Xin Yu   Deutsche Bank AG

So welcome to the DB Global Auto Conference. My name is Edison Yu. I lead the U.S. autos research here. We're going to kick things off with a bang this morning with Ford, very pleased to be joined by Andrew and Navin. Thank you.

Andrew Frick   President of Ford Blue & Ford Model e

Good morning, everyone. How are you doing, Edison?

Xin Yu   Deutsche Bank AG

Excellent. Andrew is the President Ford Blue and also Ford Model e. Navin is the CFO of Ford Pro. Between the 2 of you, I'm sure we can cover many aspects of Ford.

Xin Yu   Deutsche Bank AG

Maybe I'll start with Andrew. I know you recently ascended to the role basically running several divisions now. And I think investors actually haven't heard as much from you publicly over the last couple of years. So I'd love to know more about your background at Ford and also kind of your high-level priorities coming in.

Andrew Frick   President of Ford Blue & Ford Model e

Okay. Very good. Well, good morning, everyone. It's great to be here with you, and Edison, thank you for hosting us today. Yes, I've been -- actually, I'll be celebrating my 30th year with Ford on Thursday of this week. So a big week and very excited to be here with all of you. My background primarily has been in marketing, sales and service. And in U.S., worked in our international markets group as a general manager and have been able to work in several positions serving both the Ford and the Lincoln brands over those years.

And then over the last few years, through general management have taken on the role of Ford Blue and then more recently, Model e and Interim for Pro. So from a priority standpoint, our objectives are very clear. We are obviously very focused on cost and quality and reducing that across the Ford Blue business right now. We have -- we're fortunate to have a lot of iconic vehicles in our portfolio. And we're really looking to grow at this point. Our Model e business, we are looking to improve our overall profitability as we come out of our first generation of products and into our second and working on now our advanced electric vehicles for our third generation, and on the Pro business, we just want to continue to accelerate our growth.

This is a huge competitive advantage for Ford. It's an area that we do extremely well in across North America and in Europe, we continue to grow, and we continue to -- we want to continue to, from a prioritization standpoint, just builds up on the competitive moats that we've been able to set up with our Pro business.

Xin Yu   Deutsche Bank AG

It?s been a dynamic start to the year, I think anyone who has been following the auto industry.

Andrew Frick   President of Ford Blue & Ford Model e

To say the least.

Xin Yu   Deutsche Bank AG

I would agree that. It's supposedly the stable year after everything has happened, but we cannot get to break that. So there's been tectonic shifts in U.S. policy. In light of that, I think most people would agree that Ford has emerged at the very least as a relative beneficiary. Where do you see the most opportunities from a competitive perspective and that could be both for consumer and for commercial?

Andrew Frick   President of Ford Blue & Ford Model e

Yes. I would start with -- first of all, that is true. I mean we are really in a position right now to leverage the American footprint and our deep routes that we've had in America for quite some time. Our -- as many of you know, over 80% of the vehicles we sell in the U.S. are built here in the U.S., which gives us an advantage. It's something that we are not in a position where we're having to react too strongly at this point because -- this is not a course correction for Ford. We -- this is a continuation of our strategy and our deep commitment to U.S. manufacturing.

So it puts us in a bit of a different position than many of our competitors that are having to react to this. we're on pretty stable ground at this point as it relates to that footprint, which gives us some optionality in how we want to compete in the market. We have -- like we're saying that we have optionality across our Ford Blue, our Model e and our Pro business. We also have optionality across our vehicle lines in terms of where we want to flex into competitively.

And we have optionality across our powertrain lineup as well. We sell our ICE vehicles. We sell our hybrid vehicles and electric vehicles as well. So we have the ability to really react nimbly to the market and the changing customer dynamics. All of our iconic vehicles really F-150, Explorer, Bronco, on the Pro side, Super Duty and Transit are all 100% built here in the U.S. So we really have an opportunity as we look at how we want to flex the market and compete in the market, we have the ability to look at how we're set up versus our competition and really take advantage of our footprint and really leverage that for us.

Xin Yu   Deutsche Bank AG

How important is growth in market share right now in the U.S? You obviously have some structural advantages with the new policies. And I think we've noticed some of the promotional activity that's been implemented. Is that kind of more of a focus now given the situation relative to perhaps pricing going forward?

Andrew Frick   President of Ford Blue & Ford Model e

Yes. First of all, market share is important to us, but it's important to us if it's done profitably. So it is really that balance of growing our share and doing it in a very profitable way. So from a promotional standpoint, like you talked about, it was very important for Ford to take a leadership position in the market on April 2 when a lot of the tariffs went in place. We felt we're uniquely positioned to really lead in this perspective. And consumers have looked to Ford -- we've been around for over 120 years. We've been through wars, we've been through pandemics. We've been through recession, recessions where we didn't take bailout money, and we really want to be very -- we want to be there for customers at times of uncertainty.

So on April 2, we launched our from America for America campaign, that provided customers with employee pricing, they pay what we pay. And we did that to really take the long game on being there for customers at times of uncertainty. They look to Ford, they look to Ford for stability, and that's what we were able to do. It's really paid off for us in the last 60 days. You've seen a lot of the results in the market last month, and this goes back to your question on growth and how we're doing it.

Last month, coming out of May, we just closed 10 days ago or so. We actually posted a 14.7 share here in the U.S. that's up 1.9 points of share on a year-over-year basis. We -- a lot of times in this industry, we fight for tenth of share and to have a 1.9% increase year-over-year was very strong, and we did it with our profit pillars. Our trucks had the best -- when you look at our whole truck portfolio, it had the best month we have had in 2 decades, in 20 years.

Our Bronco business continues to grow. Our Bronco family sold over around 30,000 units and Bronco Ford beat Wrangler for the seventh consecutive month. And we also were able to grow with our all-new Expedition and Navigator that we just launched, Expedition was up 45%. So these are all profit pillars that we're really leaning into as we look for areas to grow in the market.

And we're leaving the month of May and almost halfway now through the year, our inventories are in a really good position. Our dealers have really gotten behind the from America for America campaign, and we'll continue to run that through the fourth of July time period. And the same is true on the Pro side with Super Duty and Transit, we've been really able to lean into those vehicles and take advantage of a really strong commercial market right now as well.

Xin Yu   Deutsche Bank AG

And do you want to add anything on the commercial side, do those kind of dynamics apply as well from -- of a competitor and from a kind of growth market share standpoint?

Navin Kumar   CFO of Ford Pro

Yes, absolutely. We look at very similar dynamics on the Pro commercial side compared to retail. We're looking at volume opportunities, share opportunities, market equation, and we want to grow profitably. But additionally, in the Pro business, we look at our connected vehicle installed base and our growth in software and services because that's what sustains the competitive advantages and differentiation that Ford Pro has.

Our moats are our deep relationships with customers, the breadth of our vehicle lineup. We have the widest vehicle lineup in the commercial industry. Our partnerships with upfitters and we can configure these vehicles for virtually any on-road use case. And we have the largest dealer distribution and service footprint of any commercial brand. And we're continuing to deepen those moats.

But where Pro goes is with software, we can augment all of that, taking software and connected vehicles, we're really unlocking value for customers. They're able to do more with these vehicles, be more productive as well as minimize downtime. So we're helping customers grow their business and their top line as well as optimize on costs. And it's a virtuous cycle for Ford Pro. We're helping customers. We're leveraging data and insights, which is helping make our vehicles and solutions better and better and more and more optimized, and we're growing it to higher-margin parts and services.

And so this market environment and policy really creates opportunity for us to deepen that market leadership. Because of the breadth of our lineup and the customers and the variety of use cases we serve, that's a real key competitive advantage for Pro. And why that's the case is as policy drives growth in specific areas, for example, investment in infrastructure, and roll out of data centers to support artificial intelligence or residential services, we calibrate our solutions to where the market is and so we can capitalize on those opportunities.

And 2 years ago, when we presented at our Capital Markets Day, our Ford Pro strategy, we have real tangible proof points of progress. We have over 675,000 digital software subscriptions in the fleet solutions space. This is telematics and lean management. We've been growing subscriptions, average revenue per subscription, and we've been growing with both smaller and larger businesses. And on the parts side, our attach rate of parts is about 35% and 2 years ago, it was a little above of 30%.

And we've grown that from capacity actions, adding mobile service, dedicated commercial service base, as well as on the demand side, leveraging software to lead vehicles, customer data and inputs and our dealers' physical service networks. And this is all really integral to delivering the Ford plus plan. our ambition a few years in the future is to have 20% of our profits in Pro come from parts and services. And so what we're doing in Pro is deepening our leadership but it's growing and diversifying the business into more durable profit streams and reducing capital intensity and our exposure to cyclicality.

Andrew Frick   President of Ford Blue & Ford Model e

Yes. And Navin brings up a really good point. And -- so there's investment on our side. Our dealer body has also been and our dealer network has also been investing in this area as well, billions over the last several years. And just to double-click on one of those services around mobile service. Through this year, so far, we've done over 1.5 million mobile services, 1.5 million. So it is not insignificant in terms of how we're really focused on our customers and providing differentiated levels of service for them.

Xin Yu   Deutsche Bank AG

So I think it's safe to say the growth has been impressive. I wanted to shift to costs, Ford, I think even if you have acknowledged this has had a cost issue for a while. I think the commonly cited numbers at one point was $7 billion. Obviously, it's been shrinking. How much progress are we making to address that, in particular, on warranty? And can we accelerate that pace of improvement?

Andrew Frick   President of Ford Blue & Ford Model e

Yes, we are making progress. This has been a main focus of the company for the past several years, and we're starting to see it really pay off. So we've had 3 consecutive quarters of year-over-year improvement. What I really like about how the company is approaching is we're trying to change our -- not by doing little tactical things but really fundamentally changing the system and the culture and the company around how we operate to make this long-term durable, and we're starting to see this pay off.

So systematically, we're really working as a team, as a governance process like across the whole team. It's not just relying on individual team members. But across our PV engineering team, our manufacturing team, our supply chain team, we're doing so much more in terms of vehicle teardowns, understanding what the competition looks like where there's opportunities. That's been a big accelerant for some of the growth that you've seen in some of the results that you've started to see. In the manufacturing lines, we're doing gemba walks and going to the plants and spending a lot of time at individual stations, making sure that we're leveraging the best of our plants across the whole Ford ecosystem in each individual plant.

We've seen really good progress there. And we've spent a lot of time with our supply chain team and our supplier partners. So much of our progress will be done through the supplier partners. And I'm really proud of how the team is working differently. We've actually brought in a lot of specialists into the organization to bring new technical skills and new technical tools to us. So we're starting to see the results, $1 billion improvement on a year-over-year basis, excluding the tariff impact. But we just went through the major launches for us this year, and we didn't lose any production. So our production, that's the first time in many years, we did not lose production through a launch.

So our production stability has improved quite a bit, our 0 MIS, which is the quality, leaving the plant -- when it leaves the plant at 0 months in service is up considerably double-digit improvement. Our 3 months in service quality is up double-digit improvement. So we're seeing these start to pay off. We're doing much longer-term testing and we're really across every nature of the business, just running the business in a different way. So we are closing the gap, as you said, but we still have a long way to go. And we're still really balanced in our approach. We're -- we understand what's ahead, and we know this is a big opportunity for us at the same time.

Navin Kumar   CFO of Ford Pro

Edison, I'll add that growing the Pro services ecosystem is directly linked to us addressing cost as a company. Those connected vehicles and the software, that data directly links into our quality systems. And like Andrew mentioned earlier, our mobile -- growing our physical services and our proactive service and our reactive service that helps us not just minimize vehicle downtime for customers, but optimize on total cost of repair, which will translate into improved warranty costs.

And then longer term, that data will help inform the vehicles and the solutions we provide, and we can optimize our costs there and including on things like order to delivery, where we're driving more efficiencies in those processes for customers, so the customers benefit because they know when vehicles are coming and entering into their fleets. And we optimize on inventory and working capital, which will also benefit costs. So growing those services is also just really directly linked into the cost optimization that we're doing in the company as well.

Andrew Frick   President of Ford Blue & Ford Model e

Speed to resolution as we have issues really does matter. It really helps the warranty side.

Xin Yu   Deutsche Bank AG

Another element of cost, and I promise we won't dwell on this too much tariffs, someone is probably going to throw something, maybe if we talk about this too much. But what are you planning to do to mitigate some of these? I realize you're probably in the best position among the OEMs. But for example, I saw you raised prices on models produced in Mexico. Is that kind of the response basically to some of these costs?

Andrew Frick   President of Ford Blue & Ford Model e

Yes. I mean we were clear in our first quarter earnings that we see about a $2.5 billion headwind associated with this on a gross basis and net of around $1.5 billion. Because we do plan to offset around $1 billion of cost actions and mitigating actions. The pricing environment is really interesting because it's really important as -- the way we're looking at is we're really doing -- we spend a lot of time doing market analysis and segment analysis. So we are looking literally vehicle-by-vehicle segment by segment, where is our manufacturing footprint set up, where are our competitors, where are they likely to price? How are they likely to price?

A lot of people just think top line pricing is what we should be looking for. The reality is there are many different ways to price a vehicle. And we're starting to see that play out in the marketplace right now. There is top line pricing, which some companies have taken and some are starting to take more of as we get into the June time period here, we've seen more activity in the last I'd say, 20 days or so. But it's important to also look at the net pricing. And what I mean by that is there are a lot of levers. There's variable marketing incentives, there's different series mixes that companies can use as a lever to manage their overall pricing.

We've seen companies change the way they provide customer incentives, maintenance packages. So we've seen company sale. We're not going to actually raise prices. We're committed to not raising prices, yet they de-escalated their variable marketing. They took away maintenance packages and they did other things, which is a form of net pricing. So there's a lot of ways that companies are doing this. We're watching this literally every single day. And we're game planning it around our strengths and where we can lean into the market.

This goes back to the growing and growing profitably and leveraging the footprint that we have here in the U.S. because it is really important for us to take advantage of the market where we can and price it in an intelligent way. But like I said before, we're really going to balance that mix of production, pricing and overall competitiveness based on what's the most profitable for Ford. But it is -- you used the word dynamic earlier. It is an extremely dynamic market right now, and competitors are facing a lot. Fortunately, we're in a better position. So it allows us to be more nimble and react and lean into customers.

And I'd like to say right now at these times of crisis, just like our from Americas, for America campaign, during these times, we want to really be on the right side of the customers and lean into the customers.

Xin Yu   Deutsche Bank AG

On the Ford Pro side, how do we -- I guess, how do we think about it from the fleet perspective, maybe perhaps or the government customer perspective, is the tariff you sort of pass that on? Or is it mitigated differently?

Navin Kumar   CFO of Ford Pro

It's exactly the same levers that Andrew talked about on the retail side. And this is one of the great things of having Andrew as a partner because there are things that are very segment specific, like growing our services ecosystem. But when it comes to market equation, tariff mitigation actions, we're working together as 1 team, and we're balancing across the business. Now in the fleet space, you have orders that we get in from large corporate fleets and we're negotiating those directly. We have our dealers engaging with small businesses.

So there's other dynamics there. And there could be things like taking what Andrew said about variable marketing incentives, you have some volume weighted incentives in those markets. So you have these other levers and dials. That said, 3 weeks ago, we had our fleet showcase event in Detroit. So we had a top 400 large accounts coming in, and we're talking to them about the business, the market environment, vehicle lineup and our services.

And there's a lot of optimism, demand for trucks, chassis, wagons continues to be robust in the environment. And so we look at the same levers. But additionally, Edison, like I mentioned earlier, we're really focused on growing our connected vehicle installed base. So what we're looking at also on top of all of the levers that we just talked about is customer lifetime value. share of wallet growth, units in operation potential and other loyalty factors.

Andrew Frick   President of Ford Blue & Ford Model e

And we have in the commercial space, again, our 2 primary vehicles with Super Duty and Transit, both built here in the U.S., our competitors are not in that same position. So there's an opportunity with highly profitable vehicles for Ford and 2 vehicles that our Pro customers really rely on for their business to generate their own revenue. We're really going to take advantage of that situation and lean in. And it's already paid off in the last 60 days or so.

Xin Yu   Deutsche Bank AG

I wanted to talk about Model e. You've obviously taken the lead over there. We've heard Jim talk about skunkworks being the foundation of the future EV strategy. I guess, what is the objective until then. Because I realize you're going to keep some of the skunkworks up underwrap, surprised people. From now until the next couple of years, what is the strategy?

Andrew Frick   President of Ford Blue & Ford Model e

Well, the EV strategy really hasn't fundamentally changed. We want to exercise the right capital allocation first and foremost. So we want to put our money into the vehicles and into our Model e vehicles where we know we have a long-term sustainable future. So it's important to know we have a strong basis even in this first generation where we've learned a lot. I mean, the last 3 years, we've been the #2 automaker in EV sales in the U.S. So Mach-E and Lightning, our 2 main vehicles have done very well in the market.

Mach-E continues to grow. What's -- what doesn't get talked about a lot right now is we actually are launching right now new vehicles in Europe. We have the Capri, we have the Explorer. We have our next-generation Puma electric vehicle that we just launched, that's doing extremely well. And those are all in a better profit position than even the Mach-E and the Lightning have been here in the U.S., and we're improving on that profitability as well.

So in the near term, it's about making -- competing in the market with those products. It's about allocating capital in a very smart way. It's about making tough choices at times. For example, our battery capacity, making sure that we have the right footprint there to serve our longer-term needs. It is -- we made a tough decision on the original 3-row Model e vehicle that we ended up canceling because we didn't think it was going to be profitable in the long run and we repurposed that capital allocation actually for Super Duty, where we have a tremendous amount of upside on our -- with our Pro business.

So it's about really in the near term, making those decisions and investing for the long term. And a lot of that has to go into the advanced next generation of EV vehicles that we're really looking forward to. We've learned a lot around how the market is reacting to electric vehicles around the use cases that customers -- that make sense for customers.

And if you look at an F-150, for instance, we offer gas, hybrid and electric. And for some of our electric F-150 customers, their use case doesn't make sense for them to buy an electric vehicle. They should buy a hybrid with Pro Power Onboard or they should buy a gas vehicle. And in some cases, they should be buying up Lightning instead of one or the other. So we are really trying to educate customers on what the right use case is for their specific needs and having that flexibility across powertrains really does matter.

In the future for electric, we really think that the smaller-sized vehicles, where we actually do very well and trucks and utilities are going to be a great place to compete. We think they can really lean into the specific customer use cases and we can control the costs in a completely different way than what we're seeing others invest in, in the market. So we feel good about the near term. We have work to do on this as well, just being completely transparent. We're continuously working our profit improvements and focus on what the customer is and what they're looking for.

Xin Yu   Deutsche Bank AG

I think it's a good segue to Europe. You already sort of mentioned it. What are you seeing on the ground over there? There's obviously a much different market better than the U.S. And whether it's on the mission side, I guess what's Ford's kind of strategy to deal with that? And also just longer term, I think it's maybe not clear from the outside what is the end game in Europe, both on the commercial and the consumer?

Navin Kumar   CFO of Ford Pro

Yes, I'm happy to take this one. And I'll start with Ford Pro. I'll start with Ford Pro and it is good. Our Pro business is strong and growing, and we're managing new entrants, compliance and costs. So the overall commercial market in Europe is softening, and we're seeing some contraction in end markets like manufacturing. That said, Ford Pro's results on a year-to-date basis, our volume has actually grown year-on-year, and our share has grown by over 3 percentage points. And that's been driven by our fresh product lineup that includes the Transit Custom, Ranger, the Transit Courier and flexibility on powertrains, like Andrew mentioned, ICE, hybrid, electric vehicles.

So we're giving customers in Europe, the power of choice. The Chinese are in the space in Europe in commercial, and they've been, to date, delivery focus, and the moats we talked about earlier with Pro on our breadth of customers we serve, our use cases, the widest vehicle lineup of anyone in the industry, a partnership with upfitters and our services ecosystem. What we are seeing in Europe is Ford Pro has gained share year-on-year in the commercial space.

And so that is a key critical proof point of showing how we can compete and differentiate versus new entrants in the market. And then on the compliance side, what the EU is doing in terms of working through 3-year fleet averaging for CO2, we strive to be CO2 compliant in every market we operate in. But that puts us in the -- that moves the market in the right direction to start better calibrating regulations with customer demand.

And for Ford, that gives us levers to optimize on vehicle, vehicle mix, markets and between commercial and consumer retail applications. On the cost side, we have made progress, but we have more work to do. It's everything that Andrew said earlier. What's different about Europe and for the Pro business is that we source our vans from our joint venture partner, Ford Otosan, which is based in Turkey. And so this is a purchased vehicle arrangement.

And the Turkish inflation has been persisting and the lira has not devalued against the dollar at a pace that would offset those costs. So everything that Andrew described earlier in terms of processes, governance, live walks at plants, technical teardowns, working with suppliers. We are doing that in our joint venture partner, Ford Otosan, and it's been driving a very tight partnership with Ford.

And so the learnings we're getting out of doing that work with Otosan is helping influence what we're doing in Ford and vice versa. So it's a really good symbiotic partnership, and we're making progress, but we have more work to do. And on the retail side, we're seeing some pricing pressure as OEMs are taking actions to deliver compliance. But like Andrew mentioned earlier, it's really about having a great product, and we're really pleased with the Puma EV recent launch, the Capri and Explorer EVs from last year.

And so to summarize on the retail side, it's really about having that great vehicle and EV lineup. Our Pro business has grown historically and we're going to continue to grow it on volume and on our services. And just like with Ford overall, addressing cost is the biggest unlock for our operation in Europe.

Xin Yu   Deutsche Bank AG

You mentioned China earlier. Maybe we can go to that part of the world. Ford obviously has a presence there. But I think you've talked about learning, applying some of those learnings as well taken some the JVs over there to even U.S. or Europe. So I guess what is the role of China, I guess, Ford China now, going forward? Is it mainly export hub? Is it mainly to kind of cultivate R&D that can be also because of the speed of competition. How does one think about that?

Andrew Frick   President of Ford Blue & Ford Model e

I think it's everything that you actually just said, really, it is about being an export hub for Ford. We've really rightsized our overall presence in China to scale to the market and what we're actually selling in the market. So that is also a dynamic market, as you can imagine. But we've done quite well out in China last year, $900 million, and a lot of that was based on the export success that we had.

So I take a vehicle like Territory with our JV partner. We are now exporting Territory all around the world throughout ASEAN markets, throughout South Africa. We're in South America. It's doing quite well in Mexico -- actually in Mexico, Territory is now our best-selling vehicle. We sell more Territory than we do F-150s in Mexico, where there's a big Chinese influence. So it's doing very well for us. It's a very profitable business. It's capital light, because of the partnership that we have. So it's a really good investable business there.

And in terms of what we're learning from the market itself, we were just there a few weeks ago as a leadership team. Speed, the way they're integrating AI into their vehicles and into their customer experience and their digital experience is really impressive and how we leverage the learnings that are there, not only from the actual customer experience that they're going through, but the development plans, their processes, we're taking a lot of that knowledge and trying to transfer it.

Now it's not just a copy and paste because the markets are so different. China is different from the U.S., different from Europe, et cetera, South America. So what we're trying to do is really replicate the intellectual approach, the speed that they do business on, learn from our JV partners and then transfer that knowledge within the company. But it's an impressive industry.

We're learning a lot on their new energy vehicles as well and where the natural demands of electric vehicles and EREV technology and hybrids are really landing because that will likely inform plus or minus government subsidies and incentives, that will inform where natural customer demand may be in other parts of the world. So there's a lot to learn in China.

Xin Yu   Deutsche Bank AG

If we tie the 2 regions together, there's obviously a lot of them trying to go to Europe. From that perspective, are you seeing some of the China OEMs get any traction?

Andrew Frick   President of Ford Blue & Ford Model e

Yes. They're setting their presence up in Europe. They're setting it up in ASEAN markets in South America, Mexico, like I said, I think almost 30% of the Mexico industry now is there. But in Europe, yes, they're growing, increasing their presence, increasing their footprint. This is where I really love our Pro business. Because our Pro business strength and the over 3 points of share growth we've seen there and continued investment in Pro, that they are not necessarily investing in that area.

So that's a really good opportunity for us to continue to differentiate the Ford brand and compete in a different way. That's a very -- that plays to our strength and really should be a long-term advantage for us. It's a different market or it's a different type of business, so you have to invest over a long time.

Xin Yu   Deutsche Bank AG

I hear you. So Ford -- switching, we'll also do something secular, talk about something secular autonomy, vehicle economy, which is everyone's favorite topic, I'm sure. You've hinted that you will partner up potentially with advanced vehicle autonomy. What can you tell us about these efforts and how you think about build versus buy on ADAS or advanced ADAS?

Navin Kumar   CFO of Ford Pro

So I'll take this one. Actually, before I was the CFO of Ford Pro, I actually worked in the Autonomy and Mobility space for Ford. And that Ford, we're taking an evolutionary approach to transitioning to software-defined vehicles. We're focusing on centralizing compute, middleware and controlling key areas of the software tech stack. And that includes infotainment and ADAS. We're really focused on areas that are visible to the customer and integral to the customer experience.

So then to get the specifics on autonomy. Our Level 2 solution, it's called BlueCruise. We have over 350 million miles driven. It's won multiple consumer awards. The system is getting more and more capable. For example, last year, we launched automatic game changing and it's all developed in-house. And building a customer installed base with BlueCruise is really important to build trust in the brand and the solutions, and this is a precursor to Level 3 autonomy, which is right around the corner.

And with Level 3 is eyes off on highway driving, and that's really game changing. We're developing those solutions in-house with our Latitude team, and that consists of many of the people were at Argo and transitioned to Ford a few years ago. And we believe our Level 2 and our future Level 3 solutions will be among the best in the industry in execution.

And regarding Level 4 economy, we're being really thoughtful and practical. We're balancing innovation, capital and we're well positioned. And in my view, there's 4 elements. One, we have a really strong technical leadership team in Doug Field and Sammy Omari. They know the space really well. They know the solutions out there. They have a deep understanding of the Waymo solution, for example. The second, while it's a different technology stack with Level 4 versus Level 2 and Level 3. Building and scaling Level 2 and Level 3 with customers, builds trust in these economy solutions. So there is an inextricable linkage there.

The third point is we're really confident in our ability to integrate future and more and more advanced autonomy solutions into our platforms into the future. And then the fourth point is Ford Pro has a really important role to play here. Because there's an autonomy technology, there's the integration with vehicles and putting in all those functional safety redundancy systems, but they're integrating these vehicles into mixed suites, especially for commercial applications. orchestrating these vehicles among the mixed fleet, servicing these vehicles, charging, maintaining these vehicles. And we're doing all of this right now with electric vehicles.

In aggregate, we're the country's largest electric vehicle fleet. We have hundreds of thousands of customers. They have a myriad of use cases and needs around range and charging. And so we're learning a lot. We're getting deep operational expertise, technical know-how, customer use case insights and this is all going to be really relevant as autonomy scales into use cases and expand beyond ride-hail over time.

And then on the second part of your question regarding build, buy and partner, we believe, as an industry, OEMs should be evaluating partnerships to unlock value for customers and that can be in vehicle platforms, technology and just general areas of scaling. What we look at it for because we have a pretty good track record in partnerships.

We mentioned Ford Otosan earlier, our Chinese partners is really customer first and foremost, is this going to drive differentiated and unlocked value for customers? Is our IP with a partners, IP is going to be game-changing. Is it going to advance speed to market efficiency, drive a better execution and then fit, which is really important, strategic fit, long-term growth potential, durability in these partnerships. I come from an M&A background and business development. So I spend a lot of time in the space.

And culture, cultural fit, aligned values, aligned brands and really does it tie to the tenets of our Ford+ plan, is it going to drive growth, diversification, margin expansion and derisk in terms of capital expenditures as well as cyclicality and so we apply the same framework as we look at potential autonomy partnerships in parallel with our internal development of our Level 2 and Level 3 solutions. And like I mentioned, Ford Pro has such a key role to play because it's not just about the technology. It's about bringing this ecosystem to customers, especially in the commercial space.

And that involves maintenance, service, upfitting vehicles, charging solutions and then deliberately working with customers to scale these solutions over time. And the beauty of Pro is that we directly engage with customers. So we're getting those insights and the feedback that can help inform how to deploy and scale autonomy.

Xin Yu   Deutsche Bank AG

So if you use that together with -- obviously, Ford Pro has a lot of fleet management, #1 fleet management. You also have the biggest U.S. footprint, robotaxi. Any thoughts there?

Navin Kumar   CFO of Ford Pro

Yes. We look at that space. We see scaling there and you know what Weibo is doing. And I think there's definitely opportunities. I'll give a really discrete tactical example. As autonomy scales and they start mapping out cities and you want to go in and start mapping those markets. You want to do that in a very asset-light way. And that's where Pro can become a really valuable partner in terms of our mobile service, our charging solutions, and we've actually set up our charging solution network with our dealers.

And that can help autonomy companies enter markets, test, pilot, validate, start mapping in a really quick and lean way. And I'd love to give a tactical near-term example because there is an ambitious future state out there with autonomy and there's way more we can do with the Pro ecosystem. But even in the now, as you're starting to see companies like Waymo are mapping and scaling into other markets pretty quickly, we definitely believe we have an interment role to play as a partner.

Xin Yu   Deutsche Bank AG

So lastly, from my end, Ford is getting back to F1 in a big way, your crosstown rival has a team now. Why do you think there's this big push from the U.S. to get back in F1? And what is Ford looking to achieve?

Andrew Frick   President of Ford Blue & Ford Model e

I'm not sure why there's a broader big push. I can tell you what it means for Ford and why we're excited about it. So first and foremost, it is a growing sport without question and a very popular sport. But I always joke, Lynn always says and I love this line. It's not a vanity project for Ford. And it's not. This is actually -- just like Navin was talking about technological know-how and really understanding the future of electric vehicles and hybrid propulsion and different technologies, there is no better field to get into than what's going on in the F1 field and when it comes to that type of intellectual advancement.

So when we look at it, we're not just slapping a Ford oval on a vehicle like we are totally involved in the process. We have dedicated motorsports teams and racing teams and engineers that are co-developing. We partnered with Red Bull with a proven leader to be able to actually get the most out of where they've come. We're not building from the ground up. We're actually joining a partnership that's been very successful, and they've been extremely collaborative for us, and even the early phases as we go to enter it next year.

But this is -- I like -- a lot of people don't realize that we do a lot of partnerships like this so we can make our mainstream vehicles better. So if you look at NASCAR, for instance, it makes Mustang better for our customers. That's why Mustang has almost 60% segment share. If you look at Bronco, the success of Broncos, we raised the king of the hammers not just to have fun racing a king of the hammers. We learned so much about the necessary technology that we want to put into -- what we want to put in, what we don't want to put in for our mainstream customers that makes Bronco as good as Bronco is, and the same will be true with F1 with our future electrified vehicles.

Like we are learning -- this is a learning lab for us. It's a great way to practically apply all of the learnings from world-class engineers into our mainstream products. And we are really excited about the overall -- the sport itself. There's a lot of, obviously, a lot around it, worldwide. It's a global business as well, just like we are. So there's a lot of -- there are a lot of marketing opportunities. There are a lot of those aspects to it, of course, that we're going to lean into as well and a fan base that's really big and exposure for the brand is great.

But this is -- it's a marketing plus technological know-how that we're really looking to get. That's why we're so excited about it.

Navin Kumar   CFO of Ford Pro

Yes. Edison, I'd add, I was an engineer like over 20 years ago, I can geek out about the stuff all the time, and it's great for our talent. When we work with these partners, and we get improvements at aero, weight reduction, design changes, system changes, removing a bracket, like those type of things really excite our team because it shows progress and continuing to build on the success. And so there's everything that Andrew described, but for the internal team is really galvanizing in terms of product development and deployment.

Andrew Frick   President of Ford Blue & Ford Model e

That is really true. The ability -- this relationship and the amount of talent that we've been able to take a look at bringing into the company because people are attracted to this and want to work in this -- on this type of a project is really important. And we've already built a really good advanced electric vehicle team that you mentioned before. We've got world-class, the best EV leaders in the world are working at Ford now, and this is going to continue to attract talent for us. So there's a lot of reasons to get into it besides maybe the face value side of it. So thank you for asking that.

Xin Yu   Deutsche Bank AG

I think we have time for 1 question. Anyone in the audience wants to? I think we have one on the back.

Unknown Analyst  

I'd like to come back to your comments on Europe, if I may. Could you comment on the pricing by powertrain. So I think you said pricing is a bit under pressure. Is that mostly BEVs or is it also on ICE. And then if you could comment on the order momentum in that market.

Andrew Frick   President of Ford Blue & Ford Model e

Yes. It's a really good question, and it's actually changing by the month, and it's changing by the month for a few reasons. Navin talked about the different pricing environment. But you have some companies that have chosen to purchase credits to help accomplish those compliance, the regulatory compliance needs. Some have not participated in that pooling.

And so there are certain channels in Europe that are getting really aggressive in their pricing. So if you look at some of the EV pricing around some of the fleets, some companies are going very deep into that. They're discounting on certain fleets, 25%, 30%, which is more than what we've seen over the last -- even 60, 90 days ago as they're trying to balance their full year compliance position. We're not in that position. We did purchase credits. We feel very balanced. We've actually seen our ICE pricing stabilize quite a bit.

And in some cases, we've actually been able to increase our ice pricing as we try to balance that with our electric vehicles. So generally, the EV pricing environment has come down, very similar to what we've seen in other parts of the world, just as there's certain volume that is trying to be a hit versus the natural adoption curve. At the same time, that 3-year leveling that was announced across -- from a compliance standpoint is really helping. People are reacting to that in terms of their near-term pricing actions as well.

So it is extremely dynamic, maybe more dynamic than anywhere else right now in the world in terms of the ICE EV pricing environment. That's where another -- on the Pro side, we've been able to actually take a totally different tack and not have to participate as much in that pricing dynamic that's happening more in the PVs, passenger vehicle side of the business. Good question. Thanks.

Xin Yu   Deutsche Bank AG

Perfect. Thank you.

Andrew Frick   President of Ford Blue & Ford Model e

Edison, Thank you very much. Really appreciate you doing this, and thanks for everyone.

Navin Kumar   CFO of Ford Pro

Thank you, everyone.