Ford Motor Company (F) Earnings Call Transcript & Summary

Okay. Good morning, everybody. I'm Adam Jonas. I head up Morgan Stanley's auto and shared mobility team and moving into a new role, focused on robotics and physical AI, but I do have the distinct pleasure of hosting companies in the Auto industry at our 13th Annual Laguna Industrial Autos Conference. I'm delighted to have representing Ford Motor Company, Navin Kumar, Chief Financial Officer of Ford Pro; and Michael Aragon, President of Integrated Services. And we're going to have a fun discussion about how Ford is transforming into just a seller of unconnected vehicles and more of a curator and fleet operator and service provider for integrated software-defined, software-enabled and delivered services and recurring revenue. That's a pretty big change. So we're really delighted to have you here at this awesome time, historic time.

Mike, maybe just to start with you. You joined the company in -- was it March?

Yes, March. Yes.

You had a 25 years of experience outside of Ford in a variety of tech and digital strategy roles, most recently with Lululemon Athletica and you ran their Athletic division and MIRROR. It's a pretty cool. We'll ask some fitness questions a little bit later. But what specific aspect of Ford Pro ecosystem or any other parts of the Ford business that you're in contact with as you keep integrating. What aspect of the business presented the biggest challenge or would you say the biggest challenge and of course, at the same time, opportunity from your perspective to transform the company?

Yes. Well, I appreciate the context on my background. As you mentioned, I've been at this intersection of hardware, software and services for the entirety of my career. And one of the things that I've learned that was very consistent is, if you build great services and platforms that there always were these really positive benefits in other parts of your ecosystem. And so just when I was early PlayStation Network, when we saw people play video games, when they chatted, when they watched videos, LTV was higher. I spent a few years at a company that was a very important part of the Amazon ecosystem. It was Twitch, but we were a feeder for the Prime ecosystem same behavior there. And so for me, what I was really interested in is, integrated services as a stand-alone, we're profitable, we're growing. So that's great. But for me, the real unlock was figuring could we drive similar behaviors, benefits across the ecosystem using software as an engagement and loyalty engine. And so one number that stood out really early as we were having our early conversations. And when you look at the average Pro customer, their post-vehicle purchase attach rate for parts is about 35%, but when they use physical parts...

Physical parts.

Physical parts, but when they use our services, their active subscribers, that percentage jumps up by 20 percentage points. And then on top of that, they're spending more. So we had an early indicator that there's this behavior where good service, good digital engagement can lead to those positive things. And so I'm excited that my job is to come in and try to put more gas on that, figure out what other features will add to that flywheel because I think -- what's exciting to me and what I -- the reason why I joined was, I believe I can build a very profitable business for Ford. That's great. But the real value is if I can drive parts and service, which are much bigger than where we are today and also very profitable, that really is the unlock for Ford.

Just like one of the secrets -- again, having 3 decades looking at autos and you don't break out the profitability, but the parts and service business, round numbers, maybe Lynn, tell me if I'm wrong here, high level, but it tends to be around 5% or 10% of revenues, but a much higher percentage of profitability, the margins on the parts. And that's even selling into the layers and layers of distribution channels and in the retail channel.

Adam, the only thing I'd add to that is in our second quarter in Ford Pro, we do release an aftermarket percentage of our total profitability. And that was for the last 12 months, 17%. So you probably remember our Capital Markets Day when we said it was around 13%, and we have a longer-term target of 20%. So we are on that progression.

Well, what's nice is that you're recognizing kind of one of the -- and I'm not just singling out Board, the auto industry, when you had unconnected vehicles, you sell the car and it's like see you later. And especially if it was a cash purchaser or a loan from a bank somewhere else, that you didn't really have that relationship other than the financial relationship. But to have a kind of it be more part of, all right, what's the need of our customers, how are you -- particularly on Ford Pro, where there's just thousands and millions of different use cases and nuances. No one will know that customer better than you, assuming that you have the data and the relationship. So this is great. The idea of healthy tension and leadership is powerful. I call it productive anxiety, healthy tension. It depends -- but my definition, it depends who you talk to at Morgan Stanley. But could you share an example -- both of you, Mike and Navin. How the team has approached strategic choices from different angles and how you help build consensus around the decisions that you're making in terms of Integrated Services and the strategy?

Yes. So when I -- if I just put my Integrated Services hat on, obviously, my job is to drive high-margin software that we sell. But one of the early dilemmas that came up is how do we deal with multi-make vehicles. So Ford -- a lot of our large Ford fleet customers have Ford vehicles, but they also have other OEMs. So how do we deal with that? So if you just put your sort of siloed hat on the Integrated Services, it's -- we got to protect that. We would -- you wouldn't have multi-make. But if you believe that we should take a little bit of a hit on our margin just to service our customers with other vehicles through telematics but we're driving that higher service and sales ratio that, that's a trade-off we would make every day of the week because that's really what an enterprise thinking mindset should be. And that's, I think, something that Navin and I both share.

Yes, absolutely a few things I think. In Mike, we have a really great partner on those software-related metrics like usage, adoption, lifetime value, customer acquisition cost, margins. But then Mike is such a great partner because we can take that and also frame it from a bigger ecosystem standpoint, where we have dials across vehicles, software, service, financing, and it helps deliver a greater ambition and more value to the customers and to the bottom line. And my role, Adam, actually -- I'm the Chief Financial Officer of Ford Pro and Integrated Services. So I actually sit at the intersection of both, which really creates a natural bridge. Like Mike brings a really deep customer-first mindset from his leadership experiences in technology and digital media. And then I bring the context on the commercial industry, the Ford Pro strategy and go-to-market and just how to execute for these customers who are really embracing our productivity solutions. So it's a really good partnership.

I mean it's important that you're -- since you're writing the checks and you're cash in the check, that relationship is tight and customer-driven. How has -- Navin, for you, in terms of Ford Pro Intelligence, maybe review some of the latest trends in terms of how usership has changed over time? Where is growth coming from in terms of key customer cohorts? Is it from large customers or kind of versus your smaller, more mom-and-pop? And what would you say is the next biggest opportunity you're most excited about?

Yes, Adam, I'd say the diversification of the customer base for Ford Pro Intelligence has been a key driver of growth. We are seeing strong adoption with small and medium businesses that are driving the economy. Just one metric, our telematics dashboards and our fleet management software subscriptions, that's nearly doubled versus last year. And we are also starting to see adoption with larger enterprises. And then overall, with Ford Pro, customer diversification is just such a key competitive advantage. We serve all fleet sizes, all locations and end markets. And that provides us stability and the ability to flex the product offerings into end markets that are growing like the trades or end markets where there's long-term structural investment opportunities like data center infrastructure for AI. And so it provides really good optionality. And then on sustaining that growth and pace, in my view, there are really 4 key opportunities, and we're making great progress in all of them. And so the first, it really does start with the product and continuing to enhance the product to drive value and benefits for the customers and giving them time back. And a few examples is adding more service facilitation features into our software offering, as Mike was mentioning earlier, to drive that flywheel and more proprietary in-vehicle control features, which is a key differentiator that third-party software companies can't provide. What we have in market today, it's limiters like speed limiting and also just general solutions so that we can inhibit vehicles from operating outside of a customer's work to be done. So it drives real uptime for those vehicles for those customers. Second opportunity is bundling. Actually, Adam, you and I talked about this last year. We were early in our journey of bundling our software solutions together and bundling drives a better customer experience. It also allows you to leverage the data from the telematics into the fleet management software to operate the fleets more efficiently. And this year, the high majority of our fleet management software subscriptions are being bundled with our telematics dashboards. So we're making really good progress there. The third point is multi-make, like Mike mentioned, and really ensuring that our solutions can be used by a customer for their full fleet. It drives a good customer experience. They don't have to go use multiple different solutions. It opens up addressable markets. It drives stickiness and loyalty. And then over time, we have the opportunity to conquest if those vehicles are up for renewal and refresh. And then the fourth point, which is really important is, it's partnerships to enhance the offering. The next stage of growth really does involve partnering with market leaders to enhance the offering. And a perfect example of this is our partnership with Geotab, which has been growing and expanding. So we provide telematics data services in partnership with Geotab to large corporate enterprises and Geotab provides us plug-in devices so that we can serve those small and medium businesses that have multi-make fleets, including non-Ford vehicles. So to summarize, it really is product. It is bundling, multi-make and partnerships. And when we bring that all together, that's going to sustain the growth we see in Ford Pro Intelligence. It's going to open up more addressable market, and it will really drive customer diversification.

Okay. So as you get a greater adoption and greater density of connected customers and you get more data and you learn more about how the tools, both software and hardware, help your clients -- help your customers get better outcomes. How do you anticipate or how do you already see it changing the physical requirements of what Ford touches in terms of fleet management and maintenance? How -- is there -- just drilling into your question -- as that expands, I'm wondering if you're running into, hey, it would be great if we had more staging or mega fleet management or hygiene or working -- or systems to work with your dealer partners and the upfitters differently than you have historically. Is that unreasonable?

That is a reasonable premise. I think just to give a few examples, with upfitters because you mentioned upfitters, we have new certification standards to really kind of drive efficiencies with upfitters so that customers have more transparency on when those vehicles are coming and where they are in that upfit chain. And that leverages data off the vehicles, just like on the service side. And on the service side, this year, we've improved repair order duration for Ford Pro vehicles by nearly 20%, and that's due to faster and more efficient repairs. But Adam, the input metrics of that are so important because it's a combination of connected vehicles, software and proactive uptime monitoring solutions and the data underpinning that, bringing that all together so that when a service event occurs, Ford and our dealer partners can be much more quicker and efficient with that service, keeping these vehicles running.

And how satisfied are you with how your dealer partners are keeping up with you? I'm sure there's a distribution curve. Some might be moving at a different pace than others. But overall, is this -- you see any changes in the dealer relations? Or is it not a limiting factor at this point?

Overall, it's very positive. Our dealers are all in on Ford Pro. They're actually with us accelerating investments in physical service and mobile service. And additionally, our dealers are actually generating the majority of the leads for our software solutions that we provide to small and medium businesses. They have been serving these customers with a local footprint for a long time. And so it's just a really, really tight partnership.

Great. Mike, Ford has spoken about the flywheel of value creation. I would be interested in hearing any specific choices that you're making to accelerate that flywheel and grow Ford's share of garage, not just within Ford Pro, but your responsibilities also include Blue and e as well.

Yes. I would say there's 3 levers that we're looking at and pulling. One is we have to solve our customers' problems, not Ford problems. And so that -- going back to that multi-make example, I think, is a good example of, we will trade some margin on my side to solve if we're solving a customer problem, knowing that it's going to drive the flywheel of engagement and loyalty down the road. The second part of it is we want to solve problems before they happen. And so we spend a lot of time thinking about fleet safety, driver safety, in vehicle controls because we want to prevent accidents and help the fleets be more -- help them be safer. The other part is, we want to turn that check engine light into preventative maintenance, which is much cheaper. It's planned versus something that's disastrous, happens on the highway, you lose -- it's not only more expensive, but it's also you lose that -- potentially you'd lose the job. And so we spent a lot of time trying to drive those types of efficiencies for our customers. And then the last one is just keep it simple. In our push to get product out to market, which is a good thing normally, an example I have is we've got 3 different user interfaces for telematics, data services and other software platforms. And so what we're doing is consolidating all that to make it easier. It's one of those concepts that I have where it's like it's a paper cut, it's annoying. It's -- but if you add all these paper cuts up, really detracts from the customer experience. So that's an example of keeping it simple. The other example that we just talked about is bundles. Right now, we have so many different products on the consumer side. We've got to make it -- got to keep it simple. I just got back from the Dealer Summit that we have in Vegas. It's -- what is it, 5,000 of our dealers in Vegas for our annual event. And that's a theme. It's like there's just so many positive things that we can sell, but it's just so much how we bring it, make the messaging simpler and just reduce cognitive load for our customers because there's so much that we're throwing at them in terms of options.

Mike, who do you benchmark on these kinds of things? Who does it well, either within the auto industry or in other physical industries that you either from your direct experience or even observing and benchmarking externally?

Yes. I think Tesla does it pretty well. I think a lot of the other vehicle manufacturers, I think that's kind of a similar, here's the different options and here's the checkmarks of what you get and you don't get. I think we want to take a little bit of a different look, maybe like a good, better, best option and not really think about it in terms of silos of like you get this thing -- you get like this secure feature for this, you get BlueCruise for this other one. I do think of it more in terms of the Amazon model, which is there's just maybe high-end features that you might want to put in the ultimate tier. And then as things get commoditized, which they will in the ADAS space, maybe it moves down into the middle tier or the lower tier. So I try to think about it in terms of just value for the customers, which is different than what anybody else thinking.

Yes. I imagine trying to buy an iPad or something and they give you just a few strata that you do. You don't want to mix and match too many things, and you'll get the efficiencies out of it. To both of you, at the end of the second quarter, Ford Pro had over 750,000 paid subscribers. You've also previously shared data like miles and hours driven with BlueCruise, your in-house advanced ADAS solution. What other internal metrics are you using to measure success and KPIs and -- that you can share with us today?

So we run integrated services like a software platform like we should. And so I'd say there's 4 categories that we look at. One is just adoption. So are customers signing up for your services? So, one early indicator that I feel really good about is that for BlueCruise and Connected Services, so we haven't talked a lot about on the Blue side, but this is a good blue example. Our take rates from dealers and customers is almost double from when I started. So in the 5 months I've been here, we're seeing just a much higher take rate on those services at the order level. And so to me, that's an early indicator that, okay, the installed base is starting to grow, people are starting to become interested. Then the second part of it is really activation. So once they have the hardware, are they -- are you bringing them along on the journey. And I think one of the important metrics that I like to look at is just active engaged users. And so we've got 12 million FordPass customers or monthly active users. That's important because it's a way for us to communicate to our customers at scale. That's how we sell them BlueCruise if they didn't sign up for it at the dealer side. It's our way to engage with them on a daily basis. Sometimes it's just unlocking or locking your doors remotely, but there's other ways that we engage with them through having the diagnostics on that. So that's an important metric. And then engagement, as you mentioned, we've got 435 million BlueCruise miles, that growth of engagement is happening across both Connected Services on the Blue side as well as on the Pro side. So that continues to get better. And then the final piece is just valuation and value. You know this, but LTV is an important metric. And you mentioned this earlier, but we are a 120-year company that's really been a transaction-based company. You sell the vehicle and then hopefully they'll come back in a few years. Now it's more of a daily based engagement. And so I like LTV because it gives me a way to help educate the company on -- churn is a very important variable within that calculation. And so churn becomes almost as an important conversation that we have at the acquisition side. And so we look at that internally. And then one other metric that I think is very important for us is 3-year gross profit across hardware, software and services. And the reason why that's important is because I do believe the bigger unlock for us is not just running a profitable Integrated Services business, but it's driving those other parts of the flywheel. And so I'm looking to see what things am I doing that has an attributable measurable impact on those other parts of the business?

Adam, I agree with everything Mike said. Additionally, in Ford Pro, working with Integrated Services, we're doing much more robust pipeline management. So leading indicators like new logos where companies that can be adopting our solutions as well as with existing companies really digging into that installed base, what's Ford versus non-Ford, when vehicles are getting refreshed and when we can drive more adoption and utilization in that existing customer base plus that new customer base. So all your typical kind of CRM database management and analytics, but it's a lot more leading indicators for a business where it typically has been historically more transactional on vehicle sales, and this is more lifelong partnership engagement and management. So it's just really exciting to work with Mike and the team on delivering that type of apparatus to help grow the Ford Pro business.

On BlueCruise, what data have you disclosed, remind us, you mentioned 450,000 miles?

435 million miles.

435 million miles. How many vehicles and take rate or any other data behind the 435 million miles?

I'm not sure if we've disclosed all those specifics, but what I can say is that the adoption is growing, and there's a few ways we go to market. There's customers directly procuring the solutions. There is the dealers ordering. And the dealers ordering actually in the retail space, Adam, is such a key leading metric because we're seeing that increase significantly this year. So that means the dealers are getting comfortable with these solutions, educating the customers of the solutions and they're getting more interest from customers in these solutions. And so -- and then in my view, I had a background working in autonomy. And while the L2 and L3 and L4 technology stacks are different, getting more adoption in L2 and L2+ solutions gets customers more comfortable with higher-performing ADAS and autonomy, and that really sets the stage for L3 and L4. So we feel like we're in a pretty good progression.

So Tesla has the hardware standard in all the vehicles...

Yes, yes.

Or pay upfront. Chinese vehicles, at least the more of the leading edge, the bleeding edge of Xiaomi, BYD, et cetera, they put in a standard equipment and then also included in the price of the vehicle increasingly. When -- is Ford at a point -- are we soon at a point where you could be like, look, every car is going to have the hardware. We're just going to put it in because this vehicle has to be on the road for 10 or 15 years and you won't -- people won't want this to be like it will affect the residual value, and we don't want to retrofit it. So we are at a point now where like a substantial majority, if not entirety of your Ford vehicles can have the hardware just in there, collecting data, training and creating more service area with the AI and the robotics and then with a look to flipping that switch?

For BlueCruise specifically, not quite there because the reason is we have a different customer base, Chinese customers. We have a lot of folks like my parents who -- they think they like all the technology and then end up not using any of it. And so -- and there's just also a trust factor. So we've got to continue to build trust across the board. I think every manufacturer has this challenge. So there's an adoption curve. And so what we want to do because it does cost money is, really keep it standardized at certain trims, keep it optional maybe in the middle trims and then on the lower trims, it's like these are cost vehicles. These are more of an economic play because we really want to be where our customers are right now. And I think -- I like that you're bringing into the Chinese elements. We've thought about this quite extensively. It's just such a different use case, it's a younger cohort, many -- most of it's a younger cohort. They are digital natives. So it's a much different way of selling in China versus here with the Ford customer, yes, we do have digital natives, but we also got a lot of older folks who are kind of like, hey, introduce this to me at a little bit of a slower rate. So we want to make sure we're respectful of where our customers are at.

The only thing I'd add to that is I think with fleet customers, we're starting to build some trust and engagement with BlueCruise. Certain use cases like salespeople and sales fleets that's starting to happen. But in fleet, and we saw this in electrification too, it just takes time to integrate the technology into a fleet operation, ensure fleet uptime is robust and gain trust with these solutions. So everything that Mike said really also applies to fleet. But as we're scaling BlueCruise and getting that adoption, we're starting to see fleet interest grow.

Yes. Navin, how has Ford Pro intelligence platform started to address needs outside of, let's say, the kind of core transportation and logistics market. How do we see potential for the platform to play more broadly into commercial productivity space outside the vehicle?

Yes, that's a great question because we really started with the vehicle because that is our unique foundational competitive advantage. And now we have been pairing software and services. So we're starting to see more overall business productivity being delivered. And it always was our aspiration, Adam, to grow and scale a core operating system for business productivity and uptime. So on the vehicle side, we mentioned a couple of examples on service, mobile service is a perfect example because when you combine our digital solutions and our mobile service, we're starting to save customers hours and hours of time, which then they reinvest in their business to grow their businesses, generate revenue and more productivity. Some of those in-vehicle software solutions like driver coaching and those proprietary in-vehicle controls. The driver coaching, it reduces safety incidents, collision incidents, optimizes insurance costs, but it's also just freeing up time for more technician productivity. And then on the control side, ultimately, that just ladders up to these vehicles are being utilized to get the job done. So Adam, you mentioned autonomy. One of the killers in an autonomy model is dead miles, right, when the vehicle is rolling and revenue is not being generated. That's exactly the same thing that happens in a commercial fleet. You want those vehicles to be operating and rolling with jobs to be done. So our solutions bring that all together, and you could drive real robust business productivity of that. And like we mentioned on partnerships, we are also partnering to drive differentiation and specialization. A couple of days ago, we announced a partnership with ServiceTitan, who provides market-leading software in the trade space. So we're actually integrating our telematics data into ServiceTitan's workflows, and they have an application called Fleet Pro. So now their customers will benefit from real-time fleet tracking and monitoring and vehicle health alerts of our telematics data. But furthermore, they're actually going to take that data, Adam and then combine it with their own data to track technician productivity, including flagging any discrepancies between the text time sheet and the GPS data off the vehicle, which is more accurate. So what that does is, it helps customers be more productive with their text and ensure that these fleets are actually being used in the jobs to be done and not like side jobs that are independent, and that does happen in that industry. So it really just drives business productivity and uptime. So what we're seeing is we started with the vehicle. We're pairing it with software and services. And now we're becoming more of a kind of central hub for driving business productivity overall with our customers.

We have time for questions from the audience, calling for air. We have a mic in the back. Don't be shy. I will come back to you one more time. Farley talks about Ford's role in helping to serve the essential economy in the United States earlier this year. And I'd be curious for your views on how does the integrated client focus, recurring always-on consumer relationship you're building at Ford Pro, how does it empower the business that forms the backbone of our economy? How does it integrate there and create a durable competitive advantage for Ford. It's something he kind of -- he's been banging on about that for a long time, irrespective of the -- who's holding office.

Absolutely. And I could take this one to start, but that mission is really the heart of what we do in Ford Pro, empowering small and medium businesses in the trades that are an essential and growing backbone of the economy. Like we mentioned earlier, for a commercial customer, time is money. And when vehicles are not running, they're not generating revenue, they're not generating productivity. So our North Star in Ford Pro really is uptime and that relentless focus on vehicle uptime. But when we pair vehicles with software and services, we're starting to get into more of a lifelong partnership with our commercial customers and clients and helping them simplify their operations and really generate -- actually get time back to invest for growing their businesses. So in terms of durable advantages, there's a few key areas. The first is, Adam, we've been saying often we have a one-stop shop vehicle software services, financing solutions. The nuance is, we also provide tailoring and flexibility on that one-stop shop. So whether a customer wants an ICE vehicle, hybrid or BEV, whether a customer wants a specialized upfit with a certified partner network, we mentioned that earlier, or they want software solutions for multi-made fleets, we got them covered. The second is our market leadership. We are the market leader in commercial vehicles, and we have the most expansive distribution and service network of any brand. So when we augment that with these services and digital solutions, that just drives more durable advantage because we're building on a great foundation. The third piece is the dealers, as we mentioned earlier. They're all on this, right? They're accelerating their investments. They're generating business for us. They're organizing their commercial operations differently. So we just have really great partners in our dealers that are local, meet customers where they work. And they themselves are an essential part of the economy, right, this essential economy. So it's really a virtuous cycle. And then the last point is we do 80% of our manufacturing in the U.S., and we employ the most UAW workers. And so we are so invested ourselves in making this essential economy successful. And when we work with customers, we're trying to drive employee productivity and working with these customers and clients to grow our mutual businesses together, we're making good progress, but we see so much more opportunity Adam. And like you said, Jim talks about this a fair amount, and there is actually an event at the end of September called the Ford Pro Accelerate. And so you'll hear more from Jim and other leaders in the industry about what we're doing regarding the essential economy.

Yes. Michael, anything to add there on...

No, it's just -- having grown up in New Mexico and knowing how this is important. I come from a family of essential workers. I love Jim's ethos, and so we're doing everything we can on our side to push that as well, so...

Just so much -- from my lens, there seems to be a correlation between EV adoption and software-defined vehicles and then those -- software-defined electric vehicles, there are some exceptions being the sockets for autonomy and other services. Am I wrong in thinking that like that there's -- I realize the pendulum has kind of moved the other way and that EV sales have kind of stalled around 8%, 9% or so, and there's been a pull forward and there will probably be retrenchment hangover in the fourth quarter and the next year. Next year could be a pretty dreadful year for EVs in this country. But I'm just curious, Michael, from your perspective, you don't seem like [indiscernible] your background, it would be anything but that. But is there some kind of hidden cost or trade-off if we stall -- if we were to have an outcome where like China keeps electrifying and going to software-defined electrified and Europe kind of grinds up. In the U.S. were you hypothetically stay at sub-10% EVs for the next 5 years, while the rest of the world went up. How does that not put the U.S. and Ford in a potential disadvantage of just -- of that kind of setting the overall stocking horse pace for the adoptions of these services -- Integrated Services that you're trying to build? Would you see that as related? Or are you going to -- is your view of it really doesn't matter. We're powertrain agnostic. We can -- we're totally unencumbered no matter what the powertrain and electrical architecture is -- sorry if it's a leading question...

No, no, no. Yes, look, our software touches ICE to BEV to all kinds of vehicles. So for me, I'm looking at installed base and our recent architecture change to FnB3 helps us just get to a much faster and much bigger installed base, which is the key to anything that you're trying to build. So I feel like we're in great shape given our diverse lineup of vehicles. I think if you're asking about how are we thinking about EVs, I do feel like we're still investing in them. I think Jim just announced recently the new EV platform. And so we're still excited about that. But here in the U.S., it's so different, and it's hard to compare to other regions because everything -- the auto industry, as you know, has become regionalized really. And so for us, we think we have some pretty good strategic bets continuing to push the ICE vehicles, but also this new factory in Kentucky is going to help us stay ahead of the game and drive lower-cost EV vehicles. So I feel like our diversity of lineup is a good bet for us.

Yes, Adam, the only thing I'd add to that is we've always, when it came to EVs, had kind of like a plan for flexibility in the Pro space. We produce the E-Transit on the same line. We produce the transit in North America, and we're in North American and Europe operation. And our Europe operation is actually performing pretty well this year in terms of volume and share. And that's the strength of our product lineup, including the one-ton transit in Europe that has an EV and plug-in hybrid. So there is a calibration in the U.S., but we have worked with thousands of customers on EV and charging solutions. So policy is one element of it, but also it's just implementing and executing EVs into a fleet operation is quite complex. And our customers are not emotional. It's a math-based problem. It's based on return on investment. So we gained a lot of intelligence on where EVs fit, don't fit, the operating patterns and use case, the optimal set of charging solutions. And as you think about the future and more technologies are coming in autonomy and mobility, we are setting a foundation with our customers for integrating that more advanced technology. Now the curves may look different depending on the customers, the ROI, the complexity of the operations. But the real moat to get this type of domain knowledge because it makes our leadership more durable, including on the vehicle side, really drives that flywheel and it positions us for more long-term shareholder value creation.

I'll go back one more time this time. Just one quick question, if there's from the audience. Otherwise, Ford team will be accessible in many of your meetings. All right. With that, Mike and Navin, thank you for your time.

Yes, perfect. Appreciate it. Thank you.

Thank you, everyone. Thank you.