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Ford Motor : 2025 Annual Report 2026 Annual Shareholder Questions
Ford Motor : 2025 Annual Report 2026 Annual Shareholder
About this update from Ford Mtr Co Del
2026 Virtual Annual Meeting - Shareholder Questions Ford leaders addressed several topics, some representing multiple related questions from shareholders, during the Company's Virtual Annual Meeting of Shareholders on May 14, 2026. Ford also received shareholder questions on the topics listed below. All responses are provided as of May 14, 2026, unless otherwise noted, and will not be updated. Please note that the answers below may contain forward-looking statements about our expectations for future performance. Actual results may differ from those stated, and the most significant factors that could cause actual results to differ are included in the Cautionary Note on Forward-Looking Statements found beginning on page 5. External Environment Q: What impact will the tariffs have in the long run? Does management expect costs associated with the increase in import tariffs, particularly for cross-border automotive parts, to ease in coming years? A. Ford supports the administration's goal of strengthening the U.S. economy by growing American manufacturing, and we support a level playing field globally for domestic and foreign OEMs. We also appreciate the ongoing cooperation we have with this administration. As America's largest auto manufacturer, our engagement with Washington helps U.S. policymakers better understand how proposed policy changes would impact our industry and the communities we serve. As disclosed with Q1 earnings, we expect tariffs to have an adverse impact of about $1 billion in 2026, excluding the temporary tariffs related to Novelis. That figure is built into our forward planning and was included in our Q1 guidance - and we are managing it as a permanent cost reality, not a temporary condition. In Q1, we also recognized a one-time $1.3 billion IEEPA-related benefit from the Supreme Court's tariff ruling in February. We remain confident in our structural position. Ford has built vehicles in the U.S. for more than 120 years. It's a choice we have made, time and time again. We know firsthand the broader impact of keeping those jobs here - far beyond the factory floor. That's why Ford again led every other automaker in U.S. vehicle assembly, U.S. vehicle exports and hourly autoworker employment in America in 2025. Ford is well-positioned to navigate these challenges and emerge as a winner because we have invested in American innovation and manufacturing since our founding. We have a strong balance sheet and liquidity that provide us with the flexibility to invest in profitable growth while managing current industry dynamics. Q: What is the impact of the war in the middle east? A. First, our focus is on our team members in the region and doing everything we can to support them. On supply chain and business disruptions, we have deep expertise managing uncertainty - pandemic, tariff headwinds, chip shortages - and a well-developed playbook for situations like these. Our team is resilient, and to date our customers have been resilient as well. We also have a strong balance sheet with $43B in liquidity, as of March 31, 2026, giving us the flexibility to absorb near-term disruptions. The impact of higher fuel prices depends on various factors such as the vehicle, the use case, miles driven, and household income. Our portfolio today is meaningfully different than in prior oil shocks - better average fuel economy, a lighter aluminum-bodied F-Series, and a broader lineup of hybrids and plug-in hybrids, including the F-150 Hybrid. For commercial customers, a truck is a non-discretionary purchase - it's how they do their job. We're mindful that consumers are managing real cost pressures, and we take that seriously. Our focus is on giving customers more choice across powertrains and doing what we can - through product, pricing discipline, and flexible financing - to keep Ford vehicles affordable and accessible. Outside the U.S., some of our global markets face larger and more immediate headwinds - we are closely watching fuel shortages and customer reactions in Australia, ASEAN, and Europe. Q: Are you still having trouble making enough trucks for the market because of the fire at your aluminum supplier? A. In late 2025, we encountered a supply disruption at Novelis due to multiple fires in a mill, which supplies aluminum for our vehicles. The recovery is progressing as expected although it is a complex process. We have dozens of people on the ground partnering with Novelis on the restart of the equipment. We have secured alternative supply in the event this takes longer than expected. We've taken structural measures - including adding a third shift to our Dearborn Truck Plant and increased line speed at our Kentucky Truck Plant in order to produce more vehicles this year. And despite the disruption, F-Series posted nearly 160,000 U.S. sales in Q1 2026, maintaining its position as America's best-selling truck. In fact, for the first quarter, F-150 had the highest retail share, highest average transaction price, and the lowest incentive spend per unit versus our key competition. Our team is effectively managing tight retail days supply by helping dealers fill inventory gaps while ensuring high-demand trim levels are in ample supply. We are also producing a richer mix of product as Novelis continues to ramp up. And importantly, on average, we are spending less on incentives than our competitors. Products Q: Can you start making vehicles easier to repair? Even changing a headlight is a very involved process. A. At Ford, we hear this feedback clearly and are actively transforming vehicle serviceability into an upfront engineering priority. From a mechanical standpoint, we are now using advanced digital simulations at the very start of vehicle design to test and simplify everyday maintenance tasks - such as replacing headlights, filters, and sensors - long before physical parts are built. Our future vehicles will benefit from this positive change. Q: Can you get some sportier colors for the Explorer ST-Line and ST models? Velocity blue would be nice. A. Since 2020, we've taken several steps to keep the latest generation of the Explorer fresh and desirable. And since launching the latest version of the Explorer in 2025, we've added a variety of new colors to the product including Marsh Gray and Space White Metallic. In addition to these, both the sporty Vapor Blue and Rapid Red metallic color options are available on both the ST and ST-Line. As is always the case, we will continue to listen to customer feedback as we develop future model years and future color choices. Q: Will Ford consider hydrogen fuel cells powered vehicles? There is no question about the potential of fuel cell technology. As renewable energy grows, hydrogen will play an important role in the future. For widespread market deployment, however, battery electric propulsion is currently in a superior position - not least because of cost and available infrastructure. Our short- and mid-term work is focused on electrification; however, Ford will continue to pursue fuel cell development as an integral part of our overall powertrain strategy. Markets Q: India is among the largest car markets in the world. What is your stance on re-entering back to India? While India is a regional powertrain manufacturing hub, we have no current plans to re-enter the vehicle market there. Our commitment remains delivering outstanding customer experience to our existing Ford customers across India with service, parts, and warranty support. Quality Q: What is Ford doing to fix its quality, especially as it relates to recalls and warranty charges? We are making meaningful and measurable progress improving vehicle quality that has become clear over the last 12 months. This year both our launch quality and three-months-in-service quality improved significantly . 2025 initial quality was among Ford's best ever. This is echoed by publications and analysts seeing similar results: Ford was the most awarded brand in the J.D. Power 2025 U.S. Initial Quality Study, with four Ford vehicles topping their segments. Consumer Reports 2026 New Vehicle Reliability ratings showed the Ford brand improved significantly to No. 11 - our best showing in fifteen years. Consumer Reports 10 Top Picks of 2026 - Ford Maverick and F-150 both made the list We aren't resting on these achievements. As we said during Q1 2026 earnings, we are on track to deliver another $1 billion in material and warranty cost improvements this year. We have also more than doubled our team of safety and technical experts and significantly increased testing to failure on critical systems in current Ford vehicles such as powertrains, steering and braking. Insights from this testing are being incorporated into current production. We are making progress on software quality, using an enhanced software validation process to help ensure the right software is present on vehicles and using over-the-air updates to address potential warranty issues before they become customer issues. Some of the most meaningful actions include additional testing (beyond what we used to do), rigorous process discipline and new technical expertise. We remain focused on improving quality for our customers in every vehicle we assemble. Cautionary Note on Forward-Looking Statements Statements included or incorporated by reference herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by our management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation: Ford's long-term success depends on delivering the Ford+ plan, including improving cost competitiveness; Ford's products have been and could continue to be affected by defects that result in recall campaigns, increased warranty costs, or delays in new model launches, and the time it takes to improve the quality of our products and services and reduce the costs associated therewith could continue to have an adverse effect on our business; Ford is highly dependent on its suppliers to deliver components in accordance with Ford's production schedule and specifications, and a shortage of or inability to timely acquire key components or raw materials has previously disrupted and may, in the future, disrupt Ford's operations; Ford's production, as well as Ford's suppliers' production, and/or the ability to deliver products to consumers could be disrupted by labor issues, public health issues, natural or man-made disasters, adverse effects of climate change, financial distress, production difficulties, capacity limitations, or other factors; Ford may not realize the anticipated benefits of existing or pending strategic alliances, joint ventures, acquisitions, divestitures, commercial relationships, or business strategies or the benefits may take longer than expected to materialize; Ford may not realize the anticipated benefits of restructuring actions and such actions may cause Ford to incur significant charges, disrupt our operations, or harm our reputation; Failure to develop and deploy secure digital services that appeal to customers, retain existing subscribers, and grow our subscription rates could have a negative impact on Ford's business; Ford's ability to maintain a competitive cost structure could be affected by labor or other constraints; Ford's ability to attract, develop, grow, support, and reward talent is critical to its success and competitiveness; Operational information systems, security systems, products, and services could be affected by cybersecurity incidents, ransomware attacks, and other disruptions and impact Ford, Ford Credit, their suppliers, and dealers; To facilitate access to the raw materials and other components necessary for the manufacture of electrified products, Ford has entered into and may, in the future, enter into multi-year commitments to raw material and other suppliers that subject Ford to risks associated with lower future demand for such items as well as costs that fluctuate and are difficult to accurately forecast; With a global footprint and supply chain, Ford's results and operations have been and could continue to be adversely affected by economic or geopolitical developments, including protectionist trade policies such as tariffs, or other events; Ford's new and existing products and digital, software, and physical services are subject to market acceptance and face significant competition from existing and new entrants in the automotive and digital and software services industries, and Ford's reputation may be harmed based on positions it takes or if it is unable to achieve the initiatives it has announced; Ford may face increased price competition for its products and services, including pricing pressure resulting from industry excess capacity, currency fluctuations, competitive actions, legal and policy changes, or economic or other factors, particularly for electrified vehicles; Inflationary pressure and fluctuations in commodity and energy prices, foreign currency exchange rates, interest rates, and market value of Ford or Ford Credit's investments, including marketable securities, can have a significant effect on results; Ford's results are dependent on sales of larger, more profitable vehicles, particularly in the United States; Industry sales volume can be volatile and could decline if there is a financial crisis, recession, public health emergency, or significant geopolitical event; The impact of government incentives on Ford's business has been and could continue to be significant, and Ford's receipt of government incentives could be subject to reduction, termination, or clawback; Ford and Ford Credit's access to debt, securitization, or derivative markets around the world at competitive rates or in sufficient amounts could be affected by credit rating downgrades, market volatility, market disruption, regulatory requirements, asset portfolios, or other factors; Ford Credit could experience higher-than-expected credit losses, lower-than-anticipated residual values, or higher-than-expected return volumes for leased vehicles; Economic and demographic experience for pension and OPEB plans (e.g., discount rates or investment returns) could be worse than Ford has assumed; Pension and other postretirement liabilities could adversely affect Ford's liquidity and financial condition; Ford and Ford Credit have experienced and could continue to experience unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, services, perceived environmental impacts, or otherwise; Ford may need to substantially modify its product plans and facilities to respond to shifting consumer sentiment and competitive dynamics as a result of policy changes affecting, or otherwise to comply with safety, emissions, fuel economy, autonomous driving technology, environmental, and other regulations; Ford and Ford Credit could be affected by the continued development of more stringent privacy, data use, data protection, data access, and artificial intelligence laws and regulations as well as consumers' heightened expectations to safeguard their personal information; and Ford Credit could be subject to new or increased credit regulations, consumer protection regulations, or other regulations. We cannot be certain that any expectation, forecast, or assumption made in preparing forward looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake, and expressly disclaim to the extent permitted by law, any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events, or otherwise. For additional discussion, see "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.