Ford Motor (NYSE: F) reported second-quarter 2026 revenue of $48.3 billion, down 4% year over year, while delivering $2.5 billion in adjusted EBIT, a 17% increase. The automaker raised its full-year adjusted EBIT guidance midpoint by $1 billion to $10 billion–$11 billion.

The results reflect strong pricing and product mix gains that offset volume declines driven by Novelis aluminum supply disruptions and vehicle sunsets. Ford ended the quarter with $22.3 billion in cash and total liquidity of $43.4 billion.

Financial Performance

Ford’s top-line contraction contrasts sharply with its bottom-line expansion. Revenue fell due to expected volume reductions from lower Novelis aluminum supply and the sunsetting of certain vehicles as the portfolio refreshes. However, EBIT strength was largely driven by favorable mix and net pricing.

The company recorded a $1.3 billion net loss in the quarter, primarily due to a one-time special item charge of $3.6 billion related to the May disposition of the BlueOval SK Battery joint venture. Approximately $500 million of this charge was cash.

Segment Highlights

Ford Blue delivered $1.1 billion in EBIT on $26.1 billion in revenue, representing a 72% increase in profitability despite an 8% decline in wholesales. F-Series remains the number one truck brand, outselling the closest competitor by more than 80,000 units in the first half of the year. Off-road vehicles now comprise 25% of U.S. sales.

Ford Pro generated $1.7 billion in EBIT on $17.8 billion in revenue. EBIT fell 26% primarily due to temporary Novelis disruption, though software and physical services showed growth. The segment expects a strong recovery in the second half due to Super Duty fleet orders.

Model e reported an EBIT loss of $919 million on $1 billion in revenue. This marks a 31% improvement in EBIT losses, driven by structural cost reductions and right-sized Gen1 volumes. This is the third consecutive quarter of year-over-year EBIT improvement for the electric vehicle unit.

What the Numbers Show

The divergence between falling revenue and rising EBIT highlights Ford’s strategic shift toward margin accretion over volume growth. While wholesales declined 8% in Ford Blue, EBIT surged 72%, indicating that higher-margin trims—such as off-road and V8 series—are compensating for lower unit sales. Additionally, Ford Energy is scaling rapidly, with plans to reach 20 GWh of annual capacity by late next year, positioning it as a leading energy storage manufacturer.

Guidance and Outlook

Ford raised its full-year adjusted EBIT guidance to $10 billion–$11 billion, narrowing the range and increasing the midpoint by $1 billion. Adjusted free cash flow guidance was increased to $6 billion–$7 billion, including the flow-through of higher EBIT and approximately $500 million of IRA reimbursement booked in Q1.

Capital expenditures remain unchanged at $9.5 billion–$10.5 billion. The company expects to deliver $1 billion in material and warranty cost reductions in 2026, enabling increased investments in the UEV platform and Ford Energy. Ford Credit expects earnings before taxes above $2.5 billion for the full year.

Ford Motor Co (NYSE: F) dismissed a letter from Transportation Secretary Sean Duffy urging it to wind down partnerships with Chinese firms as a "wrongheaded attempt to capture headlines."

Duffy wrote to CEO Jim Farley on Tuesday, expressing "profound concern" about Ford's arrangements with battery maker CATL, Geely Automobile Holdings Ltd, and BYD Co Ltd. The Secretary warned that these ties could create U.S. security risks.

Security Concerns Raised

The letter highlighted Ford's plan to use licensed CATL technology at its Marshall, Michigan battery project. Duffy noted CATL's placement on a Pentagon list tied to alleged links with China's military, stating the department was "deeply alarmed" by this dependence.

Additionally, Duffy faulted Ford's timeline for shifting Lincoln Nautilus production out of China. He argued the current schedule would keep the automaker tied to Chinese manufacturing for years, despite Commerce Secretary Howard Lutnick previously hailing the decision to move some Lincoln models to the U.S. by the end of the decade.

Ford's Rebuttal

Ford responded by asserting it owns the Marshall plant, controls the operation, and employs the workforce. The automaker stated, "While others continue to import Chinese batteries, Ford is investing to build batteries here in America."

Ford also claimed the letter contained factual errors, specifically denying it had proposed a joint-venture framework as described by Duffy. This reference likely alludes to reports from February where Farley discussed forming joint ventures to allow Chinese automakers entry into the U.S. market.

Market Reaction

Ford shares were up 0.21% at $14.03 during pre-market trading on Wednesday following the exchange.