Ford Says Tariffs To Have A $1.5 Billion Impact, Halts Full Year Outlook

Ford Motor hit pause on its full-year financial guidance, citing unpredictability stemming from the tariff policies under US President Donald Trump. The automaker warned that the levies could shave approximately $1.5 billion from its adjusted earnings before interest and taxes.

Speaking to analysts on Monday evening, CEO Jim Farley addressed the uncertainty surrounding competitor actions in response to the tariffs. “It’s still too early to fully understand our competitors' responses to these tariffs,” Farley said.

“It’s clear, however, that in this new environment, automakers with the largest US footprint will have a big advantage," the executive added, reported Reuters.

Ford made the announcement after the US markets closed, with shares slipping about 2.3 per cent in after-hours trading.

Export Cuts, Strategic Moves to Reduce Costs

Ford executives revealed that the total cost impact of the tariffs this year is expected to reach $2.5 billion, mostly due to vehicles imported from Mexico and China. Although the company has stopped exporting cars to China, it continues to bring in models such as the Lincoln Nautilus from the country.

In an effort to offset some of the damage, Ford has implemented measures that have already cut $1 billion from the projected costs. One strategy involved rerouting vehicles through Canada using bond carriers to bypass certain tariffs.

Previously, in February, the automaker estimated its 2025 earnings before interest and taxes would fall between $7.0 billion and $8.5 billion—an outlook that did not factor in the impact of tariffs. According to CFO Sherry House, Ford remains on track to meet that target, excluding tariff-related effects.

Competitors like General Motors have issued updated forecasts, but Ford is holding off until the longer-term repercussions become clearer. “It’s a bold move for them to withdraw guidance when GM gave revised guidance including tariffs, though to be fair things are very uncertain,” said Morningstar Research analyst David Whiston.

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EV Struggles Deepen, Profits Take a Hit

Beyond tariffs, Ford is grappling with mounting losses in its electric vehicle segment. The company anticipates up to $5.5 billion in EV and software-related losses this year, having already recorded over $10 billion in losses since 2023.

Reuters reported that Ford recently pulled the plug on its costly FNV4 platform development due to persistent delays and soaring expenses. Farley called the cancellation “a very significant save for capital efficiency.”

In Q1, Ford’s net income dropped to $471 million, a steep decline from $1.3 billion in the same period last year. Revenue also dipped by 5 per cent to $40.7 billion but still beat analysts’ forecasts of around $36 billion.

Consumer fears over price hikes led to a temporary sales boost, with Ford leveraging incentives to gain market share. Meanwhile, GM has projected up to $5 billion in tariff-related costs, and Stellantis has also withdrawn its financial outlook due to the prevailing uncertainty.

Analysts at Barclays noted that Ford's strong US manufacturing presence gives it an edge. “Investors have preferred Ford over GM given Ford has a much higher mix of US sales that are assembled in the US,” they said, pointing to Ford’s 79 per cent US assembly rate compared to GM’s 53 per cent.

Ford’s commercial unit, Ford Pro, posted $15.2 billion in first-quarter revenue, down 16 per cent year-over-year. Gasoline-powered models brought in $21 billion, while its Model e segment, encompassing EVs and software, earned $1.2 billion.

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