Ford Motor (F) Q3 2026 Earnings Call: Q&A Summary

Q: Rajat Gupta with JPMorgan asked how much of the 2027 offset stack is within management's control and how comfortable they are with the guide.

A: Sherry House stated that revenue optimization, software and parts growth, and structural cost savings are within their control. She noted that AI tools are helping match demand to capacity, and Jim Farley added that the company is entering 2027 with a strong position in the truck business.

Q: Rajat Gupta with JPMorgan asked about the status of the UEV and Fathom launch and what risks remain.

A: Kumar Galhotra explained that 90% of validation is complete and unit castings are being produced at rate, with supply base readiness being the primary remaining risk. Andrew Frick noted that the Fathom's $28,350 price point targets a massive addressable market as the EV market bifurcates.

Q: Emmanuel Rosner with Wolfe Research asked if Model e is expected to improve in 2027 and what the moving pieces are.

A: Sherry House explained that progress will not be linear and higher expenses are expected in 2027 as plants come into focus. She noted that the next step-function in profitability is expected in the first half of 2028 as the UEV and Ford Energy ramp up.

Q: Tom Narayan with RBC asked if the partnerships with Renault and Geely are enough to rightsize capacity in Europe given Chinese competition.

A: Jim Farley stated that Europe is different due to EV mandates and that the partnerships are low-capital investments that improve the profit outlook. He affirmed the company is committed to building a profitable European business.

Q: Joseph Spak with UBS asked for clarification on F-150 inventory recovery and if the company is targeting higher absolute levels.

A: Andrew Frick clarified that they are running at 49 days and expect to stay on the low end of the 55 to 60 day range. Jim Farley added that this is historically lower than past operations and allows for a disciplined business.

Q: James Picariello with BNP Paribas asked if the 150,000 unit recovery target is still intact or if it is lower.

A: Sherry House noted that the Novelis recovery is on plan, and because costs are coming in lower, volumes are proportionately lower, keeping the $1 billion net tailwind guidance intact.

Q: Andrew Percoco with Morgan Stanley asked for an update on Ford Energy contracting and the impact of Chinese exports globally.

A: Dave Carroll stated that Ford Energy is ahead of expectations with 80% of 2028 capacity contracted or in late-stage negotiations. Jim Farley noted that Ranger is performing well in LATAM and Southeast Asia, and Ford is the number one traditional OEM exporting from China.

Q: Jairam Nathan with Daiwa asked how the company plans to upsell the Fathom beyond the base price.

A: Jim Farley and Andrew Frick explained that while the base price is $28,350, the range goes into the high $30,000s. They highlighted that the digital suite, including the 48-volt system and advanced ADAS, provides a significant upsell opportunity through long-term subscriptions.

Q: Mark Delaney with Goldman Sachs asked what is driving the increase in U.S. industry pricing and for the outlook for 2027.

A: Andrew Frick noted that pricing is strong and expected to be up about 1% this year. Alicia Boler Davis added that Pro fleet demand is on target and Oakville capacity will allow for growth in truck rental sales.

Q: John Sieger with Evercore ISI asked what is needed to expand beyond 20 gigawatt hours and for the impact on earnings.

A: Dave Carroll stated the team is focused on the initial 20 gigawatt hours but is evaluating expansion scenarios. Sherry House noted that about 1/3 of the $2 billion investment is this year, with 2/3 next year.

Q: Dan Levy with Barclays asked for concrete examples of learnings from the Geely partnership and how they apply to Fathom profitability.

A: Kumar Galhotra noted they are learning about cost and speed, which is being institutionalized into the global product development system. Jim Farley added that Fathom's design includes simplified parts and in-house electronics to achieve competitive costs.