Ford Motor Company (NYSE:F) Q4 2022 Earnings Call Transcript

James Picariello: Okay. Understood. That’s helpful. And then in terms of the earnings bridge for this year, with respect to materials and freight, that $9 billion headwind in ’22. I know you mentioned you’re baking in commodity prices to come down. But all in relative to that $9 billion this past year, what’s assumed in the ’23 guide here on this line item?

John Lawler: Right. So if you look at that, it’s at least $2.5 billion depending on where we fall within the range of the guidance. So I think that would be a start point, and then we would go from there. And of course, we’re going to be working to do better than that. But that’s what we see so far.

James Picariello: At least $2.5 billion positive.

John Lawler: Yes.

Operator: Our last question comes from Itay Michaeli from Citi. Please go ahead.

Itay Michaeli: Just two questions for me. First, I was hoping you could maybe talk about the regional outlook in your 2023 guidance. I don’t know that the segments are about to change but hoping we touch on the regions. And then second, maybe for Jim. When we’re thinking about the software opportunity on your new electrical architecture on the consumer side of the business, where do you see the biggest opportunity there from a revenue perspective? Is it automated driving? Is it connected services? Just curious what is most interesting there?

John Lawler: Yes. So I think what we would have to say is that given that we’re moving to our segments for 2023, we’re not going to be reporting the regions. And so we will give more color on 2023 by each of the business unit segments. And so I’m not going to comment on regions anymore going forward, unless there’s a specific reason to do that within one of the segments.

Jim Farley: I think on the demand side, we see the U.S. around the $15 million range, Europe around $13 million. We’re going to see more incentives in the U.S. So we can go through the demand side if that’s what you’re interested in.

Itay Michaeli: Yes, sure. That would be helpful. Yes. Maybe pricing in Europe would be helpful as well.

John Lawler: Yes. I think in Europe, we’re going to see continued pressure on the top line. We’ve got a 13 million unit in the industry. We think we still have such a strong order bank. We not think we know we have a strong order bank on our commercial vehicles that we don’t see as much pressure there. More of the pressure will come on the passenger side. But pricing in Europe, incentives continue to be strong throughout this year. So I don’t think you’ll see as much price compression in Europe, as you’ve seen in — you’ll see in North America and the U.S. But I think definitely for Europe, it’s the call on the industry and where do we think that will be offset by the strength of the order bank we have on our commercial vehicles.