play out in our strategy as a company. But as America's number one auto producer, you can understand our perspective. So I actually looked at this, and I only looked at American companies. I didn't look at European companies selling cars in China. But there's only three U.S. companies that sell cars in China at the moment.

[00:12:07] That's GM, Ford, and Tesla. And then in Japan, it's GM, Stellantis, or Jeep, and Tesla. So, I mean, I kind of get what he's saying here. I don't 100% agree with it entirely, you know.

[00:12:30] I do think if you want to go out and conquer other markets, then you need to be open to those companies that are working in those markets coming into your country and trying to conquer your market. It seems like good enough for me, but not for thee kind of a thing. But at its heart, I totally understand where he's coming from. And I don't really have a problem with this answer is what I'm trying to say.

[00:13:00] If, for some reason, China sold every single American brand or American-made car or American automotive, American cars companies that are based in the United States, if China, for some reason, sold cars from all of those companies, then I would have a bigger problem with this. But in this particular instance, I think that it's a reasonable take.

[00:13:31] All right, let's move on to our next analyst question, which has to do with digital services, but it touches on a lot of different things. And a lot of the things that it touches on are stuff that I've kind of left out of the earnings call anyway. So this is a nice way to kind of tidy all that up, all the stuff that you didn't hear into one clip. So let's go ahead and listen to that. Your next question will come from Mark Delaney with Goldman Sachs.

[00:14:01] Yes, good afternoon. Thank you very much for taking the questions. I was hoping to start on the comments the company spoke about in its prepared remarks on software and physical services. I think you said you expect the $15 billion of revenue coming from those areas to grow at a nearly 8% rate annually through the end of the decade, which is a pretty good outlook over several years. So can you help investors to better understand what's driving that degree of revenue growth over the coming years? And more importantly, what does that mean for EBIT?

[00:14:32] Sure. You know, this has been a critical part of our path to 8%. And we've been planning for many years. As you can imagine, before I answer your question directly, we've had to invest a lot in our advanced electric architectures. And our dealers have had to invest a lot in dealer capacity for the service. Really, our focus is on two key areas. We have a lot more focus than these two, but these are the ones driving our business.

[00:15:01] The first is our after-sales parts business. This is a really key focus for the Ford team. We see growth in Pro. Our dealers are massively investing in capacity for Pro. But we're also becoming a lot more successful in wholesaling parts from our dealers to third-party repair shops throughout the U.S. As I mentioned, we're going to expand our parts catalog in terms of price and diversity.

[00:15:29] And we're going to start to focus on not just Ford parts, but multi-make parts. And I think the other key distinguishing element for Ford is that we have started to really get good at remote service. Almost 20% of all Ford's repair now is done outside the dealership at our customer's location. And for our Pro customers, they're especially excited about this because they don't have to come into the dealership.

[00:15:57] And this has really expanded our revenue on after-sales. Inside the company, we're very focused on improving our repair order duration. That gives our dealers more capacity, so to speak, without having to build any more capacity.

[00:16:13] I think you know our growth in ADAS, our growth in Prointelligent that Sherry mentioned are both signature parts of our integrated services that seem to be growing about 30% to 40% a quarter with very high margins. When you look at the margins of the part business and the software business, this $15 billion that will be growing at 8% a year is highly profitable for the company.

[00:16:40] It also has a different revenue risk than our vehicle business. It's more of an annuity, and a lot of it tends to be any cyclical. That means that when the car business goes down, people tend to repair their vehicles. So this fitness we're developing on the parts side will help us on the anticyclical side. That gives you, I think, some window.

[00:17:04] And hopefully, we'll be giving you more and more insights as to our ADAS strategy and pro-intelligence product rollout in the coming years. I would like it in the coming months, but okay, we'll go with the coming years. Now, the thing with this is, one, is I didn't know Ford had mobile service, so that's cool.

[00:17:26] I'm curious as to if that mobile service comes out of a dealership or if that mobile service is actually, you know, like Ford employees driving around doing that. Because he mentioned it as a potential way of them to get revenue if the economy kind of goes down and people are needing to repair their cars. So I don't know that that's a specific, he gave a specific answer on that.

[00:17:53] And at the moment, I'm not going to look because it really doesn't matter, but interesting. And then, you know, he talks a lot about the digital services, again, $15 billion, growing 8% a year, which is fairly impressive when you talk about $15 billion. 8% of that is quite a bit of money.

[00:18:16] The thing, though, is it goes back to the thing that I was saying with GM when it comes to services. There is a fine line in providing extra services that are valuable to the customer but aren't vital to the customer experience of owning the car. So having to pay for ADAS system, for instance, okay, that seems fair.

[00:18:45] Having to pay for connectivity, like a cell connectivity on your phone or on your car so that you can stream music, that seems fair. You know, going back to the, am I going to want to pay for the luxury of you turning on my heated seats? No, that does not seem fair.

[00:19:08] So I believe that GM and Ford, and most car companies, honestly, will make the right choice or the right balance in not overdoing it with these, all of these subscription fees that they could be offering you and not, like I said, charging you to pay on, to turn on something that you already have in your car like heated seats.

[00:19:39] All right, let's go ahead and move on to our next question. My other question was on the pickup market, and Ford obviously has a very strong franchise in that segment with the F-Series, but you've also spoken to adding more product with the UEV-based pickup model coming in, and then also the ICE truck you've talked about coming out of the Tennessee factory. We've also seen competitors lean into that segment more. So as you think about all the new models coming into the pickup space, maybe talk more on how much of the market you think pickups can make up in the future.

[00:20:06] And then as you think about more supply coming into pickups, what are implications for profit margins in that important category? Thanks. Yeah, thank you for the question, Mark. This is Andrew, and I think it's important when you talk about the truck business maybe to look at it through the lens of both retail and commercial, because they're both really important parts of both customer groups.

[00:20:28] On the retail side, you know, the truck business has historically been with the full-size pickup and medium pickup, but what we've been able to do is really expand the pickup segments themselves. Maverick has created a whole new segment, and we've been able to really take advantage of that. In fact, if you look at the trends in the market, you've seen a lot of car buyers go into truck and even utilities go into truck.

[00:20:54] And we think that trend will continue, especially with the type of packaging that we're going to be able to provide. It worked on Maverick, and we are really excited about the UAV pickup and the packaging that that has to really appeal to not just truck buyers, but to source from SUV buyers as well. So we see the pickup market growing, and it's really growing across segments and price points on the retail side. And Alicia, maybe on the commercial side.

[00:21:20] On the commercial side, I would just ask, I'll just comment similar to what Andrew said. We have commercial buyers that buy pickup trucks from Maverick size all the way up to our F750, and we have products in those segments, and we also have diverse powertrains, and we see that continuing to grow. We continue to have strong orders for 2026 right now from fleet customers,

[00:21:44] and we continue to see, we just opened our 27 model year order books, and we're starting, we're seeing some early indicators. So we know the demand is there, is strong, and we want to make sure that we have offerings from the very beginning, Maverick, all the way to the higher pickup trucks. How we like to think about is that we want to future-proof our truck business.

[00:22:06] To do that, we want to offer customers more choice on the powertrain side and tie the powertrains to other benefits that a truck customer would want, like a hybrid for pro power on board. And part of protecting is not just having an affordable electric pickup or hybrid throughout our lineup, but it's also having a flow of customers that move through our lineup over time.

[00:22:32] On the pro side, it helps us with the adjacency sales, but on the retail side, those Maverick, those UEB sales, they are a juggernaut for loading our whole pickup business and the strength over time, because we haven't seen our competitors invest like we have. I think the other thing that gets maybe overlooked about Ford's pickup strategy is our global strategy. Ford is really number one or number two in most markets around the globe.

[00:23:00] There are large pickup markets in Thailand, Africa, the Middle East, and South America. And Ranger is number one or number two in every one of those segments. And we are future-proofing those lineups now as we speak with different powertrains and even more affordable options. And this is critical because we're seeing new competition in those markets from the Chinese. And so our pickup strategy is a global strategy.

[00:23:27] We're trying to learn from the past where we're trying to, you know, future-proof it in a way from oil shocks or movement of powertrain to actually price points. I thought this was a good question, which is why I left it in. One of the reasons why I left it in. The other reason why I left it in is because I thought it was an even better answer. You know, trucks are obviously very important to Ford's business. We heard why.

[00:23:54] It's nice to hear what their strategy is for future products. And honestly, when I started this podcast, I was like, no, we got to go 100% EVs. And if it means that companies are going to fail and we're not going to get those EVs any sooner, then I'm okay with a little bit more of a transition. However, I do think sometimes companies use different excuses for why their businesses are failing or why their sales were down a quarter or whatever.

[00:24:23] So, you know, I'll maintain objectivity, but I do think having a broader strategy in that EV transition is a good idea. Whether or not it lasts forever, I don't know. But would I like everybody to just switch over to an EV? Yes, I think as long as the infrastructure can keep up. Like if everybody switched over tomorrow, probably not.

[00:24:53] But if everybody switched over over the next few years, you know, we have time to build out that infrastructure. So it's not a big deal. Anyway, let's go ahead to our next question. Just coming back to autonomy. It seems in Robotex, there's a lot more appetite now for some of these tech companies like Uber and Invitid to sort of quasi-subsidize the OEMs.

[00:25:17] Has your kind of thinking about Robotex maybe evolved over the last, you know, three or four months? I would say yes. Not just over the last three or four months. It's something we've been, frankly, watching carefully as it evolves because we were involved in Argo and are very well aware of both managing the fleet and the SDS system itself and the progress.

[00:25:43] We kind of knew from Argo what to look for as Robotex became, you know, the SDS itself became more proficient. And we're starting to see that now. I think how you should think about Ford's approach is that we are completely focused on having the most efficient EV and the lowest cost of ownership in North America. Number one.

[00:26:06] And number two, because of our pro business, we have the most fit repair and fleet management capability for new fleets, all fleets. And that capability can be applied to all sorts of different fleets. That's how we think about the market is emergis. And, you know, I think that's all we're prepared to say at this point.

[00:26:31] In the past, Ford has said that they're not interested in doing like a Robotaxi service themselves. It's not to say that they rolled out giving cars to other companies to let them do Robotaxis, but it didn't sound like this was something that Ford was interested in. Now it sounds like that's changed. So, yeah.

[00:26:54] I mean, I'm not surprised, to be honest with you, especially with as much money as Uber is thrown around to companies to help them develop their Robotaxis. Or their autonomous cars, I guess, would be a better way of saying it. It makes sense to me. All right. Our next question is going to be about Ford's energy business.

[00:27:21] So let's go ahead and hear what that's up to. Your next question will come from Ryan Brinkman with J.P. Morgan. Ryan, your line is now open. Feel free to unmute. Oh, thank you so much. Thanks for taking the question. Is there an update you might be able to provide on the relatively recently announced Ford energy business?

[00:27:46] Has there been maybe proactive outreach to Ford from companies that you have existing B2B relationships with on the pro side of the business? How would you characterize that interest and maybe just remind on potential timing that? Thank you, Ryan. Well, as you know, we are committed to over 20 gigawatt hours of capacity starting in the fourth quarter of next year.

[00:28:12] That will be mostly Kentucky one and a little bit of Marshall. Marshall will be really focused on UEV, but has some capacity for energy business. So that's the timing starting fourth quarter next year. The plants are coming online. We are on track in the industrial manufacturing capability of doing DC block. It's not just the batteries themselves. It's the containers. It's the management of the battery.

[00:28:42] That's all coming together as we expected. We are very active in contracting customers as we speak. We've had a lot of inbounds and a lot of interest in Ford because they understand that we have the best tech. We have a lot of advantages financially, and we have a great service and sales capability. And, of course, the company has deep relationships with a lot of these as vehicle customers. So they know us. They know through pro that we're a reliable company.

[00:29:13] And all I would say, Ryan, is that the energy business is the key element of our bridge to 8% margin. Okay. So I will make this response and all other responses brief. In between last night when I was recording this, I went to sleep early because I was tired. And then I got up this morning. I felt much better. Took my son to his music class.

[00:29:37] And one of the things that the lady who's doing the tutoring for the music class, she's like, hey, just so you know, when you enter the number to get into the apartment complex, be careful. Because a lot of people rub their tire on the curb because it's just designed in a really weird way. It's like, cool. So I typed my number in. Guess what I did?

[00:30:00] I took a massive chunk out of my tire and scraped the heck out of my wheel, which makes me so happy. I can't even tell you how happy it makes me. I'm kidding. It doesn't make me happy at all. So I had one of my kid's friends in the car with me and I said some not safe for work words or not safe for children words, but I said it underneath my breath. So there's a chance they didn't hear me. Small one. I know this kid pretty well.

[00:30:26] And she got a worse mouth than I do sometimes. So I think it's okay. Anyway. So, yeah, $323 later, I'm sitting in a Costco parking lot trying to finish this up before going to a pool party that I'm extremely late for. It's been a great, great day. Also, I have the air conditioner off because I'm sitting in my car so you don't have to hear that noise. And it's 105 degrees right now with a lot of humidity in Arizona.

[00:30:54] So also, this is what I do for you folks. Anyway, so in terms of this clip, I don't really have anything to add. We'll see what Ford's energy business looks like in 2027. But I think that it was a very good question. And, you know, looking forward to seeing what they're actually able to pull off. And I love that automotive companies, because GM's got GM energy as well. I love that they're getting into this business.

[00:31:22] So good answer. Good question. Let's listen to the next question. Great. Thanks. And then just as my follow-up, you know, around the same time that Ford Energy was announced, you also broke news of the new strategic partnership with Renault. So I was just wondering if there might be any kind of update you can provide there, too, given that the first vehicles that were announced were electric vehicles. And I think that's an important, you know, piece of solving the puzzle in Europe.

[00:31:50] But I met with Hans-Jep during the quarter. He's super energized about, you know, Renault on the commercial vehicle side in Europe. What do you think the broader potential for collaboration there might be? Thank you, Brian, for your question. It's very pertinent. At this point, all we would say is that we believe that on the passenger car side, Renault has fully cost-competitive platforms.

[00:32:20] And we intend to take advantage of that as Europe continues to electrify amidst the Chinese competition on passenger cars. On commercial, we have a very successful relationship, as you know, with Volkswagen, both on the pickup and the van side. And, you know, we have nothing to announce today. But certainly, John, myself, and the whole team are very focused on taking advantage of the Renault relationship across all of our businesses.

[00:32:48] And, you know, our commercial business at this point is still very profitable in Europe. We see it as the core of our profitability in the future on the vehicle side. And so we will do everything we need to to maximize our scale and our cost advantage on commercial in Europe. I'm sure he meant to say that they would do everything they need to to maximize their sales and cost, whatever he said.

[00:33:18] And in the United States, too. But he said to Europe in a weird way. There was a long longer than I thought needed pause and Europe anyway. Yeah, the Renault partnership looks to be for, you know, small consumer cars and then for commercial. Sounds like they have more to announce in the near future on with their partnership with Volkswagen. So we'll keep an eye on that as well.

[00:33:48] I wonder because, you know, Rivian and Volkswagen have their partnership. I wonder if any of that, those software defined vehicles that Rivian and Volkswagen are working on, if any of that finds its way into what Ford's doing. Probably not, but it would be interesting if it did. All right, let's move on to our next question. And I'm pretty sure, yes, this next question had zero to do with EVs.

[00:34:16] But I feel like this gentleman answered it and asked it, excuse me, in such a way that it made everybody, including himself, feel uncomfortable. So I was like, you know what? That's entertaining. Let's throw it in there. Our next question will come from Colin Langan with Wells Fargo. Oh, great. Thanks for taking my questions. If I'm looking at slide 10, there's a $900 million of other. It's kind of unusual to have such a large item. Any color on what that is.

[00:34:45] And then also looking on that slide, cost is only $700 positive and includes the IEPA. I think the target is that you're supposed to get a billion of cost benefit for the year, which would mean underlying costs. It's actually worse year over year in Q1. So what is driving the weaker Q1 cost? Well, first off, let me just hit on your question on other. That's really related to services, both physical and software.

[00:35:14] So that's where that's showing up. So you had $900 million of software? Right. Well, we also had compliance benefits, services, physical and software credit as well. Okay. And then the cost piece, is that just the cost savings pick up in the second half of the year?

[00:35:43] This cost savings, if you're on slide 10, was related to the Q1 bridge going from $1.3 billion in Ford Pro to the $1.7? Yeah, well, I was just saying in the bridge, it's $700 million positive, but that includes $1.3 billion of IEPA. It does include the IEPA. And I thought you were a target for the year. That's right. So that would mean ex-IEPA, it was negative. So I'm just wondering why it's negative if the target for the year is a billion positive costs.

[00:36:12] You have Novalis in there as well. Okay. And then just lastly, if I go to slide 18 and I add up all the items, it does seem like it's a little short of some good news. It seems like I'm about $900 million short of all the items listed on that slide. What is that? Is that volume? You did mention regulatory savings, just other cost savings that were kind of missing in the walk.

[00:36:41] I would say, yeah, it's a variety of other savings throughout the company as well. So we thought that really it's – cost is fairly flat on a year-over-year basis. We're really presenting very close to what we presented in the past. The big changes as we've gone into this guide is we had the $1.3 billion resulting from the IEPA Supreme Court ruling. Then we had the increase in the commodities, which is offsetting.

[00:37:10] So when you look at all of that together, you're really looking at a pretty flat picture year-over-year because we already had a number of items that were offsetting. All right. I don't really necessarily have any – I don't really necessarily – I don't have anything to add to this other than I just loved how it seemed like no one was comfortable. And it just – it tickled me to no end. So let's go ahead and move into our final question.

[00:37:40] Your next question will come from Itai McEally with TD Cohen. Great. Thanks. Hi, everybody. Just a couple of questions on the UEV platform. I'm just curious sort of what's left to do here as you prepare for next year's launch. And maybe thinking even out to 2029 towards your break-even or profitability objective for Model E. How should we think about roughly the number of top hats that you're planning to launch on that platform?

[00:38:08] And maybe just lastly, if I can sneak it in. In the past, you've mentioned using some new suppliers for UEV. Any more updates you can share on how that's going? Thank you. So, Itai, this is Kumar. Answering your first question on the – let's say the industrial launch of the product, there are four major pieces to it. There's the hardware of key new parts like mega castings.

[00:38:37] You know, UEV has its own software platform. So development and testing of that platform. Excuse me. Third is the readiness of our suppliers with all the parts that are coming from suppliers. And lastly, number four is equipment installation at our plant. We're in the middle of all four of these right now. And all enablers and all indicators, early indicators of these four work streams are on track.

[00:39:06] So feel good about it. Your second piece of question, number of top hats. As we've mentioned, it is a platform. We plan to have high volume at Louisville. But I think it's – we don't want to give away our plan to competition by talking about how many top hats or which top hats. It would be too early to do that. Okay. Yeah, that's my whole launch.

[00:39:36] How about – The launch is bigger than the industrial launch. So we want to give you a little bit of insight into the demand creation because that's critical for us. Yeah, this is Andrew. We're confident on our launch plan. In fact, we're right on track to share our plans with dealers and take customer orders later this year.

[00:39:55] And what we're really excited about is some of the EV market trends that we're seeing and the EV volume really heading towards the affordable space, which really favors this affordable UEV platform positioning us right in the heart of the market. So we're really pleased with that. I think the market is already predisposed to this price point.

[00:40:20] But now it feels like in the U.S., the EV market is moving even closer to the UEV platform. Yes. And there's really not much choice on a fully spec'd, highly capable technological vehicle platform that's really affordable. You know, there's not a lot of choice for customers, a lot of compliance vehicles.

[00:40:45] But this is a real, legitimate, fully capable product for customers. So we think the market is really moving. And we understand that. That's why we're working so hard on the demand creation. I think UEV is on. As far as the new suppliers, do you want to mention anything about the new suppliers, Kamar?

[00:41:09] Yeah, I would say that the UEV team took a very interesting approach. We did the toughest and the most complex commodities. We designed them in-house. This gives us a lot of control over those commodities. And it gives us the ability to source those commodities at the highest quality and the best cost price points from new suppliers.

[00:41:36] And these new suppliers have been great partners. And we are working towards using that capability, both the process as well as the new supply base in the rest of our portfolio.

[00:41:50] What's exciting for me is to see the team's pollination of the UEV process, new suppliers, new way of developing a vehicle, new IT tools that the development team uses. It's really starting to spread across the company. And to me, that's very encouraging to see.

[00:42:14] Because the greatest gift for UEV will likely be what it gives all of our other models and our team as a whole. Okay, so I'm going to start with the last thing first. New way of doing things. New to Ford or a new way of doing things in manufacturing? Because they've already said that they're taking things from Chinese automotive manufacturers and they're putting that into Ford.

[00:42:41] Now, does that mean that Ford doesn't have its own flavor of something that's new? No, that doesn't mean that at all. They probably do. But it sounds like when they say a new way of doing things, I feel like they're leaving out the new way of doing things. But the Chinese have been doing it for a really long time. And we're improving on it. However, Ford improves on something that makes sense for them. So I just wanted to say that.

[00:43:06] Sounds like the EUV, the new electric platform that Ford has for their affordable pickup trucks is on track. Top hats would be like this platform can support a SUV and a pickup truck or whatever. It's probably not going to be a submarine, but whatever you built on top of the platform, that's what a top hat is referring to.

[00:43:32] He mentioned that Ford likes the way that the EV market trend is going, which is, you know, a lot of people are buying affordable used EVs because gas prices are super high right now. And I'm going to be honest, like gas prices are high. I bought tires, as I found out today, I paid $270, which was for four. So it's probably a little different. But I paid $270 a tire in April of 2025.

[00:43:59] And I just paid $323 for the most affordable tire that I could put on my car at Costco. Was it the most affordable tire I could have found anywhere? No, but still $323, $269, one year. There's a difference. Again, I didn't buy four. You usually get a discount if you buy four. Let's see.

[00:44:20] But yes, the trend is gas prices are high and people want to save money because everything, everything is increased in terms of price. I don't know, and maybe I might be wrong, but I'm not sure that there's anything that I buy now that I bought before the pandemic is more affordable than it was or even close to being as affordable as it was back then. So yeah, I think that's it.

[00:44:50] If you want to email me, you can do so. It's Bodie, B-O-D-I-E at 918digital.com. You can find me on X at 918digital. Although I'm not on there very much. I don't even know why I mentioned it other than habit. I'm also on LinkedIn. It's Bodie, B-O-D-I-E, Grim, G-R-I-M-M, if you want to connect on LinkedIn. And I'm much more active over there. And let's see here.

[00:45:18] If you want to support the show, you can go to supportkelewatt.com. None of the money from the Patreon or the Supercast goes into my own pocket. So none of the money that I get from supporters goes to do things like pay for new tire. All that money comes out of my regular two jobs that I have. All right. It is burning up in this car. So I'm going to bid you all adieu. Regular show hopefully on Tuesday.

[00:45:48] Regular show on Friday. And thank you everybody so much for hanging out and listening to this episode. And I will talk to you soon.

[00:45:57] This concludes the Ford Motor Company first quarter 2026 earnings conference call. Thank you for your participation. You may now disconnect.

[00:46:26] If you like the show, please take a moment to rate, review, and subscribe. It really does help the show to grow. Thank you for listening.