On the Road to Better: A Letter from Bill Ford & Jim Farley

Our industry is experiencing change at a remarkable rate and magnitude, and Ford is seizing this opportunity to lead and help build a better world.

That kind of leadership has set us apart for more than 120 years. It is why we were the first in our industry, 25 years ago, to publish a sustainability report, which was recognized for its transparency. It is why we were among the first in our industry to fully integrate our financial, environmental, social, and governance performance into one consolidated report. And it’s why we reorganized our auto business into three customer-focused segments designed to evolve with a changing world.

This values-led approach continues to guide us on the road to a more sustainable and equitable transportation future. And it requires us to be nimble and responsive as we deliver both what our customers want and what the planet needs.

It’s clear to everyone at Ford that electric and software-defined vehicles will play an increasingly important role in our future. What’s also true is that building our business for this future isn’t going to be easy or quick. We believe we will successfully navigate this transition through two pursuits: by focusing on our customers, and by making decisions that improve the lives of our employees and everyone who relies on Ford.

Last year, our overall EV sales increased despite slowing adoption across the industry. We have strong product lineups in all three categories of vehicles – EVs, internal combustion engine vehicles, and hybrids. Hybrid sales rose 20% for the year. In 2024, we expect that percentage growth to increase. In addition to building the best-selling gas and electric trucks in the U.S., Ford also produced the No. 1 and No. 2 best-selling hybrid trucks.

We expect our EV growth to continue this year with the launch of the all-new electric Explorer in Europe. And as EV prices come down, improving access to reliable fast charging is critical to help more customers confidently choose an EV. We’re proud to have partnered with Tesla to ensure Ford customers were the first of any non-Tesla automaker to gain access to Tesla Superchargers across the U.S. and Canada, and we’re giving customers the adapters they need to access the network for free.

There’s also an interesting story about EV adoption when it comes to our commercial and government customers. These customers are increasingly going electric through Ford Pro, a nearly $60 billion, industry-leading business that is helping streamline their path to electrification. Our customers are discovering that EVs get the job done and save them money through lower total cost of ownership. In 2024, Ford Pro’s commercial customers will have more EVs to choose from to support their unique needs and use cases, including an E-Transit with enhanced range.

Our support goes well beyond the products themselves. We are creating an ecosystem of software-enabled customer experiences and services to make our vehicles even more productive, while also improving their environmental performance.

With these diverse offerings, we remain focused on building a profitable and efficient EV business that can scale as demand grows. We’re gaining valuable customer insights from our first-generation EVs. We know the transition to EVs won’t be a straight line, but we can’t lose sight of our goal: a healthy planet and business.

As always for Ford, we are focused on both what we build and how we build. We’ve continued to push ourselves on environmental quality, which includes conserving water, reducing waste, and transitioning our company to carbon-free electricity. It’s what our customers and our neighbors expect from Ford.

We have reduced the overall carbon footprint of our operations, including both manufacturing and non-manufacturing, by 47% between 2017 and 2023. The U.S Department of Energy acknowledged Ford for achieving deep and sustained energy and greenhouse gas savings at 31 locations in the U.S., including all of our manufacturing facilities. Ford announced that our assembly plant in Cologne will be carbon neutral when production of the all-electric Explorer starts later this year, and we continued construction of BlueOval City in Tennessee. The assembly plant there will use the equivalent of carbon-free electricity from the day it opens. We also announced plans to build the country’s first automaker-backed LFP battery plant, BlueOval Battery Park in Michigan, while protecting 245 acres along the Kalamazoo River.

Ford is leading our industry to secure raw materials directly from mining companies aligned with our sustainability goals, to scrutinize our battery supply chain and to acknowledge the rights of Indigenous Peoples. Lead the Charge, a consortium of advocacy organizations, ranked Ford No. 1 among global automakers for our efforts to deliver an equitable and sustainable supply chain.

Ford and our philanthropic arm, the Ford Fund, invested more than $73.7 million in charitable contributions toward its mission to partner with communities to help move people forward across key areas of impact: essential services, education for the future of work, entrepreneurship, and mobility. This year, we are celebrating 75 years of the Ford Fund and its impact in communities worldwide. Building on that commitment, Ford also launched a dedicated community engagement function to provide better lines of communication in communities where we have a manufacturing presence.

Further, we strongly believe in rewarding our employees. In 2023, we offered a record contract for our more than 57,000 UAW-represented employees and their families in the U.S. The three-year agreement with Ford of Canada’s Unifor-represented hourly employees provided significant wage increases and bonuses, and a number of major enhancements to support our future. For our U.S. salaried employees, we introduced new family-building benefits that cater to every unique journey to parenthood. They are designed to help alleviate the financial burden and provide support to make the process easier to understand and navigate.

Our commitment to sustainability remains steadfast. We will continue taking the long view, investing in our people, our communities, and innovation on the road to a better and brighter future for everyone.

We invite you to explore this report for the details of our plans and our progress.

Bill Ford

Executive Chair

Jim Farley

President and Chief Executive Officer