Ford Motor Company withdrew its full-year financial guidance, citing rising uncertainty over new tariffs on auto imports by President Donald Trump. The automaker stated trade policy changes are expected to lower its adjusted earnings before interest and taxes by $1.5 billion this year.
“It’s a bit premature right now to fully witness how our competition is responding to these tariffs,” said CEO Jim Farley. “But companies with the most significant U.S. footprint will gain greatly from this environment.”
Tariffs raise major costs
Ford stated that the tariffs will amount to an estimated $2.5 billion in total in 2025. A lot of that is comprised of added expenses due to importing cars and parts from Mexico and China. Ford has halted exporting to China but still imports several models, such as the Lincoln Nautilus, from China.
To mitigate the impact, the company has taken measures like shipping automobiles from Mexico to Canada first to prevent direct U.S. tariffs. These measures have reduced expected costs by some $1 billion.
Stock drops after-hours
Ford reported its profits after the close of U.S. trading on Monday. The news contributed to about a 2.3% fall in its shares after hours. Though total revenue declined, Ford beat estimates by posting quarterly revenue of $40.7 billion, higher than the $36 billion most analysts had predicted.
Earnings fall, but beat forecasts
Ford reported a 14-cent-a-share profit in the first quarter, resulting from far above the 2 cents predicted by analysts. The figure decreased, though, from 49 cents last year. Net income also fell drastically to $471 million from $1.3 billion in the first quarter of the previous year.
Executives credited productivity and quality with allowing the company to top Wall Street estimates.
EV losses mount
Ford continues to grapple with enormous losses in its electric vehicle (EV) division. The automaker is looking to lose up to $5.5 billion in its EV and software business this year. It has lost more than $10 billion there since 2023.
The company recently shelved a costly EV platform program codenamed FNV4 even as it faced delays and rising development expenses. Farley described the move as “a very significant save for capital efficiency.”
Other automakers catch up while Ford slows down
While the other competitors, including General Motors, have restated their revenue forecasts to accommodate the tariffs, Ford has taken a different course of action here. Ford CFO Sherry House said the automaker remains on track to post its original range of $7 to $8.5 billion in earnings if one leaves aside the tariffs.
Tariffs hit hard
Trump’s 25% auto tariffs can cost the industry over $100 billion in the current year. While the automakers will receive some credits for vehicles that are assembled in the U.S., the extra pressure is already forcing changes in the industry. The company expects to see as much as $5 billion in related costs.
Ford’s strong domestic production gives it a potential edge, with 79% of its U.S. car sales domestic compared to 53% for GM. However, the future is uncertain as the tariff landscape evolves.
