Jim Farley
President & Chief Executive Officer at Ford Motor
Thank you, Lynn, and hello, everyone, and thanks for joining us today.
I'd bottom line the first quarter like this. Our team delivered a solid quarter, while making real progress on our Ford+ growth plan. And I hope that becomes a trend at Ford, boringly predictable, when it comes to execution and delivering financials, but extremely ambitious and dynamic in creating the Ford of the future.
For the quarter, we saw growth across all of our key metrics. In addition, Ford Pro and Blue were profitable in every region where we operate. Our balance sheet is strong. We ended the quarter with close to $29 billion in cash even as we invest in growth and return capital to our shareholders.
With each quarter that passes, I'm more confident and convinced and thankful, we made the decision to create three separate customer-focused businesses. This has unleashed clarity, speed and accountability across the company, not to mention, a whole new level of discipline on capital allocation.
So, let me cover a few highlights. I'd like to start with Ford Pro. I know many of you were surprised at the true size of the Pro business in March when we recast our financials. Pro starts with marketing leadership in our vehicles across the world, tremendous scale and customer knowledge. And we're layering on top of that the future of our industry, an ecosystem of software and services and EV charging that we believe will be invaluable to our commercial customers. And this will unlock tremendous loyalty and profitable growth.
Our strong order books in North America and Europe as well as all the demand signals we can see for Pro, support our target to nearly double Pro's EBIT this year. In March, we launched the all-new Super Duty in Kentucky and Ohio. It has received tremendous reception, and it's going to strengthen a franchise that is already the market leader. Importantly, Super Duty is a platform for software and services that help our customers maximize their uptime, accelerate their productivity and lower total cost of ownership.
I would also say, the Super Duty launch is a good case study for the disciplined approach we're implementing across our industrial system. Simply put, we slowed the launch down, significantly increased on-road and in-plant quality testing, we dispatched a large and skilled launch team to our plant, we added test vehicles, we drove millions of miles to prove our durability and we deployed new technology and artificial intelligence to catch issues.
Basically, we put all the pressure in the system to find and then prevent future quality issues, rather than speeding up the line to match our launch curve. Short-term patience, we believe that will result in long-term gain for our customers and yes the company.
In the quarter, Ford Pro extended its leadership in true commercial vehicle categories. Our share of the Class 1 through 7 truck and vans in the U.S. increased by one full share point to 41% share. In Europe, we've already been the top commercial brand for eight years now running and our share grew to more than 15%. We also maintained our EV strength in North America and Europe. In the U.S., E-Transit has already -- has already a 50% market share. And in the quarter, we won a contract to deliver more than 9,000 E-Transit vans to the U.S. Postal Service.
Ford Pro's paid software subscriptions rose 64% in the quarter, including higher revenue per unit software sales like our telematics and charging software. With these and all the other initiatives, Ford Pro is developing into a resilient business, certainly less cyclical than the broader automotive sector.
In Ford Blue, the team is focused on capitalizing on our red-hot product lineup. Our opportunity to smartly grow extends to valuable franchises with great pricing power, like the F-150, the new Maverick, the new Bronco and, of course, the Mustang. We will grow our leadership position in pickups, in off-road, in performance and in SUVs with all new derivatives.
For example, we just introduced the Bronco less than three years ago and already it's neck and neck in sales with the Jeep Wrangler, and it has higher transaction prices. We've also recently expanded the Bronco lineup with exciting derivatives like the Bronco Everglades, the Bronco Raptor and the Bronco Heritage. Derivatives not only continue to contribute to our growth, but importantly, they can also drive higher transaction prices and higher returns. See, these derivatives often have 80% part commonality with the base models. But their contribution margin percentages can be 30% higher with a two-fold increase in capital efficiency.
We also have one of the strongest product years coming for Ford Blue. So, it's just beginning. We have the new Escape including new Hybrid. It's just arriving at dealerships now. Next week, we will reveal the all new Ranger and the highly anticipated Ranger Raptor, that will be followed by an all new Mustang and high performance Dark Horse Mustang this summer. Well, I can't get into the details yet. We have more exciting news to share about two of America's best-selling vehicles, the F-150 and the Explorer later this year. And on top of all that we have Lincoln Corsair arriving at dealerships now and, of course, we just revealed the Lincoln Nautilus.
Now, Ford Model e operates with a startup intensity to build a profitable EV business with a differentiated portfolio and a differentiated customer experience. U.S. investors now have true visibility into how Ford Model e's profitability strengthens overtime, supported by volume-driven operating leverage, improvements in design and efficiency, and of course lower battery costs. We're on track this year towards a contribution margin approaching breakeven in Model e, and for our first generation products to be EBIT margin positive by the end of next year.
Wholesales were down in the quarter which deleveraged our cost structure. Part of the decline was planned as we've brought Mustang Mach-E production down for several weeks, so we could almost double the capacity and we are now hitting that 35 job per hour run rate in the plant. Volumes were also impacted by the lower output of F-150 Lightning. We did the right thing, and I congratulated my team many times by immediately stopping production and working with our battery supplier, finding and then fixing the root cause of the fire that happened on the Ford property.
We're now shipping Lightnings again taking new orders and increasing production to an annual run rate of 150,000 units, about double what we do now. We are also revealing -- we revealed an all-electric Explorer in Europe, which is now very well received.
We made progress in Model e in the quarter, advancing our industrial system to scale EVs. The site preparation is already underway for our LFP battery plant in Michigan and construction continues at the BlueOval SK Battery Park in Kentucky, and of course, BlueOval City in Tennessee. We now plan to transform our Oakville Assembly Complex into a Canadian hub of electric vehicle and battery pack manufacturing. We also continue to make progress towards locking in all the raw materials that we need to support our capacity targets in '26 and beyond.
Model e is our center of excellence for technology, including software. A good example of that is BlueCruise, which continues to be hit with our customers. Consumer reports rated it the top advanced hands-free driver assist system on the market in the U.S. And that was just version 1.0. Our latest release which were OTA-ing to customers is version 1.2. It automatically changes lanes with the tap of the turn signal and it delivers a much more natural driving experience hands-free.
We also launched BlueCruise in the UK on Mustang Mach-E and became the first OEM to gain approval for hands-free, highway driving, speed anywhere in Europe with more than -- and now BlueCruise has more than 70 million miles driven to date, and we continue to upgrade BlueCruise for customers with each over their update.
Before I turn it over to John, I want to share our thoughts on how the EV market is evolving in our eyes. It's easy to look at the landscape of the EV market as a monolith. But we plan to be surgical about where we play and how we win with the right products, the right cost structure and the right price points. We do not subscribe to a win vehicle share at any cost approach. We look at share of vehicles, of course, and share of revenue. We also look at share of profits and share of the customer lifetime value and we believe this is the only way to ensure we drive appropriate returns or return on capital over time.
By 2025, we now expect there to be 45 EV models to be up offered in the U.S. in the small and medium utility segment. It will be a very saturated two-row EV market. Against this backdrop to ensure profitable growth, we know we have to have a fresh compelling offering with the right cost structure, something we continue to improve with the Mustang Mach-E.
We also found that customers are very loyal to full EV powertrains once they enter, but they are not brand loyal for their first purchase. We capitalize on that, by getting to the market early with the Mustang Mach-E and our whole lineup and it continues to reward us with over 60% of the customers new to Ford. We're seeing that the second EV purchase is much more loyal to the brand in these developed EV markets. So we're glad that we have all these customers in our digital and physical ecosystem.
We are aggressively lowering our product costs for our current and next generation products. You'll find out a lot more in Capital Markets Day, but in fact, for Mustang Mach-E, from launch through the end of this year, we have reduced the bill of materials for Mustang Mach-E by $5,000 per vehicle.
Now, in contrast to two-row crossovers that we believe will be a very saturated market, we believe Model e can be highly differentiated in markets where we know the customer well, like the three-row utility space. And as I said, we'll share more about at our Capital Markets event later this month on our product strategy.
I had a chance, along with John and most of our leadership team to go to China in the last few weeks and look at the EV market in the Gemba Go & See activity up close. It's interesting to see how customers are no longer just attracted to traditional luxury brands with EVs or even hardware design anymore. Outstanding hardware styling, performance, quality are just given in the EV digital marketplace today. The best new brands are offering integrated digital, retail, lifestyle and experience that are software-defined. This is firmly in our sights for our second generation EVs. This software as a differentiator, plus a radically different cost structure and the ability to attract -- attach value-added software and services gives us confidence we can compete and win in unit, revenue, profit and vehicle share, while delivering appropriate returns, and Ford Pro is already there.
I'll wrap up by saying, we're pleased, but we are not satisfied. As I said, solid execution and some really thrilling progress advancing our Ford+ plan. I look forward to seeing many of you in person in three weeks for our Capital Markets event where we will go much deeper into our strategy and our progress.
John?
