Big Three automaker Ford Motor Co. On Monday suspended its full-year financial guidance, citing escalating uncertainty tied to US trade policy, especially concerning Canada and Mexico, and warned of losses to come.
Despite beating Wall Street’s first-quarter expectations, Ford reported a steep decline in net income — plunging to $471 million, down from $1.3 billion a year earlier — as production halts and continued losses in its electric vehicle business weighed on results.
Revenue fell 5% year over year to $40.7 billion, while wholesale deliveries dropped 7% to 971,000 vehicles.
The company further warned the duties could cost it up to USD$1.5 billion this year, clouding its previously optimistic outlook.
The automaker’s EV division, Model e, remained a major drag on profitability, though quarterly losses narrowed to $849 million, compared to $1.33 billion in the same period last year.
Ford attributed the improvement to lower input costs and stronger pricing but acknowledged the unit remains deeply in the red.
CEO Jim Farley called the financial hit from tariffs “huge numbers,” though emphasized Ford is more insulated than some competitors.
“It’s a pretty dynamic situation. This is all really new for all of us,” Farley said on a call with analysts. “We expect to make significantly more progress on our two biggest areas of opportunity – quality and cost – in 2025, but tariffs complicate the road ahead.”
Unlike General Motors, which estimates up to $5 billion in tariff-related expenses, Ford is seen as less vulnerable due to its supply chain and production footprint.
Roughly 80% of Ford’s US sales are built domestically, and most of its parts avoid additional duties under the Canada-United States-Mexico Agreement (CUSMA). Still, the company has paused imports of China-built Lincoln Nautilus SUVs and halted exports to China in a bid to mitigate the financial impact.
Ford CFO Sherry House said the company was originally “tracking toward” full-year guidance that included $7 billion to $8.5 billion in adjusted EBIT and $3.5 billion to $4.5 billion in free cash flow — targets now suspended due to “near-term risks” from tariffs and potential supply chain disruption.
House added that the automaker continues to pursue $1 billion in cost reductions this year, excluding tariff-related costs, and has tied executive compensation to improvements in quality and efficiency.
While Ford’s traditional Blue business and Pro commercial unit also saw earnings decline sharply, Farley reaffirmed the company’s longer-term commitment to transforming Ford into a leaner, more competitive player — especially in the EV space, where losses are expected to reach $5.5 billion in 2024 before more affordable, longer-range models arrive in 2027.
With industrywide volatility mounting and key rivals like GM and Tesla revisiting forecasts, Ford said it would provide an updated financial outlook with its second-quarter results.
Despite the earnings warning, Ford’s shares were up almost 3% on the New York Stock Exchange Tuesday, to $10.44 although they’re down about 17% from the same period a year ago. Tesla shares, meanwhile were down about 2% to $275.89 and are down 27% year-over-year.