Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

☑ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2024

or

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission file number 1-3950

Ford Motor Company

(Exact name of Registrant as specified in its charter)

Delaware									38-0549190
(State of incorporation)									(I.R.S. Employer Identification No.)
One American Road
Dearborn,			Michigan						48126
(Address of principal executive offices)									(Zip Code)

313-322-3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class						Trading symbols						Name of each exchange on which registered
Common Stock, par value $.01 per share						F						New York Stock Exchange
6.200% Notes due June 1, 2059						FPRB						New York Stock Exchange
6.000% Notes due December 1, 2059						FPRC						New York Stock Exchange
6.500% Notes due August 15, 2062						FPRD						New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

As of June 28, 2024, Ford had outstanding 3,904,327,951 shares of Common Stock and 70,852,076 shares of Class B Stock. Based on the New York Stock Exchange Composite Transaction closing price of the Common Stock on that date ($12.54 per share), the aggregate market value of such Common Stock was $48,960,272,506. Although there is no quoted market for our Class B Stock, shares of Class B Stock may be converted at any time into an equal number of shares of Common Stock for the purpose of effecting the sale or other disposition of such shares of Common Stock. The shares of Common Stock and Class B Stock outstanding at June 28, 2024 included shares owned by persons who may be deemed to be “affiliates” of Ford. We do not believe, however, that any such person should be considered to be an affiliate. For information concerning ownership of outstanding Common Stock and Class B Stock, see the Proxy Statement for Ford’s Annual Meeting of Stockholders currently scheduled to be held on May 8, 2025 (our “Proxy Statement”), which is incorporated by reference under various Items of this Report as indicated below.

As of February 3, 2025, Ford had outstanding 3,892,595,628 shares of Common Stock and 70,852,076 shares of Class B Stock. Based on the New York Stock Exchange Composite Transaction closing price of the Common Stock on that date ($9.89 per share), the aggregate market value of such Common Stock was $38,497,770,761.

DOCUMENTS INCORPORATED BY REFERENCE

Document						Where Incorporated
Proxy Statement*						Part III (Items 10, 11, 12, 13, and 14)

---

• As stated under various Items of this Report, only certain specified portions of such document are incorporated by reference in this Report.

Exhibit Index begins on page 98

FORD MOTOR COMPANY

ANNUAL REPORT ON FORM 10-K

For the Year Ended December 31, 2024

			Table of Contents						Page
			Part I
Item 1			Business						1
			Overview						2
			Ford Blue, Ford Model e, and Ford Pro Segment						2
			Ford Next Segment						5
			Ford Credit Segment						6
			Corporate Other						7
			Interest on Debt						7
			Governmental Standards						7
			Human Capital Resources						14
Item 1A			Risk Factors						17
Item 1B			Unresolved Staff Comments						31
Item 1C			Cybersecurity						32
Item 2			Properties						34
Item 3			Legal Proceedings						35
Item 4			Mine Safety Disclosures						37
Item 4A			Information about our Executive Officers						38
			Part II
Item 5			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities						39
Item 6			[Reserved]						40
Item 7			Management’s Discussion and Analysis of Financial Condition and Results of Operations						41
			Key Trends and Economic Factors Affecting Ford and the Automotive Industry						41
			Results of Operations - 2024						44
			Ford Blue Segment						46
			Ford Model e Segment						47
			Ford Pro Segment						47
			Ford Next Segment						49
			Ford Credit Segment						49
			Corporate Other						52
			Interest on Debt						52
			Taxes						52
			Results of Operations - 2023						53
			Ford Blue Segment						55
			Ford Model e Segment						56
			Ford Pro Segment						56
			Ford Next Segment						57
			Ford Credit Segment						57
			Corporate Other						58
			Interest on Debt						58
			Taxes						58
			Liquidity and Capital Resources						59
			Credit Ratings						71
			Outlook						72
			Cautionary Note on Forward-Looking Statements						73
			Non-GAAP Financial Measures That Supplement GAAP Measures						75

Table of Contents

(continued)

			Non-GAAP Financial Measure Reconciliations						77
			2024 Supplemental Financial Information						79
			Critical Accounting Estimates						83
			Accounting Standards Issued But Not Yet Adopted						90
Item 7A			Quantitative and Qualitative Disclosures About Market Risk						91
Item 8			Financial Statements and Supplementary Data						94
Item 9			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure						94
Item 9A			Controls and Procedures						95
Item 9B			Other Information						95
Item 9C			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections						95
			Part III
Item 10			Directors, Executive Officers of Ford, and Corporate Governance						96
Item 11			Executive Compensation						96
Item 12			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters						96
Item 13			Certain Relationships and Related Transactions, and Director Independence						96
Item 14			Principal Accounting Fees and Services						96
			Part IV
Item 15			Exhibits and Financial Statement Schedules						97
Item 16			Form 10-K Summary						102
			Signatures						103
			Ford Motor Company and Subsidiaries Financial Statements
			Report of Independent Registered Public Accounting Firm						105
			Consolidated Income Statements						108
			Consolidated Statements of Comprehensive Income						108
			Consolidated Balance Sheets						109
			Consolidated Statements of Cash Flows						110
			Consolidated Statements of Equity						111
			Notes to the Financial Statements						112
			Schedule II — Valuation and Qualifying Accounts						177

PART I.

ITEM 1. Business.

Ford Motor Company was incorporated in Delaware in 1919. We acquired the business of a Michigan company, also known as Ford Motor Company, which had been incorporated in 1903 to produce and sell automobiles designed and engineered by Henry Ford. We are a global company based in Dearborn, Michigan. With about 171,000 employees worldwide, the Company is committed to helping build a better world, where every person is free to move and pursue their dreams. The Company’s Ford+ plan for growth and value creation combines existing strengths, new capabilities, and always-on relationships with customers to enrich experiences for customers and deepen their loyalty. Ford develops and delivers innovative, must-have Ford trucks, sport utility vehicles, commercial vans and cars, and Lincoln luxury vehicles, along with connected services. The Company offers freedom of choice through three customer-centered business segments: Ford Blue, engineering iconic gas-powered and hybrid vehicles; Ford Model e, inventing breakthrough electric vehicles (“EVs”) along with embedded software that defines always-on digital experiences for all customers; and Ford Pro, helping commercial customers transform and expand their businesses with vehicles and services tailored to their needs. Additionally, the Company provides financial services through Ford Motor Credit Company LLC (“Ford Credit”).

In addition to the information about Ford and our subsidiaries contained in this Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K Report” or “Report”), extensive information about our Company can be found at https://corporate.ford.com, including information about our management team, brands, products, services, and corporate governance principles.

The corporate governance information on our website includes our Corporate Governance Principles, Code of Ethics for Senior Financial Personnel, Code of Ethics for the Board of Directors, Code of Corporate Conduct for all employees, and the Charters for each of the Committees of our Board of Directors. In addition, any amendments to our Code of Ethics or waivers granted to our directors and executive officers will be posted on our corporate website. All of these documents may be accessed by going to our corporate website, or may be obtained free of charge by writing to our Shareholder Relations Department, Ford Motor Company, One American Road, P.O. Box 1899, Dearborn, Michigan 48126-1899.

Our recent periodic reports filed with the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge at https://shareholder.ford.com. This includes recent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as well as any amendments to those reports, and our Section 16 filings. We post each of these documents on our website as soon as reasonably practicable after it is electronically filed with the SEC. Our reports filed with the SEC also may be found on the SEC’s website at www.sec.gov.

Our Integrated Sustainability and Financial Report, which details our performance and progress toward our sustainability and corporate responsibility goals, is available at https://sustainability.ford.com.

The foregoing information regarding our websites and their content is for convenience only and not deemed to be incorporated by reference into this Report nor filed with the SEC.

Item 1. Business (Continued)

OVERVIEW

Below is a description of our reportable segments and other activities as of December 31, 2024.

FORD BLUE SEGMENT

Ford Blue primarily includes the sale of Ford and Lincoln internal combustion engine (“ICE”) and hybrid vehicles, service parts, accessories, and digital services for retail customers, together with the associated costs of development, manufacture, and distribution of the vehicles, parts, accessories, and services. This segment focuses on developing Ford and Lincoln ICE and hybrid vehicles. Additionally, this segment provides hardware engineering and manufacturing capabilities to Ford Model e and manufactures vehicles on behalf of Ford Pro and, in certain cases, Ford Model e. Ford Blue also includes:

• All sales for markets not presently in scope for Ford Model e or Ford Pro (as further described below)

• In markets outside of the United States and Canada, sales to commercial, government, and rental customers of ICE and hybrid vehicles not considered core to Ford Pro

• Sales of EVs by our unconsolidated affiliates in China

• All sales of vehicles manufactured and sold to other OEMs

FORD MODEL E SEGMENT

Ford Model e primarily includes the sale of our electric vehicles, service parts, accessories, and digital services for retail customers, together with the associated costs of development, manufacture, and distribution of the vehicles, parts, accessories, and services. This segment focuses on developing EV and digital vehicle technologies, as well as software development. Additionally, Ford Model e provides software and connected vehicle technologies on behalf of the enterprise, and manufactures certain EVs, including for Ford Pro. Ford Model e operates in North America, Europe, and China. Ford Model e also includes EV and related sales not considered core to Ford Pro to commercial, government, and rental customers in Europe, China, and Mexico.

FORD PRO SEGMENT

Ford Pro primarily includes the sale of Ford and Lincoln vehicles, service parts, accessories, and services for commercial, government, and rental customers. Included in this segment are sales of all core Ford Pro vehicles, such as Super Duty and the Transit range of vans in North America and Europe and all sales of Ranger in Europe. In the United States and Canada, Ford Pro also includes all vehicle sales to commercial, government, and rental customers. This segment focuses on selling ICE, hybrid, and electric vehicles, and providing digital and physical services to optimize and maintain fleets, including telematics and EV charging solutions. This segment reflects external sales of vehicles produced by Ford Blue and Ford Model e and the costs (including intersegment markup) associated with acquiring vehicles for sale and providing services. Ford Pro operates in North America and Europe.

General

Our vehicle brands are Ford and Lincoln. In 2024, we sold approximately 4,470,000 vehicles at wholesale throughout the world. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“Item 7”) for a discussion of our calculation of wholesale unit volumes.

Substantially all of our vehicles, parts, and accessories are sold through distributors and dealers (collectively, “dealerships”), the substantial majority of which are independently owned. At December 31, the approximate number of dealerships worldwide distributing our vehicle brands was as follows:

Brand			2023						2024
Ford			8,639						8,212
Ford-Lincoln (combined)			503						451
Lincoln			385						343
Total			9,527						9,006

We do not depend on any single customer or a few customers to the extent that the loss of such customers would have a material adverse effect on our business.

Item 1. Business (Continued)

In addition to the products we sell to our dealerships for retail sale, we also sell vehicles to our dealerships for sale to fleet customers, including commercial fleet customers, daily rental car companies, and governments. We also sell parts and accessories, primarily to our dealerships (which, in turn, sell these products to retail customers) and to authorized parts distributors (which, in turn, primarily sell these products to retailers). We also offer extended service contracts.

The worldwide automotive industry is affected significantly by general economic and political conditions over which we have little control. Vehicles are durable goods, and consumers and businesses have latitude in determining whether and when to replace an existing vehicle. The decision whether to purchase a vehicle may be affected significantly by slowing economic growth, geopolitical events, and other factors (including the cost of purchasing and operating cars, trucks, and utility vehicles, the availability and cost of financing, cost of fuel, and electric vehicle charging availability and cost). As a result, the number of cars, trucks, and utility vehicles sold may vary substantially from year to year. Further, the automotive industry is a highly competitive business that has a wide and growing variety of product and service offerings from a growing number of manufacturers.

Our wholesale unit volumes vary with the level of total industry demand and our share of that industry demand. Our wholesale unit volumes also are influenced by the level of dealer inventory, and our ability to maintain sufficient production levels to support desired dealer inventory in the event of supplier disruptions or other types of disruptions affecting our production. Our share is influenced by how our products are perceived by customers in comparison to those offered by other manufacturers based on many factors, including price, quality, styling, reliability, safety, fuel efficiency, functionality, sustainability, and reputation. Our share also is affected by the timing and frequency of new model introductions. Our ability to satisfy changing consumer and business preferences with respect to type or size of vehicle, as well as design and performance characteristics and the services our vehicles offer, affects our sales and earnings significantly.

As with other manufacturers, the profitability of our business is affected by many factors, including:

• Wholesale unit volumes

• Margin of profit on each vehicle sold - which, in turn, is affected by many factors, such as:

◦Market factors - volume and mix of vehicles and options sold, and net pricing (reflecting, among other factors, incentive programs)

◦Costs of components and raw materials necessary for production of vehicles

◦Costs for customer warranty claims and additional service actions

◦Costs for safety, emissions, and fuel economy technology and equipment

• A high proportion of relatively fixed structural costs, so that small changes in wholesale unit volumes can significantly affect overall profitability

Although supply disruptions have resulted in a higher level of new vehicle prices, our industry has historically had a very competitive pricing environment, driven in part by excess capacity. For the past several decades, manufacturers typically have offered price discounts and other marketing incentives to provide value for customers and maintain market share and production levels, and we saw some of these actions resume as industry production and inventories improved in recent quarters. The decline in value of foreign currencies can also contribute significantly to competitive pressures in many of our markets.

Competitive Position. The worldwide automotive industry consists of many producers, with no single dominant producer. Certain manufacturers, however, account for the major percentage of total sales within particular countries, especially their countries of origin.

Seasonality. We manage our vehicle production schedule based on a number of factors, including retail sales (i.e., units sold by our dealerships to their customers at retail) and dealer stock levels (i.e., the number of units held in inventory by our dealerships for sale to their customers). Historically, we have experienced some seasonal fluctuation in the business, with production in many markets tending to be higher in the first half of the year to meet demand in the spring and summer (typically the strongest sales months of the year); however, that may not be the case in a particular year depending on the circumstances, e.g., if we have a higher number of vehicle launches (particularly for our higher volume vehicles) in the first half of the year, we would expect production in the second half of the year to be higher.

Item 1. Business (Continued)

Raw Materials. We purchase a wide variety of raw materials from numerous suppliers around the world for use in the production of, and development of technologies in, our vehicles. These materials include base metals (e.g., steel and aluminum), precious metals (e.g., palladium), energy (e.g., natural gas), and plastics/resins (e.g., polypropylene). As we transition to a greater mix of electric vehicles, we expect to increase our reliance on lithium, cobalt, and nickel, among other materials, for batteries. We expect to have adequate supplies or sources of availability of raw materials necessary to meet our needs; however, there always are risks and uncertainties with respect to the supply of raw materials that could impact availability in sufficient quantities and at cost effective prices to meet our needs. See “Item 1A. Risk Factors” for a discussion of the risks associated with a shortage of components or raw materials, supplier disruptions, and inflationary pressures, the “Key Trends and Economic Factors Affecting Ford and the Automotive Industry” section of Item 7 for a discussion of commodity and energy price changes, and “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” (“Item 7A”) for a discussion of commodity price risks.

Intellectual Property. We own or hold licenses to use numerous patents, trade secrets, copyrights, and trademarks on a global basis. We expect to continue building this portfolio as we actively pursue innovation in every part of our business. We also own numerous trademarks and service marks that contribute to the identity and recognition of our Company and its products and services globally. While our intellectual property rights in the aggregate are important to the operation of each of our businesses, we do not believe that our business would be materially affected by the expiration of any particular intellectual property right or termination of any particular intellectual property agreement.

Warranty Coverage, Field Service Actions, and Customer Satisfaction Actions. We provide warranties on vehicles we sell. Warranties are offered for specific periods of time and/or mileage and vary depending upon the type of product and the geographic location of its sale. Pursuant to these warranties, we will repair, replace, or adjust parts on a vehicle that are defective in factory-supplied materials or workmanship during the specified warranty period. In addition to the costs associated with this warranty coverage provided on our vehicles, we also incur costs as a result of field service actions (i.e., safety recalls, emission recalls, and other product campaigns) and for customer satisfaction actions. Software updates are increasingly a component of vehicle service and may be performed during warranty coverage repairs, through field service actions, or through over-the-air updates.

For additional information regarding warranty and related costs, see “Critical Accounting Estimates” in Item 7 and Note 24 of the Notes to the Financial Statements.

Wholesales

Wholesales consist primarily of vehicles sold to dealerships. For the majority of such sales, we recognize revenue when we ship the vehicles to our dealerships from our manufacturing facilities. See Item 7 for additional discussion of revenue recognition practices. Wholesales in certain key markets during the past three years were as follows:

			Wholesales (a)
			(in thousands of units)
			2022						2023						2024
United States			2,012						2,097						2,200
China (b)			495						467						442
Canada			258						260						269
United Kingdom			263						243						242
Germany			182						162						155
Türkiye			85						124						114
Italy			107						122						109
Australia (c)			71						89						104
France			90						104						78
Other Markets			668						745						757
Total Company			4,231						4,413						4,470

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(a)Wholesale unit volumes include sales of medium and heavy trucks. Wholesale unit volumes also include all Ford and Lincoln badged units (whether produced by Ford or by an unconsolidated affiliate) that are sold to dealerships or others, units manufactured by Ford that are sold to other manufacturers, units distributed by Ford for other manufacturers, local brand units produced by our unconsolidated Chinese joint venture Jiangling Motors Corporation, Ltd. (“JMC”) that are sold to dealerships or others, and Ford badged vehicles produced in Taiwan by Lio Ho Group. Vehicles sold to daily rental car companies that are subject to a guaranteed repurchase option (i.e., rental repurchase), as well as other sales of finished vehicles for which the recognition of revenue is deferred (e.g., consignments), also are included in wholesale unit volumes. Revenue from certain vehicles in wholesale unit volumes (specifically, Ford badged vehicles produced and distributed by our unconsolidated affiliates, as well as JMC brand vehicles) are not included in our revenue.

(b)China includes Taiwan.

(c)Not previously presented.

Item 1. Business (Continued)

Sales, Industry Volume, and Market Share

Sales, industry volume, and market share in certain key markets during the past three years were as follows:

			Sales (a)																		Industry Volume (b)																		Market Share (c)
			(in millions of units)																		(in millions of units)																		(as a percentage)
			2022						2023						2024						2022						2023						2024						2022						2023						2024
United States			1.9						2.0						2.1						14.2						16.1						16.4						13.1		%				12.4		%				12.6		%
China (d)			0.5						0.5						0.4						23.9						25.1						27.1						2.1						1.8						1.6
Canada			0.2						0.2						0.3						1.6						1.8						1.9						15.2						13.7						14.7
United Kingdom			0.2						0.2						0.2						1.9						2.3						2.4						12.1						10.8						9.6
Germany			0.2						0.2						0.2						3.0						3.2						3.2						5.7						5.1						5.0
Türkiye			0.1						0.1						0.1						0.8						1.3						1.3						10.5						8.9						8.8
Italy			0.1						0.1						0.1						1.5						1.8						1.8						6.4						6.1						5.8
Australia (e)			0.1						0.1						0.1						1.1						1.2						1.2						6.2						7.2						8.2
France			0.1						0.1						0.1						2.0						2.3						2.2						3.9						3.9						3.5

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(a)Represents primarily sales by dealers, sales to the government, and leases to Ford management, and is based, in part, on estimated vehicle registrations; includes medium and heavy trucks.

(b)Industry volume is an internal estimate based on publicly available data collected from various government, private, and public sources around the globe; includes medium and heavy trucks.

(c)Market share represents reported retail sales of our brands as a percent of total industry volume in the relevant market or region.

(d)China includes Taiwan; China market share includes Ford brand and JMC brand vehicles produced and sold by our unconsolidated affiliates.

(e)Not previously presented.

U.S. Sales by Type

The following table shows U.S. sales volume and U.S. wholesales (consisting primarily of vehicles sold to dealerships) segregated by electric, hybrid, and internal combustion vehicles. U.S. sales volume represents primarily sales by dealers, sales to the government, and leases to Ford management, and is based, in part, on estimated vehicle registrations and includes medium and heavy trucks.

			U.S. Sales												U.S. Wholesales
			2023						2024						2023						2024
Electric Vehicles			72,608						97,865						99,928						68,990
Hybrid Vehicles			133,743						187,426						146,249						215,735
Internal Combustion Vehicles			1,789,561						1,793,541						1,850,448						1,914,862
Total Vehicles			1,995,912						2,078,832						2,096,625						2,199,587

FORD NEXT SEGMENT

In 2024, the Ford Next segment primarily included expenses and investments for emerging business initiatives aimed at creating value for Ford in vehicle-adjacent market segments. As of January 1, 2025, Ford Next is no longer a reportable segment, and those expenses and investments are now reflected in either the reportable segments that benefit from those expenses and investments or Corporate Other.

Item 1. Business (Continued)

FORD CREDIT SEGMENT

The Ford Credit segment is comprised of the Ford Credit business on a consolidated basis, which is primarily vehicle-related financing and leasing activities.

Ford Credit offers a wide variety of automotive financing products to and through automotive dealers throughout the world. The predominant share of Ford Credit’s business consists of financing our vehicles and supporting our dealers. Ford Credit earns its revenue primarily from payments made under retail installment sale and finance lease (retail financing) and operating lease contracts that it originates and purchases; interest rate supplements and other support payments from us and our affiliates; and payments made under dealer financing programs.

As a result of these financing activities, Ford Credit has a large portfolio of finance receivables and operating leases which it classifies into two portfolios —“consumer” and “non-consumer.” Finance receivables and operating leases in the consumer portfolio include products offered to individuals and businesses that finance the acquisition of our vehicles from dealers for personal and commercial use. Retail financing includes retail installment sale contracts for new and used vehicles and finance leases (comprised of sales-type and direct financing leases) for new vehicles to retail and commercial customers, including leasing companies, government entities, daily rental companies, and fleet customers. Finance receivables in the non-consumer portfolio include products offered to automotive dealers. Ford Credit makes wholesale loans to dealers to finance the purchase of vehicle inventory, also known as floorplan financing, as well as loans to dealers to finance working capital and improvements to dealership facilities, finance the purchase of dealership real estate, and finance other dealer vehicle programs. Ford Credit also purchases receivables generated by us and our affiliates, primarily related to the sale of parts and accessories to dealers and certain used vehicles from daily rental fleet companies. Ford Credit also provides financing to us for vehicles that we lease to our employees.

The majority of Ford Credit’s business is in the United States and Canada. Outside of the United States, Europe is Ford Credit’s largest operation. Ford Credit’s European operations are managed primarily through its United Kingdom-based subsidiary, FCE Bank plc (“FCE”), and its Germany-based subsidiary, Ford Bank GmbH (“Ford Bank”). Within Europe, Ford Credit’s largest markets are the United Kingdom and Germany.

See Item 7 and Notes 10 and 12 of the Notes to the Financial Statements for a detailed discussion of Ford Credit’s receivables, credit losses, allowance for credit losses, loss-to-receivables ratios, funding sources, and funding strategies. See Item 7A for a discussion of how Ford Credit manages its financial market risks.

We routinely sponsor special retail financing and lease incentives to dealers’ customers who choose to finance or lease our vehicles from Ford Credit. In order to compensate Ford Credit for the lower interest or lease payments offered to the retail customer, we pay the discounted value of the incentive directly to Ford Credit when it originates the retail finance or lease contract with the dealer’s customer. These programs increase Ford Credit’s financing volume and share. See Note 2 of the Notes to the Financial Statements for information about our accounting for these programs.

We have a Third Amended and Restated Relationship Agreement with Ford Credit, pursuant to which, if Ford Credit’s financial statement leverage for a calendar quarter were to be higher than 12.5:1 (as reported in its most recent periodic report), Ford Credit could require us to make or cause to be made a capital contribution to it in an amount sufficient to have caused such financial statement leverage to have been 12.5:1. No capital contributions have been made pursuant to this agreement. In a separate agreement with FCE, Ford Credit has agreed to maintain FCE’s net worth in excess of $500 million. No payments have been made pursuant to that agreement.

Ford Credit files periodic reports with the SEC that contain additional information regarding Ford Credit. The reports are available through Ford Credit’s website located at www.ford.com/finance/investor-center and can also be found on the SEC’s website located at www.sec.gov.

The foregoing information regarding Ford Credit’s website and its content is for convenience only and not deemed to be incorporated by reference into this Report nor filed with the SEC.

Item 1. Business (Continued)

CORPORATE OTHER

Corporate Other primarily includes corporate governance expenses, past service pension and other postretirement employee benefits (“OPEB”) income and expense, interest income (excluding Ford Credit interest income and interest earned on our extended service contract portfolio) and gains and losses from our cash, cash equivalents, and marketable securities (excluding gains and losses on investments in equity securities), and foreign exchange derivatives gains and losses associated with intercompany lending. Corporate governance expenses are primarily administrative, delivering benefit on behalf of the global enterprise, that are not allocated to operating segments. These include expenses related to setting and directing global policy, providing oversight and stewardship, and promoting the Company’s interests. Corporate Other assets include: cash, cash equivalents and marketable securities, tax related assets, defined benefit pension plan net assets, and other assets managed centrally.

INTEREST ON DEBT

Interest on Debt consists of interest expense on Company debt excluding Ford Credit.

GOVERNMENTAL STANDARDS

Many governmental standards and regulations relating to safety, fuel economy, air pollution emissions control, noise control, vehicle recycling, substances of concern, vehicle damage, and theft prevention are applicable to new motor vehicles, engines, and equipment. In addition, manufacturing and other automotive assembly facilities are subject to stringent standards regulating air emissions, water discharges, and the handling and disposal of hazardous substances. The most significant of the standards and regulations affecting us are discussed below:

U.S. Vehicle Emissions Standards and Fuel Economy

Federal and California Emissions Standards. Both the U.S. Environmental Protection Agency (“EPA”) and the California Air Resources Board (“CARB”) have motor vehicle tailpipe and evaporative emissions standards that become increasingly stringent over time. In addition to regulating emissions of certain pollutants—known as “criteria pollutants”—for which EPA has adopted ambient health-based standards (e.g., oxides of nitrogen), EPA and CARB also regulate greenhouse gases (“GHGs”) from vehicles (e.g., carbon dioxide). EPA and CARB also require: that vehicles and engines are durable enough to meet emissions standards for prescribed amounts of time; that vehicles and engines be equipped with on-board diagnostic (“OBD”) systems that monitor emissions-related systems and components; and that manufacturers offer and honor warranties on certain emissions-related components. Vehicles and engines must be certified by EPA prior to sale in the United States and by CARB prior to sale in California and those states that have adopted California’s standards.

Manufacturers generally demonstrate compliance with emissions standards on a fleet-wide, production-volume-weighted basis, and over time through a system based on credits. Manufacturers may generate credits insofar as their products emit less than the emissions standards, and may incur and carry credit deficits for a limited amount of time insofar as their products emit more than the emissions standards. Under certain circumstances, manufacturers may sell credits to other manufacturers, who may then use the purchased credits to cure a deficit. If a manufacturer fails to comply with applicable emissions standards, even after considering its ability to carry deficits and use credits, then EPA and CARB may take various actions, including withholding approvals to sell new vehicles and engines and/or enforcement actions for civil penalties and injunctive relief.

For light-duty cars and trucks, EPA and CARB each maintain emissions standards for both criteria pollutants and GHGs. In 2021, EPA promulgated emissions standards for GHGs for the 2023 through 2026 model years, and then in 2024 promulgated emission standards for criteria pollutants and GHGs for the 2027 through 2032 model years. Both sets of standards are subject to pending legal challenges. CARB also has emissions standards for criteria pollutants and GHGs in place through the 2025 model year. In 2022, CARB promulgated emissions standards for criteria pollutants for the 2026 through 2035 model years. Currently, CARB is considering adopting emissions standards for GHGs for future model years. These EPA and CARB standards also include updates to durability, warranty, and OBD requirements.

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For heavy-duty vehicles and engines, EPA maintains emissions standards for criteria emissions and GHGs. In 2022, EPA promulgated emissions standards for criteria emissions for 2027 and beyond. In 2024, EPA promulgated emissions standards for GHGs for the 2027 through 2032 model years, and these GHG standards are subject to pending legal challenges. CARB also has emissions standards for criteria pollutants and GHGs. CARB has adopted emissions standards for criteria pollutants for 2024 and later model years. CARB has also adopted emissions standards for GHGs for 2027 and beyond. These EPA and CARB standards also include updates to durability, warranty, and OBD requirements.

Seventeen states (referenced as “opt-in” states) have adopted CARB’s light-duty emissions standards, and nine opt-in states have adopted California’s heavy-duty emissions standards. The list of opt-in states changes over time, based on the legislative, executive, and regulatory actions by each individual state.

California ZEV Requirements. California requires manufacturers to produce and deliver for sale zero-emission vehicles (“ZEVs”), which include electric vehicles. This is in addition to the emissions standards outlined above. California’s regulations, which use a system based on credits (whether generated by us or purchased from another manufacturer) that can be banked and carried forward, require annual percentage increases in the production and sale of ZEVs. For light-duty vehicles, in the 2025 model year, CARB regulations require that approximately 22% of a manufacturer’s California light-duty vehicle sales volume be ZEVs. In the 2026 model year, this grows to 35%, and the requirements continue to grow each year, rising to 100% by the 2035 model year. For heavy-duty vehicles, CARB regulations likewise require year-over-year increases in the percentage of a manufacturer’s California sales volume that must be ZEVs, with current percentages in the single digits growing to well over 50% by 2035.

Sixteen opt-in states have adopted California’s ZEV requirements for light-duty vehicles, and 10 opt-in states have adopted California’s ZEV requirements for heavy-duty vehicles. The list of opt-in states changes over time, based on the legislative, executive, and regulatory actions by each individual state.

California Waivers of Clean Air Act Preemption. The federal Clean Air Act preempts states from establishing their own standards, except the Act provides that the EPA shall waive that preemption and thereby allow California to establish its own standards if, among other requirements, those standards will be at least as protective of public health and welfare as federal standards.

For decades, California has requested, and EPA has granted, waivers to allow California to implement emissions standards (and, likewise, allow opt-in states to implement those same standards within their borders). In some cases, EPA withheld approval of waivers. In 2019, during the first Trump administration, in an unprecedented move, the EPA rescinded a previously granted waiver (for California’s emissions standards for GHGs through the 2025 model year). Then, in 2022, during the Biden administration, the EPA reinstated that waiver, allowing California to enforce the relevant standards as though the waiver was never rescinded. These actions reflect policy differences between subsequent presidential administrations and remain the subject of ongoing legal challenges. Such rescissions and reinstatements, and pending and future legal challenges concerning California’s authority, create significant uncertainty for regulated manufacturers about the need to comply with California and opt-in state requirements.

To manage the uncertainty from the 2019 waiver rescission, pending legal challenges, and other considerations, Ford reached an agreement with California and opt-in states on a set of terms for an alternative framework in which Ford committed to meet a designated set of GHG standards on a national basis for the 2021 through 2026 model years that were more stringent than the then-rolled back federal standards in lieu of the California regulatory program. This framework enabled Ford to continue its product planning on a nationwide basis. EPA’s emissions standards for GHGs, as finalized in 2021 and currently in place through the 2026 model year, get stricter over time and become more stringent than this California framework agreement. Such framework agreements are a possibility for manufacturers to manage similar uncertainty in the future.

EPA has issued waivers for the emissions standards and ZEV requirements outlined above. The incoming administration has stated an intent to rescind one or more of these waivers.

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Federal Fuel Economy Requirements. The National Highway Traffic Safety Administration (“NHTSA”) requires that light-duty vehicles meet minimum corporate average fuel economy (“CAFE”) standards, and that certain heavy-duty vehicles meet fuel efficiency standards. For CAFE standards, NHTSA establishes separate standards applicable to three subsets of manufacturers’ products: domestic passenger cars, imported passenger cars, and light-duty trucks. In 2022, NHTSA promulgated fuel economy standards for the 2024 through 2026 model years. In 2024, NHTSA promulgated fuel economy standards for light-duty vehicles for the 2027 through 2031 model years, as well as standards for heavy-duty pickup trucks and vans for the 2030 through 2035 model years. These recently finalized standards are the subject of ongoing legal challenges. Manufacturers are subject to pre-determined civil penalties if they fail to meet fuel economy standards in any model year, after taking into account all available credits for the preceding five model years and expected credits for the three succeeding model years.

Alignment and Misalignment of Standards. Because the vast majority of GHGs emitted by a vehicle are the result of fuel combustion, GHG emissions correspond closely with fuel economy. Before approximately the 2020 model year, NHTSA and EPA aligned their standards, and California agreed that compliance with the federal program would satisfy compliance with its own GHG requirements, thereby avoiding a patchwork of federal and state standards. Since approximately the 2021 model year, EPA and NHTSA have independently promulgated GHG and fuel economy standards, and while they generally avoided material inconsistencies between the standards, they nonetheless created complexity and redundancy for manufacturers that must meet both sets of standards. Also since approximately the 2021 model year, California and opt-in states have maintained emissions standards and ZEV requirements, outlined above, which are not aligned with and are generally more stringent than the federal requirements and are outside the scope of the existing framework agreement with California described above.

Implications for Ford. The requirements for light-duty vehicles outlined above apply to most cars, sport utility vehicles, and light-duty pickup trucks that Ford sells in the United States. The requirements for heavy-duty vehicles and engines outlined above apply to most heavy-duty pickup trucks, vans, cab-chassis products, and vocational vehicles that Ford sells in the United States. Ford is subject to each separate regulatory regime, and in general, this means separate compliance measures for each regulator and for each regulated pollutant and performance standard. EPA, NHTSA, and CARB have requirements that govern the same aspects of the same products at the same time, as outlined above. Different standards pose additional compliance burdens, including complexity and costs, and these burdens are heightened when these various requirements are misaligned or change, e.g., when there is a change in administration or as a result of a legal challenge.

Compliance with emissions standards, ZEV requirements, fuel economy standards, OBD requirements, emissions warranty requirements, and related regulations can be challenging and can drive increased product development costs, production costs, higher retail prices, warranty costs, and vehicle recalls. Compliance depends in part on the widespread availability of high-quality and consistent automotive fuels that internal combustion vehicles are designed to use. Insofar as regulatory requirements get increasingly stringent, manufacturers must comply by increasing their sales of electric vehicles and other ZEVs, as a portion of overall sales. This is directly required by California’s ZEV requirements, but is also required to comply with the emissions and fuel economy standards described above, which are not achievable solely through sales of internal combustion engines with today’s technology. Sales of electric vehicles continue to grow, however there are factors limiting faster and future growth including: supportive public policy; consumer acceptance and understanding of electric vehicles; upfront costs; technology cost and readiness; battery raw material availability and cost; and the availability of adequate infrastructure to support vehicle charging.

Stringent requirements that are misaligned with market conditions could force Ford to take various product-led actions that could have substantial adverse effects on its sales volumes and operations. Such actions could include: restricting offerings of certain products and popular options; taking actions to increase sales of Ford’s lowest-emitting and most fuel-efficient vehicles; and curtailing the production and sale of certain internal combustion vehicles. For example, in those opt-in states that have adopted California’s ZEV requirements for light-duty vehicles, industrywide sales of ZEVs are growing but generally are not on track to meet the ZEV requirements as early as the 2026 model year, and product-led actions may be necessary to ensure compliance.