Ford's Strategic Shift in EV Spending and Powertrain Flexibility
Jim Farley highlighted a significant reallocation of EV capital from first-generation products to next-generation EVs, including a move towards LFP batteries and a focus on hybrid and PHEV offerings.
The company is shifting from a broad EV launch schedule to a more selective, segment-focused approach, emphasizing profitability and customer preferences.
Ford's strategy involves partnerships for EV architecture, especially in international markets, and a focus on regional customization to optimize costs and compliance.
Adjusted free cash flow was solid at $2.8 billion, with a strong balance sheet holding more than $28 billion in cash and $46 billion in liquidity.
Ford Blue earned nearly $700 million in the quarter, reflecting profitable market share gains, higher net pricing, and cost improvements.
Ford Credit delivered $645 million of EBT, up $300 million year-over-year, with strong portfolio performance and paid $500 million distribution in the quarter.
Ford delivered a record $50 billion in revenue in Q2 2025, with $2.1 billion in adjusted EBIT despite a net tariff impact of about $800 million.
Ford Pro's revenue grew 11% to nearly $19 billion with a 12.3% EBIT margin driven by strong product lineup and high-margin services.
Global revenue grew 5% year-over-year, outpacing wholesale growth of 4%, with the fourth consecutive quarter of cost improvement excluding tariffs.
Model e revenue more than doubled to $2.4 billion with a margin improvement of nearly 44 points due to mix and operational efficiencies.
GM's Strategic Investment in US Manufacturing to Reduce Tariff Exposure
$4 billion investment in US assembly plants to add 300,000 units of capacity for high-margin light-duty pickups, SUVs, and crossovers.
Capacity to come online in 18 months, with projections to build over 2 million vehicles annually in the US.
Additional capacity includes production of Cadillac Escalade and next-generation pickups, with shifts in ICE production to Fairfax and Spring Hill to optimize utilization.
Investments aim to reduce tariff exposure, meet unmet customer demand, and provide flexibility to adjust ICE and EV mix.
Introduction of Avis First: A Category-Defining Premium Rental Service
Avis First is a new premium product offering that aims to redefine first-class in car rental, providing seamless, high-quality service with concierge support.
The service includes features like preconditioned vehicles, seamless Bluetooth connectivity, and curbside pickup, targeting over 50 markets by year-end.
Management emphasizes that Avis First is designed to elevate customer experience, differentiate from competitors, and grow the overall industry revenue and profit pools.
A significant recall affecting 4% of the Americas fleet, including high RPD segments like transit vans and mini vans, has negatively impacted vehicle sales and fleet management.
Despite challenges, the company maintains a target of at least $1 billion EBITDA in normalized years.
Gains on depreciation were smaller than the previous quarter and are expected to be minimal for the full year.
Pricing per day (RPD) has been challenged throughout the year, with volume stronger than pricing.
The quarter's financial results met expectations with consistent execution and minimal need for interpretation.
Used car gains have been impacted by tariffs causing delays in new model year vehicle deliveries, affecting fleet rotation and depreciation.
Dafinchi
