FFord Motor Company

We note that you provided more expansive disclosure in your Integrated Sustainability and Financial Report 2022 than you provided in your SEC filings. Please advise us what consideration you gave to providing the same type of climate-related disclosure in your SEC filings as you provided in your Integrated Sustainability and Financial Report 2022. Risk Factors, page 17

We respectfully advise the Staff that we regularly consider climate-related matters and trends for inclusion in our SEC filings. We determine what to disclose in our SEC filings in accordance with applicable SEC rules and regulations. We also consider the SEC’s Guidance Regarding Disclosure Related to Climate Change, Interpretive Release No. 33-9106 (February 8, 2010), and assess the quantitative and qualitative materiality of the information under consideration.

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In accordance with these rules and guidance, we include climate-related disclosures and risk factors in our Form 10-K filings as required, including in Item 1, Item 1A, and Item 7.

We have provided robust voluntary sustainability disclosures since 1999 when we published our first sustainability report. Since that time, our sustainability disclosures have evolved as international financial and environmental standard-setting bodies have developed guidance for sustainability disclosures. For climate-related disclosures, we seek to comply with the guidance established by the Carbon Disclosure Project (“CDP”) and the Task Force on Climate-Related Financial Disclosures (“TCFD”) and publish CDP and TCFD reports in addition to our Integrated Sustainability and Financial Report (“Integrated Report”).

Ford Motor Company

Our Integrated Report is consistent with the Global Reporting Initiative (“GRI”) comprehensive reporting standards and follows the International Framework of the International Integrated Reporting Council (“IIRC”). The disclosures provided in the Integrated Report reflect concepts of materiality defined in the sustainability standards we utilize when preparing the Integrated Report and are not meant to correspond to the concept of materiality under the U.S. securities laws and/or disclosures required by the SEC. Specifically, our materiality assessment for purposes of the Integrated Report is based on the GRI’s reporting principles for materiality to a broad range of stakeholders and focuses on significant economic, environmental, and social impacts, rather than the securities law definition of materiality for investors. Based on this methodology, our 2022 Integrated Report contains four main sections – Driving Innovation and Sustainable Growth, Putting People First, Protecting the Environment, and Creating Responsible and Ethical Growth – and reflects our significant sustainability initiatives.

The information contained in our Integrated Report is in response to the requests of various stakeholders for disclosures regarding the measures we are taking to achieve sustainable growth. As a result, the Integrated Report contains a significant amount of detail, including information that neither we nor a reasonable investor would consider material in the context of our annual reports on Form 10-K. We consider the general standards of materiality to reasonable investors under the securities laws for purposes of our SEC filings, and when climate-related disclosures (including climate-related risks) are required in our periodic reports, we disclose the information about those topics that we believe is required to be included therein or otherwise material to reasonable investors under the applicable materiality definition in the securities laws. Consistent with the SEC’s guidance, we refrain from adding immaterial information to our SEC filings that would distract from material information.

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Disclose any material litigation risks related to climate change and explain the potential impact to the company.

In connection with the preparation of each periodic report, we evaluate for disclosure purposes all litigation that approaches or exceeds our litigation disclosure thresholds. The quantification thresholds we apply for class actions and non-class actions brought by private litigants are significantly below the damages threshold set forth in Item 103 of Regulation S-K.

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Applying the relevant thresholds and considering qualitative factors, we have not had any material litigation related to climate change.

While we have not yet experienced any material litigation related to climate change, our risk factors in Item 1A of our 2021 Form 10-K encompass climate change risks. Please see the following:

•Page 20 – The risk factor titled “Ford’s production, as well as Ford’s suppliers’ production, could be disrupted by labor issues, natural or man-made disasters, financial distress, production difficulties, capacity limitations, or other factors” highlights the risk that “a work stoppage or other limitation on production could occur at Ford’s or its suppliers’ facilities for any number of reasons” and lists as an example “as a result of a natural disaster (including climate-related physical risk).”

•Page 21 – The risk factor titled “Ford’s new and existing products, digital and physical services, and mobility services are subject to market acceptance and face significant competition from existing and new entrants in the automotive, mobility, and digital services industries” notes that “new offerings, including those related to electric and autonomous vehicles, may present technological challenges that could be costly to implement and overcome and may subject us to customer claims if they do not operate as anticipated.”

•Page 24 – The risk factor titled “Ford and Ford Credit could experience unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, services, perceived environmental impacts, or otherwise” notes that “compliance with governmental standards does not necessarily prevent individual or class action lawsuits, which can entail significant cost and risk.”

•Page 25 – The risk factor titled “Ford may need to substantially modify its product plans to comply with safety, emissions, fuel economy, autonomous vehicle, and other regulations” notes that “additional and new regulations continue to be proposed to address concerns regarding the environment (including concerns about global climate change and its impact), vehicle safety, and energy independence, and the regulatory landscape can change on short notice” and highlights the risk that “consumer and investor litigation could give rise to de facto changes in the interpretation of existing emission laws and regulations, thereby imposing new burdens on manufacturers.”

We will continue to monitor litigation related to climate change, and we will disclose material matters and the associated risks of potential litigation in future filings.

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Disclosure on page 25 of your Form 10-K notes that additional and new regulations continue to be proposed to address concerns regarding the environment (including concerns about global climate change and its impact). Please revise your disclosure to describe the material effects of these additional and new regulations on your business, financial condition, and results of operations.

We note that this comment is a reference to our risk factor titled “Ford may need to substantially modify its product plans to comply with safety, emissions, fuel economy, autonomous vehicle, and other regulations.” This risk factor covers a variety of changes that may occur in the future that we cannot predict. As regulatory changes occur, we will need to respond to them. The uncertainty associated with such potential changes could create a material risk for us.

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We have included disclosure of significant pending or existing climate change-related legislation that could have a material impact on our operations, examples of which follow.

Electrification is our core strategy to comply with current and anticipated environmental laws and regulations in major markets, as described in the Governmental Standards section on pages 7 – 10 of our 2021 Form 10-K. These regulations vary, but generally require that over time new motor vehicles and engines emit less air pollution, including greenhouse gas emissions, oxides of nitrogen, hydrocarbons, carbon monoxide, and particulate matter. In Europe and California, regulators are moving toward the complete elimination of air pollution from new motor vehicles and engines by approximately 2035. The Governmental Standards section of our 2021 Form 10-K provides examples of the material effects of additional and new regulations on our business.

On Pages 34 and 35 of our 2021 Form 10-K, our MD&A includes a discussion of Key Trends and Economic Factors Affecting Ford and the Automotive Industry. In that section, we discuss vehicle profitability and note that “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 electrified vehicles, may increase the cost of vehicles by more than the perceived benefit to consumers and dampen margins.”

It is not possible to quantify the impact of future regulations or standards on our business. To the extent new regulations are proposed or additional standards take effect that could reasonably be expected to have a material impact on us, we will include relevant disclosures in future filings.

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We note you introduced a sustainable financing framework to finance environmental and social projects. Tell us how you considered providing disclosure regarding material past and/or future capital expenditures for climate-related projects. Include quantitative information for the periods covered by your Form 10-K and for future periods as part of your response.

We released a Sustainable Financing Framework (the “Framework”) in November 2021 to help facilitate financing by Ford and/or Ford Credit for environmental and social projects. All information related to the Framework is found on our Investor Relations website. The Framework specifies potential projects covering four categories: (i) clean transportation, (ii) clean manufacturing, (iii) making lives better, and (iv) community revitalization.

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Our first transaction under the Framework was the issuance of our inaugural $2.5 billion Green Bond in November 2021, and in August 2022, we issued a $1.75 billion Green Bond. An amount equal to the net proceeds from these Green Bonds is being used exclusively to fund clean transportation, including designing, developing, and building our new portfolio of electric vehicles. The proceeds will be utilized as part of our planned investment of over $50 billion in electric vehicles and battery production from 2022 through 2026. This planned investment was disclosed most recently in the Liquidity and Capital Resources section of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

We have committed to being transparent about how the proceeds of any issuance under the Framework is being used. Annually, until full allocation of the net proceeds in the case of Ford, or until maturity in the case of Ford Credit, the issuing entity will publish a Sustainable Financing Report on its website that will include:

• The amount of any Sustainable Financing that has been allocated to the relevant Eligible Portfolio by category, subject to confidentiality considerations;

• The outstanding amount of net proceeds from the sale of any Sustainable Financing yet to be allocated to Eligible Projects at the end of the reporting period; and

• Expected impact metrics, where feasible

This information is not material to investors, even for holders of our Green Bonds, as the information does not relate to any covenants in such notes or the interest rate thereon. Accordingly, as we indicated to investors at the time of the Green Bond transactions, the information is made available to investors on our Investor Relations website instead of in our Form 10-K filings.

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To the extent material, discuss the indirect consequences of climate-related regulation or business trends, such as (i) decreased demand for goods or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources and (ii) any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions.

Please see our responses to comments 2 and 3 above regarding our risk factors and the trend disclosures in the MD&A section of our 2021 Form 10-K. Also please see:

• The risk factor on page 21 titled “Ford’s new and existing products, digital and physical services, and mobility services are subject to market acceptance and face significant competition from existing and new entrants in the automotive, mobility, and digital services industries.” The risk factor notes that “[w]e have announced our intent to continue making multi-billion dollar investments in electrification and mobility.

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Our plans include offering electrified versions of many of our vehicles, including the F-150 Lightning and E-Transit. If the market for electrified vehicles does not develop at the rate we expect, even if the regulatory framework encourages a rapid adoption of electrified vehicles, there is a negative perception of our vehicles or about electric vehicles in general, or if consumers prefer our competitors’ vehicles, there could be an adverse impact on our financial condition or results of operations.”

• The risk factor on page 22 titled “Ford’s near-term results are dependent on sales of larger, more profitable vehicles, particularly in the United States.” The risk factor notes that a “shift in consumer preferences away from larger, more profitable vehicles with internal combustion engines (including trucks and utilities) to battery electric or other vehicles in our portfolio that may be less profitable could result in an adverse effect on our financial condition or results of operations in the near term. In the longer term, if demand for battery electric vehicles grows at a rate greater than our ability to increase our production capacity for those vehicles, lower market share and revenue, as well as facility and other asset-related charges (e.g., accelerated depreciation) associated with the production of internal combustion vehicles, may result.”

We intend to continue to update the risk factors and trends in our MD&A in future filings as appropriate. At this point, we believe there are no other risk factors or disclosures that are material to our reasonable investors regarding indirect consequences of climate-related regulations or trends.

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Please discuss the physical effects of climate change on your operations and results. This disclosure may include the following: • severity of weather, such as floods, hurricanes, sea levels, extreme fires, and water availability and quality; • quantification of weather-related damages to your property or operations; • potential for indirect weather-related impacts that have affected or may affect your customers;

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and • any weather-related impacts on the cost or availability of insurance. As part of your response, include quantitative information for the periods covered by your Form 10-K and explain whether increased amounts are expected in future periods.

We have an established reporting and monitoring function that reports all incidents that occur at Ford locations. Representatives of our Corporate Insurance group as well as plant leadership are included on the distribution of these reports. Natural disasters, including “climate change-related” weather impacts such as wind or water damage from heavy rains or typhoons are included within the reporting system. Any damage is further investigated, and the financial impact estimated.

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In the periods covered by our 2021 Form 10-K, we did not experience any material weather-related damage to our properties or operations or any other material weather-related impacts, including material downtime at a Ford facility.

We purchase a suite of insurance programs covering all Corporate risks. The cost to insure such risks has been less than $150 million annually and has trended up in recent years.

For a discussion of potential risks to our operations and results from the physical effects of climate change, please see our responses to comments 2, 3, and 5 above.

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We note your disclosure on page 25 regarding the cost to comply with governmental regulations. Tell us about and quantify any compliance costs related to climate change during the periods for which financial statements are presented in your Form 10-K and explain whether increased amounts are expected in future periods.

Please see our response to comment 3 above. Please note that we have not historically separated the compliance costs we have incurred that are specifically related to climate change from other costs of operating our business, including the development of vehicles, such as electric vehicles, and to do so would be impracticable. In order to decarbonize our product offerings and comply with climate change regulations, we have been systematically reducing the percentage of our fleet that is comprised of vehicles with internal combustion engines.

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As noted in our response to comment 4 above, we plan to invest over $50 billion in electric vehicles and battery production from 2022 through 2026. This investment will help us comply with the regulatory requirements aimed at reducing greenhouse gas and other emissions from new motor vehicles with internal combustion engines and increasing fleet average fuel economy.

The transition to electric vehicles may have a material impact on our profitability in the near term. For example, as we disclosed on page 25 of our 2021 Form 10-K, our plans include “offering electrified versions of many of our vehicles, including the F-150 Lightning and E-Transit. If the market for electrified vehicles does not develop at the rate we expect, even if the regulatory framework encourages a rapid adoption of electrified vehicles, there is a negative perception of our vehicles or about electric vehicles in general, or if consumers prefer our competitors’ vehicles, there could be an adverse impact on our financial condition or results of operations.” Moreover, as disclosed on page 35 of our 2021 Form 10-K, “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 electrified vehicles, may increase the cost of vehicles by more than the perceived benefit to consumers and dampen margins.”

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If material, provide disclosure about your purchase or sale of carbon credits or offsets and any material effects on your business, financial condition, and results of operations. Include quantitative information for the periods covered by your Form 10-K and for future periods as part of your response.

From time to time, we purchase or sell carbon credits in certain regions. Please see the discussion titled “Vehicle Fuel Economy and Greenhouse Gas Standards” on pages 9-11 in Item 1 of our 2021 Form 10-K. The total amount of all such transactions globally in each of 2019, 2020, and 2021 was not material to our business, financial condition, or results of operations.

In Europe, as noted on page 10 of our 2021 Form 10-K, pooling agreements between manufacturers to utilize credits are possible under certain conditions, and we have entered into such pooling agreements in order to comply with EU

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CO2 fleet regulations without paying an “excess emission premium” in the case of passenger vehicles and to enable other manufacturers to benefit from our positive CO2 performance for light commercial vehicles. In total, we participated in five pools in Europe during the 2019-2021 period: none in 2019, two in 2020, and three in 2021. For the compliance year 2020, we paid less than $100 million to participate in a pool for passenger vehicles; the pool was disclosed on page 41 of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 as one of the variance explanations for our results in Europe. Also for the compliance year 2020, we received less than $100 million to participate in a pool for light commercial vehicles. In 2021, we participated in three pools in Europe and expect to receive less than $25 million in total for such participation (after the final true-up calculations).

In the United States and China, we had no credit sale transactions and minimal credit purchase transactions in each country during the 2019-2021 period. We paid less than $40 million each year for the credit purchases.

We will continue to monitor credit and offset purchases and sales globally. If the transactions are material, we will disclose them in future filings.

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We note your response to prior comment four and reissue it in part. As requested by our comment, please provide us with quantitative information regarding capital expenditures for climate-related projects for each of the periods covered by your Form 10-K.

As described in more detail in our response to comment 2 below, Ford is addressing its impact on climate change by working to reduce our carbon footprint over time across our vehicles, operations, and supply chain. Moreover, as described in our response to comment 4 below, our expenditures on electrification should not be considered as climate-related alone. Nevertheless, during the 2019 through 2021 period, we invested $3.5 billion in electric vehicles and battery production, including $500 million, $1.1 billion, and $1.9 billion in 2019, 2020, and 2021, respectively.

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These cumulative investments are expected to increase to over $50 billion by 2026.

With the importance of our transition to electric vehicles to our business and the size of our investments, we included electric vehicle-related expenditures in the “Material Cash Requirements” discussion in the Liquidity and Capital Resources section of our 2021 Form 10-K and subsequent quarterly reports on Form 10-Q and quantified our expected expenditures in this area in the Liquidity and Capital Resources section of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

Ford Motor Company

For additional information about climate-related expenditures, please see our response to comment 4 below, including our consideration of whether disclosure of such expenditures was warranted. To the extent we incur or expect to incur additional climate-related expenditures, we will evaluate whether such expenditures are material to our business and evaluate potential disclosures at that time.

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We note your response to prior comment five and reissue it in part. Discuss any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions.

As noted on page 3 of our 2021 Form 10-K, “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, and reputation.” Further, our risk factors in Item 1A of our 2021 Form 10-K address potential reputational harm resulting from our products that produce greenhouse gas emissions:

•Page 21 – The risk factor titled “Ford’s new and existing products, digital and physical services, and mobility services are subject to

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market acceptance and face significant competition from existing and new entrants in the automotive, mobility, and digital services industries” includes the following: “With increased consumer interconnectedness through the internet, social media, and other media, mere allegations relating to quality, safety, fuel efficiency, corporate social responsibility, or other key attributes can negatively impact our reputation or market acceptance of our products or services, even where such allegations prove to be inaccurate or unfounded.”

•Page 24 – The risk factor titled “Ford and Ford Credit could experience unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, services, perceived environmental impacts, or otherwise” includes the following: “In addition, adverse publicity surrounding an allegation may cause significant reputational harm that could have a significant adverse effect on our sales.”

•Page 25 – The risk factor titled “Ford may need to substantially modify its product plans to comply with safety, emissions, fuel economy, autonomous vehicle, and other regulations” includes the following: “Moreover, a production disruption, stop ship, limited availability of necessary components, e.g., batteries, lower than planned market acceptance of our vehicles, or other intervening events may cause us to modify our product plans, or, in some cases, purchase credits, in order to comply with fuel economy standards, which could have an adverse effect on our financial condition or results of operations and/or cause reputational harm.”

Ford is addressing its impact on climate change aligned with the United Nations Framework Convention on Climate Change (Paris Agreement) by working to reduce our carbon footprint over time across our vehicles, operations, and supply chain. To help avoid the worst impacts of climate change and reduce carbon emissions, among other initiatives, we have previously announced our plans to reach a global electric vehicle run rate of 600,000 by late 2023, more than 2,000,000 by late 2026, and our expectation that 50% of our global vehicle volume will be fully electric by 2030. In addition, we have announced interim emissions targets approved by the Science Based Targets initiative (SBTi), which call for a 76% reduction in Scope 1 and 2 greenhouse gas emissions by 2035 from a 2017 base year, and a 50% reduction in Scope 3 greenhouse gas emissions per vehicle kilometer from use of sold products by 2035 from a 2019 base year. To the extent we are unable to achieve these initiatives or our transition to electrification is slower than expected, it may harm our reputation.

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. Our vehicle fleet CO2 intensity and trends are reported publicly by regulatory agencies, including the U.S. Environmental Protection Agency, the National Highway Traffic Safety Administration, and the European Environment Agency. Customers, investors, non-governmental organizations, and others review this regulatory data as well as our absolute emissions reported to the Carbon Disclosure Project. By looking at the trend in our CO2 performance and comparing it against that of other OEMs, our customers and investors evaluate how well we are progressing on our announced climate goals and aspirations. If the data reflects a poor performance year, our reputation could be impacted, and customers may choose to purchase the products and services of, and investors may choose to invest in, other companies.

Although the internal combustion engine vehicles we develop, produce, and sell emit greenhouse gas emissions, as do our manufacturing processes, we do not believe those factors have had a material impact on our reputation or business generally, nor do we anticipate a material impact in the future. We believe that is the case because, as described above, we are working to address our impact on climate change and believe our reputation has benefited from those initiatives. To date, we have not experienced a significant loss of customers or business partners, e.g., suppliers, lenders, investors, based on the public perception of our business. Nevertheless, we face reputational risk if we are unable to achieve our initiatives on a timely basis, which may impact other parties’, including customers and investors, willingness to engage with Ford. Accordingly, we believe we have adequately described the reputational risks to our business in our current disclosures, including our risk factors; however, we will evaluate how we might enhance disclosures relative to reputational risks in our Annual Report on Form 10-K for the year ending December 31, 2022.

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In response to prior comment six, you state that you did not experience any material weather-related damage to your properties or operations. Please tell us how you considered providing disclosure regarding the potential for the physical effects of climate change to affect your operations and results.

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In addition, please address the following: • Provide us with quantitative information for each of the periods covered by your Form 10-K for weather-related damages to your property or operations; • Discuss the potential for weather-related impacts that have affected or may affect your customers; and • Clarify how the upward trend in the costs of insurance noted in your response has affected your expectations for future period insurance cost and describe any weatherrelated impacts on the availability of insurance.

In the Management Discussion and Analysis (“MD&A”) section of our 2021 Form 10-K, we “focus specifically on material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of future operating results or of future financial condition.

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This includes descriptions and amounts of matters that have had a material impact on reported operations, as well as matters that are reasonably likely based on management's assessment to have a material impact on future operations.” Regulation S-K Item 303(a).

In assessing the materiality of physical effects that may have resulted from climate change, we have considered the impact on our suppliers and our manufacturing, as well as our customers. Weather and natural disasters can impact our suppliers and at times create supply chain inefficiencies causing additional cost as well as impact our own manufacturing. With respect to our customers, in the event a weather-related event disrupts our production and/or the ability to transport vehicles for an extended period of time, it may impact our ability to deliver our vehicles to our dealers, and, in turn, the ability of those dealers to deliver vehicles to retail customers. We believe weather did not have a material impact on sales during the 2019 through 2021 periods. Moreover, weather-related damage to our property did not exceed $100 million in any year during the 2019 through 2021 periods, and, accordingly, we concluded no disclosure was warranted as the impact was not material.

As noted in our prior response and as described above, we have not experienced a material impact from weather-related events; however, we continue to include appropriate risk factor disclosure given the possibility of these occurrences. In preparing our risk factors in our 2021 Form 10-K, we considered the physical effects of climate change and concluded their potential impact on our ability to produce and sell vehicles should be addressed in our “discussion of the material factors that make an investment in [Ford] speculative or risky” pursuant to Regulation S-K Item 105(a). As described in more detail on page 20 of our 2021 Form 10-K in our risk factor titled “Ford’s production, as well as Ford’s suppliers’ production, could be disrupted by labor issues, natural or man-made disasters, financial distress, production difficulties, capacity limitations, or other factors,” a disruption to our production, regardless of the reason, could have a substantial adverse effect on our financial condition or results of operations. Our list of potential causes of such a disruption includes “a natural disaster (including climate-related physical risk),” which could impact our production directly, i.e., at one of our production facilities, or indirectly, i.e., at one of the production facilities in our supply chain. Our conclusion, however, was that Ford faces a material risk from a production disruption, and the cause of such a disruption, whether it is the physical effects of climate change, labor strikes, stay-at-home orders in response to a public health issue, a shortage of components, or other reason, itself is less significant. Accordingly, in light of our evaluation, we believe our existing disclosures on the potential for the physical effects of climate change to affect our operations and results are appropriate.

With respect to insurance costs, the insurance industry adjusts its pricing to account for trends in weather-related catastrophes. In general, costs are shared across the insurance market by insurance purchasers via a risk-pooling concept. Based upon our historical experience and current knowledge, we have no reason to believe the impact of weather-related events on property, operations, or availability or cost of insurance will materially change in future periods.

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Your response to prior comment seven indicates that you have not historically separated the compliance costs that are specifically related to climate change from other costs of operating your business, and to do so would be impracticable. Tell us about your compliance costs related to climate change and describe your consideration of the disclosure requirement per Item 101(c)(2)(i) of Regulation S-K.

As discussed above and in our prior response dated August 26, 2022, Ford is planning to invest over $50 billion in electric vehicles and battery production by 2026. Within this planned investment are costs to be incurred during the course of our product development and manufacturing activities. Such activities will not only enable us to comply with various regulatory requirements aimed at reducing greenhouse gas emissions from new motor vehicles and engines, but also allow us to satisfy increasing consumer demand for electric vehicles with features and technology that make our vehicles

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attractive to customers. Similarly, as we develop internal combustion engine vehicles, our product development and manufacturing processes will continue to take into consideration the environmental performance of such vehicles, including advanced engines and transmissions, better aerodynamics, lower weight, and other efforts to increase fuel economy, among other aspects our customers consider when purchasing a vehicle. Accordingly, within these expenditures, it is not practical to separate compliance costs that are specifically related to climate change from other costs of operating our business to make products that are competitive in our industry.

Our Sustainability, Environment and Safety Engineering (“SE&SE”) team is tasked with overseeing the Company’s compliance with safety and environmental regulations, including those that are related to climate change. These compliance activities include, among others, inspecting and maintaining our facilities and equipment, preparing and submitting permit applications and reports, vehicle testing for compliance with regulations (emissions-related and otherwise), meeting with federal, state, and local authorities, and retaining and coordinating with consultants and contractors to do the same. These administrative costs are included in our structural costs. Depending on the nature of the particular item, such costs may be included in our “Cost of Sales” or “Selling, administrative, and other expenses” line items on our income statement. These costs, which include more than climate change-related compliance costs, are well below 1% of either line item. In 2019, 2020, and 2021, our “Cost of sales” was $134.7 billion, $112.8 billion, and $114.7 billion, respectively, and our “Selling, administrative, and other expenses” was $11.2 billion, $10.2 billion, and $11.9 billion, respectively.

Further, many of the projects our SE&SE team oversees, in conjunction with other skill teams within the Company, involve expenditures that benefit the Company in multiple ways such that we are unable to classify those expenses as compliance costs related to climate change. For example, we recently announced a new clean energy agreement with DTE Energy pursuant to which we will soon be able to attribute all of our electricity supply in Michigan to clean energy, a major step toward Ford’s goal to reach carbon neutrality, while also creating jobs and tax revenue in Michigan. This purchase amounts to $70 million annually for 25 years and is cost neutral to Ford. In addition, at many of our assembly plants, we have converted to (or, at the time of construction, incorporated) a three-wet paint process. This process uses less energy and water and reduces carbon dioxide and particulate emissions compared with conventional paint processes, which not only provides environmental benefits and assists with our compliance efforts, but also reduces our operating costs. Further, this process results in more durable paint, i.e., resistance to chipping and scratching, pollutants, and sun exposure, thereby improving the quality of our vehicles. A recent cost for such a conversion is $150 million. Accordingly, even if the entire cost of such a project was both considered a climate change-related compliance cost and expensed in a single period (though, depending on the specific nature of the project, it would likely be depreciated over several periods) such amount is immaterial in light of our total “Costs of sales.”

Similar, smaller scale projects at our facilities that may be more directly-linked to climate change-related initiatives, such as air emission abatement consolidation, paint booth air recirculation and air cascade projects, LED lighting installation, and air control equipment inspections, are generally below $10 million and often hundreds of thousands of dollars.

In preparing our 2021 Form 10-K, we considered the disclosure requirement included in Item 101(c)(2)(i) of Regulation S-K in drafting our disclosures in the “Governmental Standards” section of Item 1 (as well as our risk factor descriptions in Item 1A) and include therein a discussion of the “material effects that compliance with government regulations, including environmental regulations, may have upon [our] capital expenditures, earnings and competitive position.” Several excerpts from our 2021 Form 10-K addressing the impact of compliance with environmental regulations are included below:

•“Compliance with emissions standards, OBD requirements, and related regulations can be challenging and can drive increased product development costs, warranty costs, and vehicle recalls.” (page 7)

•“Compliance with automobile emissions standards depends in part on the widespread availability of high-quality and consistent automotive fuels that the vehicles were designed to use. Legislative, regulatory, and judicial developments related to fuel quality at both the national and state levels could affect vehicle manufacturers’ warranty costs as well as their ability to comply with vehicle emissions standards.” (page 7)

•“These mediumand heavy-duty rules, which could entail significant costs and compliance challenges, include complex warranty and recall requirements for some vehicle configurations. Compliance with ZEV rules depends on market conditions as well as the availability of adequate infrastructure to support vehicle charging.” (page 8)

•“In addition, new requirements for tailpipe and non-tailpipe emissions will be included in the upcoming Euro 7 regulation. The costs associated with complying with all of these requirements are significant, and following the EU Commission’s indication of its intent to accelerate emissions rules in its road map publication “EU Green Deal” as well as the EU sustainable mobility action plan, these challenges will continue in European markets, including the United Kingdom.” (page 8)

•“If any federal or state agency imposes and enforces fuel economy and GHG standards that are misaligned with market conditions, Ford would likely be forced to take various actions that could have substantial adverse effects on its sales volumes and results of operations. Such actions likely would include restricting offerings of selected engines and popular options; increasing market support programs for Ford’s most fuel-efficient vehicles; and ultimately curtailing the production and sale of certain vehicles, such as high-performance cars, utilities, and/or full-size light trucks in order to maintain compliance.” (page 10)

•“As the heavy-duty standards increase in stringency, it may become more difficult to comply while continuing to offer a full lineup of heavy-duty trucks.” (page 10)

•“The United Nations developed a technical regulation for passenger car emissions and CO2. This world light duty test procedure (“WLTP”) is focused primarily on better aligning laboratory CO2 and fuel consumption figures with customer-reported figures. The introduction of WLTP in Europe started in September 2017 and requires updates to CO2 labeling, thereby impacting taxes in countries with a CO2 tax scheme as well as CO2 fleet regulations for passenger cars and light commercial vehicles. Costs associated with new or incremental testing for WLTP are significant.” (page 10)

Moreover, as described above, we concluded that other than our investments in electric vehicles, which are only, in part, climate change-related compliance costs, our capital expenditures for environmental control facilities and other climate-related compliance costs (although we believe we have limited costs that are “specifically related to climate change” alone) during the relevant periods were not and were not estimated to be material and, therefore, did not warrant disclosure.

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We note your response to prior comment eight and reissue it in part. Please provide the quantitative information requested by our comment for future periods.

We will continue to monitor credit and offset purchases and sales globally. If we have any such transactions in the future that are material, we will disclose them in future filings. For the 2022 through 2024 periods, we currently expect credit purchases will total less than $10 million per year. Read in the reply ↗