Ford shares slide as automaker takes $800M hit from tariffs, cuts profit forecast
Ford Motor Faces Increased Tariff Costs
On Wednesday, Ford Motor revealed that US tariffs on imported vehicles and materials such as steel and aluminum are expected to have a greater impact than initially anticipated for the year. This announcement caused the automaker’s shares to drop approximately 3% in after-market trading.
In the second quarter, Ford reported an $800 million hit from tariffs, which is less severe compared to some of its US competitors due to its strong domestic manufacturing base. The company has adjusted its projected tariff costs for the year, increasing the higher range by $500 million to $3 billion.
Ford’s CEO, Jim Farley, stated that the company is actively engaging with the White House to reduce tariff costs, particularly on parts tariffs. Farley expressed optimism about the negotiations with the administration and the potential for a positive outcome.
Chief Financial Officer Sherry House cited prolonged duties on Mexico and Canada, along with elevated levies on aluminum and steel, as reasons for the heightened tariff projection. Ford had previously suspended its annual guidance in May to assess the impact of President Trump’s tariffs.
Ford now anticipates full-year adjusted earnings before interest and taxes to fall between $6.5 billion and $7.5 billion, down from the initial projection of $7.0 billion to $8.5 billion made in February 2025.
Despite challenges posed by tariffs, Ford reported revenue of $50.2 billion for the quarter, a 5% increase from the previous year. The company has implemented aggressive discounting programs to maintain market share and stimulate sales.
Gasoline-powered vehicles saw a 15.5% increase in sales during the quarter, while hybrid offers also garnered significant interest from consumers. Ford’s strategic pricing initiatives have demonstrated the company’s pricing power in the market.
Competitor General Motors faced steeper tariff headwinds, with a $1.1 billion impact for the quarter. GM projected a $4 billion to $5 billion tariff impact for the year, aiming to offset 30% of the expense. Similarly, Stellantis expects tariffs to add $1.7 billion in expenses for the year.
Despite challenges, Ford remains resilient with around 80% of its vehicles sold in the US being domestically produced. The company continues to address quality issues and invest in EV technology, although it anticipates losses in this segment for 2025.
Overall, Ford’s ongoing efforts to navigate tariff impacts and strengthen its position in the market reflect a strategic approach to overcome industry challenges.
