Ford Posts Rough Quarterly Earnings, Suspends Guidance Due to Tariffs
Ford was on track—until the projected higher cost of tariffs reared its head.
Alisa PriddleWriterManufacturerPhotographerMay 05, 2025
006 2025 Ford Expedition Tremor
Ford is the latest automaker to suspend financial guidance in its 2025 full-year forecasts in the wake of seesawing tariff announcements by the Trump Administration that are making outlooks difficult to predict, supply chain disruptions likely, and losses seemingly unavoidable.
In releasing its first-quarter 2025 earnings, Ford says tariffs are estimated to cost $2.5 billion this year, but it has a plan to offset $1 billion of it. The extra cost is on top of earnings that have fallen dramatically from a year ago, with net income dropping 65 percent.
The automaker said it will provide a guidance update when it reports its second-quarter earnings this summer. By then it hopes to have a better idea of the impact of tariffs, consumer reaction, how the competition is handling it, and learn more about other government tax and emission policies affecting the auto industry, chief financial officer Sherry House said on a call with analysts.
General Motors suspended guidance when it released its quarterly earnings April 29, awaiting more clarity on auto tariffs announced last week. It issued new, lower guidance, two days later. GM put the cost of tariffs at $4 billion to $5 billion, a reflection of the fact that GM has a lower percentage of U.S.-built vehicles than Ford. GM will take measures to offset about a third of the additional cost.
Stellantis also suspended guidance due to evolving trade policies. Others who have held back forecasts include Mercedes-Benz and Volvo amid the uncertainty created by U.S. trade policies.
Ford Income, Revenue, Deliveries All Down
Before the tariffs, Ford was tracking to meet its targets and achieve adjusted earnings of $7 billion to $8.5 billion this year, executives said. To start the year, Ford reported first-quarter net income of $471 million—a five percent drop—on $40.7 billion in revenue. Adjusted income (excluding taxes and interest) was $1 billion for the first three months of the year, a 63 percent falloff. The number of new vehicle deliveries was down 7 percent to 971,000.
The good news: quality is up, which means warranty costs were down, said chief operating officer Kumar Galhotra. The automaker has also made strides in reducing cost, on pace for $1 billion in net cost reduction this year (excluding the impact of tariffs).….
By division, Ford Pro, the commercial vehicle arm, brought in $1.3 billion in adjusted earnings, less than half the profit record a year ago. Ford said it was due to some plant downtime and lower fleet pricing. But subscriptions for software services are up 20 percent.
001 2024 Ford Mustang Mach E Rally Front Quarter Motion
Electric Vehicle Losses Grew Smaller
At the other end of the spectrum, Ford Model e, the electric vehicle side of operations, reported a loss of $849 million which is better than the $1.3 billion loss in the same quarter in 2024. And retail sales of electric vehicles in the U.S. increased by 15 percent from a year ago, helped by the offering of home chargers and free installation.
Ford Blue—vehicles with internal combustion engines—only brought in $96 million in adjusted earnings, a steep dive from $901 million a year ago. Volume was down with downtime at the Kentucky assembly plant that makes the Ford Expedition and Lincoln Navigator, but the new models are selling for 18 to 23 percent higher prices, said Andrew Frick, president of Ford Blue and Model e.
Chief Financial Officer Sherry House said half the extra tariff costs are on imported vehicles, the other half are on parts crossing the border. Ford does source most of its steel and some of its aluminum in the U.S. but the tariffs on them could result in higher domestic prices. Despite the government actions, Ford has not changed its North American production plans.
Ford CEO Jim Farley said he understands what the Administration is trying to do, returning more manufacturing, including for parts, to the U.S. in what increasingly feels like a regional business, but he hopes the government will understand the flexibility needed for companies like Ford to succeed.
Alisa Priddle
Alisa Priddle joined MotorTrend in 2016 as the Detroit Editor. A Canadian, she received her Bachelor of Journalism degree from Carleton University in Ottawa, Ontario, and has been a reporter for 40 years, most of it covering the auto industry because there is no more fascinating arena to cover. It has it all: the vehicles, the people, the plants, the competition, the drama. Alisa has had a wonderfully varied work history as a reporter for four daily newspapers including the Detroit Free Press where she was auto editor, and the Detroit News where she covered the GM and Chrysler bankruptcies, as well as auto trade publication Wards, and two enthusiast magazines: Car & Driver and now MotorTrend. At MotorTrend Alisa is a judge for the MotorTrend Car, Truck, SUV and Person of the Year. She loves seeing a new model for the first time, driving it for the first time, and grilling executives for the stories behind them. In her spare time, she loves to swim, boat, sauna, and then jump into a cold lake or pile of snow.
