Ford Motor Company

“Unlike our standard arrangements with suppliers, under multi-year offtake agreements and other long-term purchase contracts, the risks associated with lower-than-expected electrified vehicle production volumes or changes in battery technology that reduce the need for certain raw materials, batteries, or their components are borne by Ford rather than our suppliers. In the event we do not purchase the materials or components pursuant to the terms of these agreements, we may nevertheless be obligated to pay the purchase price or otherwise compensate the supplier in an amount determined by the contract or reimburse the supplier for costs or losses it incurs.”

Annual report 2025A · The company itself

“For the manufacture of our electrified products, we are dependent on the supply of batteries and the raw materials (e.g., lithium, cobalt, and nickel) used by our suppliers to produce those batteries. Some of these resources are limited, and, as a result, we may be unable to acquire raw materials needed for our products in sufficient amounts that are responsibly sourced or at reasonable prices.”

Annual report 2025A · The company itself

“As a result of the competition for and limited availability of the raw materials needed for our electrified vehicle business, the costs of such materials are difficult to accurately forecast as they may fluctuate during the term of the offtake agreements and other long-term purchase contracts based on market conditions. Accordingly, we may be subject to increases in the prices we pay for those raw materials, and our ability to recoup such costs through increased pricing to our customers may be limited.”

Annual report 2025A · The company itself

“Battery costs remain high, which is detrimental to EVs reaching pricing parity with ICE vehicles and further exacerbates the pricing pressures on EVs.”

Annual report 2025A · The company itself

“Commodity price risk is the possibility that our financial results could be worse than planned because of changes in the prices of commodities used in the manufacture of our products, such as base metals (e.g., steel, copper, and aluminum), precious metals (e.g., palladium), energy (e.g., natural gas and electricity), plastics/resins (e.g., polypropylene), and battery raw materials (e.g., lithium, cobalt, and nickel).”

Annual report 2025A · The company itself

“Our ability to manufacture electrified products is dependent upon the availability of raw materials and other components necessary for the production of batteries, e.g., lithium, cobalt, nickel. As described in the Liquidity and Capital Resources section in Item 7 below, and elsewhere herein, to facilitate our access to such raw materials, we have entered into and we may, in the future, enter into offtake agreements and other long-term purchase contracts.”

Annual report 2025A · The company itself

“For example, the new battery energy storage business we announced in the fourth quarter of 2025 or our efforts to evaluate and implement alternative distribution models and channels for our products and services from those we have traditionally used may be challenged or may not succeed or be as successful as our historical arrangements.”

Annual report 2025A · The company itself

“As a manufacturer that intends to engage in large-scale production of batteries in the United States for vehicles and energy storage, this tax credit influences our decisions concerning the location, scale, supply chain, and operations of our domestic battery manufacturing business.”

Annual report 2025A · The company itself

“For example, we have taken, and may in the future take, such actions to better match the pace of EV adoption, which has been lower than anticipated industrywide.”

Annual report 2025A · The company itself

“Our plans continue to include offering electrified versions of many of our vehicles as well as solely electric nameplates, although we have observed lower than initially anticipated industrywide EV adoption rates. Low EV adoption rates may persist, including as a result of the regulatory framework in various markets shifting away from supporting the adoption of electrified vehicles (as was the case in the United States in 2025); any negative perception of our electrified vehicles or EVs in general; an inability to or delay in developing or embracing new technologies or processes; or shifts in consumer preference.”

Annual report 2025A · The company itself

“To date, we have observed lower-than-anticipated industrywide EV adoption rates due to changes in consumer sentiment, competitive dynamics, legal and policy changes, and significant developments in vehicle pricing dynamics, among other factors that we continue to monitor. This environment has led us, and may in the future lead us, to adjust our investments, spending, production, and product and future technology launches to better match the pace of EV adoption.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“As of December 31, 2025, our outstanding purchase obligations under our compliance credit purchase agreements totaled about $1.6 billion.”

Annual report 2025A · The company itself

“Our strategy involves providing customers freedom of choice to select the powertrain that best suits their needs and maintaining manufacturing flexibility at Ford to meet shifting customer demand.”

Annual report 2025A · The company itself

“Furthermore, given our existing and continued investment in battery production, if we are unable to operate battery facilities at their expected capacity because EV adoption rates or the demand for such batteries is lower-than-anticipated or otherwise, we may be unable to recoup our investments.”

Annual report 2025A · The company itself

“In addition, instability in the supply chain exacerbated by tariffs and other industry concerns, such as China’s restriction on the export of rare earth minerals and various components, has resulted in production disruptions and increased costs and heightens the risk of future production disruptions and further cost increases.”

Annual report 2025A · The company itself

“For the manufacture of our electrified products, we are dependent on the supply of batteries and the raw materials (e.g., lithium, cobalt, and nickel) used by our suppliers to produce those batteries. Some of these resources are limited, and, as a result, we may be unable to acquire raw materials needed for our products in sufficient amounts that are responsibly sourced or at reasonable prices.”

Annual report 2025A · The company itself

“For example, China’s restriction on the export of rare earth minerals, which we and our suppliers utilize for a number of components, has impacted (e.g., rescheduling production, changing operating patterns) and caused disruptions in our production operations, increases the risk of future production disruptions, and has increased and may further increase costs (e.g., premium freight and expedited shipping costs to make up for delays in component availability).”

Annual report 2025A · The company itself

“As a result of the competition for and limited availability of the raw materials needed for our electrified vehicle business, the costs of such materials are difficult to accurately forecast as they may fluctuate during the term of the offtake agreements and other long-term purchase contracts based on market conditions. Accordingly, we may be subject to increases in the prices we pay for those raw materials, and our ability to recoup such costs through increased pricing to our customers may be limited.”

Annual report 2025A · The company itself

“As described in the Liquidity and Capital Resources section in Item 7 below, and elsewhere herein, we have entered into and we may, in the future, enter into offtake agreements and other long-term purchase contracts that obligate us, subject to certain conditions such as quality or minimum output, to purchase a certain percentage or minimum amount of output from certain raw materials suppliers. In the event the supplier under those agreements or any of our or our suppliers’ raw material supply contracts is unable to deliver sufficient quantities of raw materials needed for our or our suppliers’ production operations, e.g., if a mine does not produce at expected levels, or the raw materials do not otherwise satisfy our requirements, and we or our suppliers are unable to find an alternative resource that satisfies our technical requirements and with sufficient quantities, at reasonable prices, responsibly sourced, and in a timely manner, it could impact our ability to manufacture products.”

Annual report 2025A · The company itself

“This is directly required by California’s ZEV requirements, insofar as those requirements are not preempted by the 2025 federal legislation described above, but is also required to comply with the emissions and fuel economy standards promulgated in recent years, which are not achievable solely through sales of internal combustion engines with today’s technology. There are factors limiting faster and future growth of EV sales, including: supportive public policy; consumer acceptance and understanding of EVs; upfront costs; technology cost and readiness; battery raw material availability and cost; and the availability of adequate infrastructure to support vehicle charging.”

Annual report 2025A · The company itself

“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”), including extended range electric vehicles (“EREVs”), 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.”

Annual report 2025A · The company itself

“Wholesales 2024 2025 2024 2025 Electric Vehicles 97,865 84,113 68,990 82,530 Hybrid Vehicles 187,426 228,072 215,735 216,599 Internal Combustion Vehicles 1,793,541 1,891,939 1,914,862 1,805,372 Total Vehicles 2,078,832 2,204,124 2,199,587 2,104,501 5 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.”

Annual report 2025A · The company itself

“Our plans continue to include offering electrified versions of many of our vehicles as well as solely electric nameplates, although we have observed lower than initially anticipated industrywide EV adoption rates. Low EV adoption rates may persist, including as a result of the regulatory framework in various markets shifting away from supporting the adoption of electrified vehicles (as was the case in the United States in 2025); any negative perception of our electrified vehicles or EVs in general; an inability to or delay in developing or embracing new technologies or processes; or shifts in consumer preference.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Ford may face increased price competition for its products and services, including pricing pressure resulting from industry excess capacity, currency fluctuations, competitive actions, legal and policy changes, or economic or other factors, particularly for electrified vehicles.”

Annual report 2025A · The company itself

“The global automotive industry is intensely competitive, with installed manufacturing capacity generally exceeding current demand. Historically, industry overcapacity has resulted in many manufacturers offering marketing incentives on vehicles in an attempt to maintain and grow market share; these incentives historically have included a combination of subsidized financing or leasing programs, price rebates and reductions, and other incentives.”

Annual report 2025A · The company itself

“Ford develops and delivers innovative, must-have Ford trucks, sport utility vehicles, commercial vans and cars, and Lincoln luxury vehicles, along with connected services, including BlueCruise (ADAS) and security.”

Annual report 2025A · The company itself

“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”), including extended range electric vehicles (“EREVs”), 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.”

Annual report 2025A · The company itself

“FORD BLUE SEGMENT Ford Blue primarily includes the sale of Ford and Lincoln internal combustion engine (“ICE”) and hybrid (excluding EREVs) 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.”

Annual report 2025A · The company itself

“Ford+ is our plan to thrive at the intersection of great vehicles, iconic brands, and innovative software and service, building Ford into a higher growth, higher margin, more capital efficient, and more durable company.”

Annual report 2025A · The company itself

“Our Ford+ plan is designed to leverage our foundational strengths with enhanced capabilities – enriching customer experiences and deepening loyalty.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“We continue to recruit talent from traditional industries, such as manufacturing and consulting, and have been successful in attracting talent from non-traditional industries, specifically the technology industry. This is important as we build our expertise in growth areas such as software, electrification and adjacent technologies, and integrated services.”

Annual report 2025A · The company itself

“We continue to increase the number of BlueCruise (our hands-free highway driving system) enabled vehicles on the road and its growth and expansion remains an important part of our strategy.”

Annual report 2025A · The company itself

“As we expand our business priorities to include autonomous vehicle technologies and broader mobility products and services, our financial exposure has increased. Similarly, federal and state regulatory requirements are growing as lawmakers and regulators adapt to advancements in automation, ranging from driver-assistance technologies such as automatic braking to fully autonomous vehicles.”

Annual report 2025A · The company itself

“We continue to increase the number of BlueCruise (our hands-free highway driving system) enabled vehicles on the road and its growth and expansion remains an important part of our strategy.”

Annual report 2025A · The company itself

“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 EV charging availability and cost).”

Annual report 2025A · The company itself

“Our strategy involves providing customers freedom of choice to select the powertrain that best suits their needs and maintaining manufacturing flexibility at Ford to meet shifting customer demand.”

Annual report 2025A · The company itself

“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 2024 2025 Ford 8,212 7,479 Ford-Lincoln (combined) 451 408 Lincoln 343 339 Total 9,006 8,226 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.”

Annual report 2025A · The company itself

“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).”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“We continue to recruit talent from traditional industries, such as manufacturing and consulting, and have been successful in attracting talent from non-traditional industries, specifically the technology industry. This is important as we build our expertise in growth areas such as software, electrification and adjacent technologies, and integrated services.”

Annual report 2025A · The company itself

“We have invested in, formed strategic alliances or entered into commercial relationships with, and announced or formed joint ventures with a number of companies, and we may expand those relationships or enter into similar relationships with additional companies.”

Annual report 2025A · The company itself

“A growing part of our business involves connectivity, digital and physical services, and integrated software services, and we are devoting significant resources to develop this business. Further, we have announced our plans and expectations for integrated services to become a larger portion of our revenue and earnings by offering new and differentiated products, retaining existing subscribers, and growing subscription rates with new customers.”

Annual report 2025A · The company itself

“A growing part of our business involves connectivity, digital and physical services, and integrated software services, and we are devoting significant resources to develop this business. Further, we have announced our plans and expectations for integrated services to become a larger portion of our revenue and earnings by offering new and differentiated products, retaining existing subscribers, and growing subscription rates with new customers.”

Annual report 2025A · The company itself

“For example, the new battery energy storage business we announced in the fourth quarter of 2025 or our efforts to evaluate and implement alternative distribution models and channels for our products and services from those we have traditionally used may be challenged or may not succeed or be as successful as our historical arrangements.”

Annual report 2025A · The company itself

“Rapid policy change in our home market, the United States, is creating uncertainty in our operations and business outlook, and may remain a source of volatility in the future.”

Annual report 2025A · The company itself

“As described elsewhere herein, global political instability and volatility in government regulations and unpredictable trade policy (including tariffs) in the United States and around the world limit our ability to conduct effective long-term planning and make capital allocation decisions.”

Annual report 2025A · The company itself

“If there is a shortage of a key component in our supply chain or a supplier is unable to deliver a component to us in accordance with our specifications and at the cost contracted for, because of a production issue, a disruption at a supplier’s facility (e.g., fire, explosion, equipment failure, or natural disaster), limited availability of materials, shipping problems, restrictions on transactions with certain countries or companies, implementation of tariffs, or other reason, and the component cannot be easily sourced from a different supplier, or we are unable to obtain a component on a timely basis, the shortage may disrupt our operations or increase our costs of production and our ability to recoup lost production volume may be limited.”

Annual report 2025A · The company itself

“Unprecedented trade policy (including tariffs) in the United States and foreign governments’ reactions limit our ability to conduct effective long-term planning and make capital allocation decisions. The continued strain in U.S.-China relations presents unique risks to U.S. automakers, as does China’s unique regulatory landscape, the level of integration with key components in our global supply chain, the limited availability of various components and materials (including certain rare earth minerals and related products from China), and the rapid development of the Chinese EV industry, with Chinese electrified vehicle manufacturers exporting their products to some key markets in which we operate.”

Annual report 2025A · The company itself

“Steps taken by governments to implement local content requirements, restrict export and import activities, or apply or consider applying additional or new tariffs on automobiles, parts, and other products and materials have disrupted supply chains, imposed additional costs on our business, and led to other countries attempting to retaliate by imposing tariffs or other barriers, which make our products more expensive for customers, and, in turn, our products less competitive, and this trend may continue.”

Annual report 2025A · The company itself

“In addition, instability in the supply chain exacerbated by tariffs and other industry concerns, such as China’s restriction on the export of rare earth minerals and various components, has resulted in production disruptions and increased costs and heightens the risk of future production disruptions and further cost increases.”

Annual report 2025A · The company itself

“In 2023, the EU adopted the Carbon Border Adjustment Mechanism (“CBAM”), which will subject certain imported materials (such as iron, steel, and aluminum) to a carbon levy linked to the carbon price payable on domestic goods under the European Trading Scheme. The EU CBAM is expected to increase our costs of importing such materials from 2026 onwards and/or limit our ability to import lower cost materials from non-EU countries.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“For example, in 2025, our production was disrupted by fires at one of our major aluminum suppliers, the effects of which are ongoing.”

Annual report 2025A · The company itself

“As a result, significant changes in commodity and energy prices, foreign currency exchange rates, or interest rates as well as increased material, freight, logistics, and similar costs could have a substantial adverse effect on our financial condition or results of operations.”

Annual report 2025A · The company itself

“Commodity price risk is the possibility that our financial results could be worse than planned because of changes in the prices of commodities used in the manufacture of our products, such as base metals (e.g., steel, copper, and aluminum), precious metals (e.g., palladium), energy (e.g., natural gas and electricity), plastics/resins (e.g., polypropylene), and battery raw materials (e.g., lithium, cobalt, and nickel).”

Annual report 2025A · The company itself

“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 EV charging availability and cost).”

Annual report 2025A · The company itself

“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 increased in recent quarters, especially with waning policy support for EVs leading to excess supply in that market segment.”

Annual report 2025A · The company itself

“Because customers’ preferences may change quickly, our new and existing products may not generate sales in sufficient quantities and at costs low enough to be profitable and recoup investment costs. Offering products and services that customers want and value can mitigate the risks of increasing price competition, price sensitive customers, and declining demand, but products and services that are perceived to be less desirable (whether in terms of price, quality, styling, safety, overall value, fuel efficiency, or other attributes) can exacerbate these risks.”

Annual report 2025A · The company itself

“Ford may face increased price competition for its products and services, including pricing pressure resulting from industry excess capacity, currency fluctuations, competitive actions, legal and policy changes, or economic or other factors, particularly for electrified vehicles.”

Annual report 2025A · The company itself

“Ford’s results are dependent on sales of larger, more profitable vehicles, particularly in the United States. A shift in consumer preferences away from larger, more profitable vehicles with internal combustion engines (including trucks and utilities) to other vehicles in our portfolio that may be less profitable could result in an adverse effect on our financial condition or results of operations.”

Annual report 2025A · The company itself

“Rapid policy change in our home market, the United States, is creating uncertainty in our operations and business outlook, and may remain a source of volatility in the future.”

Annual report 2025A · The company itself

“As described elsewhere herein, global political instability and volatility in government regulations and unpredictable trade policy (including tariffs) in the United States and around the world limit our ability to conduct effective long-term planning and make capital allocation decisions.”

Annual report 2025A · The company itself

“For example, our business and strategy are susceptible to tensions in U.S.-China relations and the rapid development of the Chinese electrified vehicle industry, with domestic Chinese producers exporting to some key markets in which we operate.”

Annual report 2025A · The company itself

“Macroeconomic, Market, and Strategic Risks With a global footprint and supply chain, Ford’s results and operations have been and could continue to be adversely affected by economic or geopolitical developments, including protectionist trade policies such as tariffs, or other events. Because of the interconnectedness of the global economy, financial crises, economic downturns or recessions (including reduced consumer spending), pandemics, natural disasters, wars, social unrest, geopolitical crises, or other significant events in one market can have an immediate and material adverse impact on other markets where Ford operates.”

Annual report 2025A · The company itself

“With operations in various markets with volatile economic or political environments and our global supply chain and utilization of transportation routes and logistics providers around the world, we are exposed to heightened risks as a result of economic, geopolitical, or other events. This could include governmental takeover (i.e., nationalization) of our manufacturing facilities or intellectual property, restrictive exchange or import controls, changes to international trade agreements, disruption of operations as a result of systemic political or economic instability, social unrest, outbreak of war or expansion of hostilities, and acts of terrorism, each of which could impact our supply chain as well as our operations.”

Annual report 2025A · The company itself

“Some of our competitors do not have such collective bargaining agreements and are not subject to the same constraints.”

Annual report 2025A · The company itself

“A work stoppage or other limitation on production has occurred, and could in the future occur, at Ford’s facilities, at a facility in its supply chain, or at one of its logistics providers for any number of reasons, including as a result of labor issues, such as shortages of available employees, disputes under existing collective bargaining agreements with labor unions or in connection with negotiation of new collective bargaining agreements, absenteeism, public health issues (e.g., COVID), stay-at-home orders, or in response to potential restructuring actions (e.g., plant closures); as a result of supplier financial distress or other production constraints, such as limited quantities of components or raw materials, quality issues, capacity limitations, or other difficulties; as a result of a natural disaster (including climate-related physical risk); social unrest; cybersecurity incidents; or for other reasons.”

Annual report 2025A · The company itself

“The vast majority of the hourly employees in our manufacturing operations in the United States and Canada are represented by unions and covered by collective bargaining agreements. These agreements provide guaranteed wage and benefit levels throughout the contract term and some degree of income security, subject to certain conditions. Our recent labor contracts, including those with the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (“UAW”) in the United States and Unifor in Canada, have resulted in significant cost increases.”

Annual report 2025A · The company itself

“Our success depends on our ability to continue to attract, develop, grow, support, and reward talented and diverse employees with domain expertise in engineering, software, technology, integrated services, supply chain, marketing, and finance, among other areas. While we have been successful in attracting talent in recent years, as with any company, the ability to continue to attract talent is important, particularly in growth areas vital to our success such as software, electrification and adjacent technologies, and integrated services.”

Annual report 2025A · The company itself

“Competitive Benefit Programs We provide employees with a competitive, comprehensive, and flexible set of benefits and resources to support their financial, social, mental/emotional, physical, and professional health. Our comprehensive global benefits programs are designed to attract and retain top talent worldwide.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“In 2023, the EU adopted the Carbon Border Adjustment Mechanism (“CBAM”), which will subject certain imported materials (such as iron, steel, and aluminum) to a carbon levy linked to the carbon price payable on domestic goods under the European Trading Scheme. The EU CBAM is expected to increase our costs of importing such materials from 2026 onwards and/or limit our ability to import lower cost materials from non-EU countries.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“As a result, significant changes in commodity and energy prices, foreign currency exchange rates, or interest rates as well as increased material, freight, logistics, and similar costs could have a substantial adverse effect on our financial condition or results of operations.”

Annual report 2025A · The company itself

“Commodity price risk is the possibility that our financial results could be worse than planned because of changes in the prices of commodities used in the manufacture of our products, such as base metals (e.g., steel, copper, and aluminum), precious metals (e.g., palladium), energy (e.g., natural gas and electricity), plastics/resins (e.g., polypropylene), and battery raw materials (e.g., lithium, cobalt, and nickel).”

Annual report 2025A · The company itself

“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 EV charging availability and cost).”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Macroeconomic, Market, and Strategic Risks With a global footprint and supply chain, Ford’s results and operations have been and could continue to be adversely affected by economic or geopolitical developments, including protectionist trade policies such as tariffs, or other events. Because of the interconnectedness of the global economy, financial crises, economic downturns or recessions (including reduced consumer spending), pandemics, natural disasters, wars, social unrest, geopolitical crises, or other significant events in one market can have an immediate and material adverse impact on other markets where Ford operates.”

Annual report 2025A · The company itself

“Industry sales volume can be volatile and could decline if there is a financial crisis, recession, public health emergency, or significant geopolitical event.”

Annual report 2025A · The company itself

“Business (Continued) European regulators are also starting to look beyond tailpipe CO2 emissions with new requirements for battery EVs and life cycle assessments. For example, the EU Battery Regulation, which came into effect in 2023, introduces a range of new requirements, including that manufacturers calculate and declare the carbon footprint of their EV batteries and track their environmental performance throughout their life cycles.”

Annual report 2025A · The company itself

“Ford is also subject to environmental regulatory compliance requirements, and in many jurisdictions (including the United States), we are required to report on and correct certain emissions-related defects. Similarly, where required by regulation, we are obligated to honor certain warranties on emissions-related components, which can impose additional obligations beyond our standard warranties and increase our costs.”

Annual report 2025A · The company itself

“For example, we are exposed to reputational risk if we do not reduce vehicle CO2 emissions in line with our targets or in compliance with applicable regulations.”

Annual report 2025A · The company itself

“In addition, government regulations aimed at reducing emissions and increasing fuel efficiency (e.g., ZEV mandates and low emission zones) and other factors that accelerate the transition to EVs in various markets may increase the cost of vehicles by more than the perceived benefit to consumers and dampen margins. Moreover, governmental restrictions on the sale, purchase, or use of internal combustion engine vehicles (e.g., city access restrictions) may limit our ability to sell some of our more profitable vehicles in various markets.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“As a result, significant changes in commodity and energy prices, foreign currency exchange rates, or interest rates as well as increased material, freight, logistics, and similar costs could have a substantial adverse effect on our financial condition or results of operations.”

Annual report 2025A · The company itself

“Commodity price risk is the possibility that our financial results could be worse than planned because of changes in the prices of commodities used in the manufacture of our products, such as base metals (e.g., steel, copper, and aluminum), precious metals (e.g., palladium), energy (e.g., natural gas and electricity), plastics/resins (e.g., polypropylene), and battery raw materials (e.g., lithium, cobalt, and nickel).”

Annual report 2025A · The company itself

“A work stoppage or other limitation on production has occurred, and could in the future occur, at Ford’s facilities, at a facility in its supply chain, or at one of its logistics providers for any number of reasons, including as a result of labor issues, such as shortages of available employees, disputes under existing collective bargaining agreements with labor unions or in connection with negotiation of new collective bargaining agreements, absenteeism, public health issues (e.g., COVID), stay-at-home orders, or in response to potential restructuring actions (e.g., plant closures); as a result of supplier financial distress or other production constraints, such as limited quantities of components or raw materials, quality issues, capacity limitations, or other difficulties; as a result of a natural disaster (including climate-related physical risk); social unrest; cybersecurity incidents; or for other reasons.”

Annual report 2025A · The company itself

“Given the worldwide scope of our supply chain and operations, we and our suppliers face a risk of disruption or operating inefficiencies that may increase costs due to the adverse physical effects of climate change, which are predicted to increase the frequency and severity of weather and other natural events, e.g., wildfires, extended droughts, flooding, and extreme temperatures. In addition, in the event a weather-related event, strike, international conflict, or other occurrence limits the ability of freight carriers to deliver components or other materials to us, or logistics providers are unable to transport our products for an extended period of time, it may increase our costs and delay or otherwise impact our production operations and customers’ ability to receive our products.”

Annual report 2025A · The company itself

“Unprecedented trade policy (including tariffs) in the United States and foreign governments’ reactions limit our ability to conduct effective long-term planning and make capital allocation decisions. The continued strain in U.S.-China relations presents unique risks to U.S. automakers, as does China’s unique regulatory landscape, the level of integration with key components in our global supply chain, the limited availability of various components and materials (including certain rare earth minerals and related products from China), and the rapid development of the Chinese EV industry, with Chinese electrified vehicle manufacturers exporting their products to some key markets in which we operate.”

Annual report 2025A · The company itself

“Further, to make vehicles eligible for the tax incentive for retail purchasers, Ford and other manufacturers structured battery supply chains to comply with the “foreign entity of concern” criteria, which were aimed at reducing dependence on China and companies based in or operating in China. In 2025, Congress eliminated these credits, ending the incentives for purchasers and likewise changing the business rationale to use and create battery supply chains with less control by China.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“If warranty costs are greater than anticipated as a result of increased vehicle and component complexity, the adoption of new technologies, the time it takes to improve the quality of our products and services (or if such efforts are unsuccessful), implementation of additional remedies in the event the initial one is ineffective or parts are unavailable, or otherwise (including as a result of higher repair costs driven by inflation or other economic factors), such costs could continue to have an adverse effect on our financial condition or results of operations.”

Annual report 2025A · The company itself

“This is directly required by California’s ZEV requirements, insofar as those requirements are not preempted by the 2025 federal legislation described above, but is also required to comply with the emissions and fuel economy standards promulgated in recent years, which are not achievable solely through sales of internal combustion engines with today’s technology. There are factors limiting faster and future growth of EV sales, including: supportive public policy; consumer acceptance and understanding of EVs; upfront costs; technology cost and readiness; battery raw material availability and cost; and the availability of adequate infrastructure to support vehicle charging.”

Annual report 2025A · The company itself

“A decrease in, expiration without renewal of, or other cessation or clawback of government incentives for any of our operations or that impact consumers of our products and services (e.g., the termination of U.S. tax credits intended to incentivize the purchase of EVs), as a result of administrative decision or otherwise, has had and could in the future have a substantial adverse impact on the operation of our business, financial condition, or results of operations.”

Annual report 2025A · The company itself

“If there is a shortage of a key component in our supply chain or a supplier is unable to deliver a component to us in accordance with our specifications and at the cost contracted for, because of a production issue, a disruption at a supplier’s facility (e.g., fire, explosion, equipment failure, or natural disaster), limited availability of materials, shipping problems, restrictions on transactions with certain countries or companies, implementation of tariffs, or other reason, and the component cannot be easily sourced from a different supplier, or we are unable to obtain a component on a timely basis, the shortage may disrupt our operations or increase our costs of production and our ability to recoup lost production volume may be limited.”

Annual report 2025A · The company itself

“Operational information systems, security systems, products, and services could be affected by cybersecurity incidents, ransomware attacks, and other disruptions and impact Ford, Ford Credit, their suppliers, and dealers. We rely on information technology networks and information systems, including in-vehicle systems and mobile devices, some of which are managed by suppliers, some of which are provided by third-party service providers, and some of which ultimately rely on other services provided to these third parties by unaffiliated service providers, to process, transmit, and store electronic information that is important to the operation of our business, our vehicles, and the services we offer.”

Annual report 2025A · The company itself

“Operational information systems, security systems, products, and services could be affected by cybersecurity incidents, ransomware attacks, and other disruptions and impact Ford, Ford Credit, their suppliers, and dealers. We rely on information technology networks and information systems, including in-vehicle systems and mobile devices, some of which are managed by suppliers, some of which are provided by third-party service providers, and some of which ultimately rely on other services provided to these third parties by unaffiliated service providers, to process, transmit, and store electronic information that is important to the operation of our business, our vehicles, and the services we offer.”

Annual report 2025A · The company itself

“If there is a shortage of a key component in our supply chain or a supplier is unable to deliver a component to us in accordance with our specifications and at the cost contracted for, because of a production issue, a disruption at a supplier’s facility (e.g., fire, explosion, equipment failure, or natural disaster), limited availability of materials, shipping problems, restrictions on transactions with certain countries or companies, implementation of tariffs, or other reason, and the component cannot be easily sourced from a different supplier, or we are unable to obtain a component on a timely basis, the shortage may disrupt our operations or increase our costs of production and our ability to recoup lost production volume may be limited.”

Annual report 2025A · The company itself

“In China, new standards for AECS (Accident Emergency Call System) related to electronic architecture and devices are expected to take effect in July 2027. Additionally, mandatory national standards for intelligent connected vehicles governing vehicle cybersecurity, software updates, and autonomous driving data recording systems are currently under development in China and will take effect in July 2026.”

Annual report 2025A · The company itself

“For example, our business and strategy are susceptible to tensions in U.S.-China relations and the rapid development of the Chinese electrified vehicle industry, with domestic Chinese producers exporting to some key markets in which we operate.”

Annual report 2025A · The company itself

“Ford Model e operates in North America, Europe, and China.”

Annual report 2025A · The company itself

“Wholesales in certain key markets during the past three years were as follows: Wholesales (a) (in thousands of units) 2023 2024 2025 United States 2,097 2,200 2,105 China (b) 467 442 379 Canada 260 269 292 United Kingdom 243 242 218 Germany 162 155 155 Türkiye 124 114 119 Italy 122 109 100 Australia 89 104 92 France 104 78 66 Other Markets 745 757 869 Total Company 4,413 4,470 4,395 __________ (a)Wholesale unit volumes include sales of medium and heavy trucks.”

Annual report 2025A · The company itself

“Shifting public policy regarding data privacy and the effects of artificial intelligence has caused and may in the future cause us to incur substantial costs to modify our operations or business practices, reduce consumers’ willingness to engage with our offerings, or cause delays or lapses in the availability of our products or services in various jurisdictions.”

Annual report 2025A · The company itself

“In addition, autonomous vehicle and driver assist technologies, including BlueCruise, continue to be scrutinized by government regulators and consumers, and actual or perceived failures or misuse of these technologies and features have led to government investigations and inquiries, including of Ford. Such negative publicity of our products or those of our competitors could undermine consumer trust and negatively impact our subscription rates.”

Annual report 2025A · The company itself

“Autonomous vehicle and driver assist technologies continue to be scrutinized by the government, and actual or perceived failures or misuse of these technologies and features have led to government investigations and inquiries, including of Ford, which has responded to information requests from NHTSA and the National Transportation Safety Board about our hands-free highway driving system, BlueCruise. Ford and other OEMs are required to report to NHTSA any crashes that meet NHTSA-defined criteria and occur when certain advanced driver assistance system features are in use.”

Annual report 2025A · The company itself

“In China, new standards for AECS (Accident Emergency Call System) related to electronic architecture and devices are expected to take effect in July 2027. Additionally, mandatory national standards for intelligent connected vehicles governing vehicle cybersecurity, software updates, and autonomous driving data recording systems are currently under development in China and will take effect in July 2026.”

Annual report 2025A · The company itself

“For example, the United Kingdom, France, Germany, Spain, Portugal, and the Netherlands, among others, have introduced taxation based on CO2 emissions.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“The decline in value of foreign currencies can also contribute significantly to competitive pressures in many of our markets.”

Annual report 2025A · The company itself

“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 EV charging availability and cost).”

Annual report 2025A · The company itself

“Shifting public policy regarding data privacy and the effects of artificial intelligence has caused and may in the future cause us to incur substantial costs to modify our operations or business practices, reduce consumers’ willingness to engage with our offerings, or cause delays or lapses in the availability of our products or services in various jurisdictions.”

Annual report 2025A · The company itself

“Credit risk (which is heavily dependent upon economic factors including unemployment, consumer debt service burden, personal income growth, dealer profitability, and used car prices) has a significant impact on Ford Credit’s business.”

Annual report 2025A · The company itself

“Meeting or exceeding many safety standards is costly and has continued to evolve as global compliance requirements and public domain (e.g., New Car Assessment Programs (“NCAPs”), Insurance Institute for Highway Safety (“IIHS”), and the China Insurance Auto Safety Index) ratings and assessments continue to evolve, are increasing in demands, and lack harmonization globally.”

Annual report 2025A · The company itself

“Ford Model e operates in North America, Europe, and China.”

Annual report 2025A · The company itself

“Wholesales in certain key markets during the past three years were as follows: Wholesales (a) (in thousands of units) 2023 2024 2025 United States 2,097 2,200 2,105 China (b) 467 442 379 Canada 260 269 292 United Kingdom 243 242 218 Germany 162 155 155 Türkiye 124 114 119 Italy 122 109 100 Australia 89 104 92 France 104 78 66 Other Markets 745 757 869 Total Company 4,413 4,470 4,395 __________ (a)Wholesale unit volumes include sales of medium and heavy trucks.”

Annual report 2025A · The company itself

“Ford Pro operates in North America and Europe.”

Annual report 2025A · The company itself

“Wholesales in certain key markets during the past three years were as follows: Wholesales (a) (in thousands of units) 2023 2024 2025 United States 2,097 2,200 2,105 China (b) 467 442 379 Canada 260 269 292 United Kingdom 243 242 218 Germany 162 155 155 Türkiye 124 114 119 Italy 122 109 100 Australia 89 104 92 France 104 78 66 Other Markets 745 757 869 Total Company 4,413 4,470 4,395 __________ (a)Wholesale unit volumes include sales of medium and heavy trucks.”

Annual report 2025A · The company itself

“Ford Pro operates in North America and Europe.”

Annual report 2025A · The company itself