Ford Motor Company has withdrawn its financial guidance for 2025 amid mounting challenges posed by tariffs imposed by the United States government, despite surpassing Wall Street’s expectations in the first quarter. The Michigan-based automaker anticipates a $2.5 billion negative impact this year due to these trade measures, which have disrupted its cost structure and market outlook.
To mitigate these tariff-related expenses, Ford plans to recoup approximately $1 billion through a combination of pricing adjustments, volume management, and other remedial actions. Even so, the residual $1.5 billion impact has introduced significant uncertainty, prompting the company to suspend its previously issued financial forecast.
Chief Financial Officer Sherry House highlighted the risks facing the industry, noting “near-term risks, especially the potential for industry-wide supply chain disruption impacting production” alongside the possibility of additional or heightened tariffs in the U.S., as well as retaliatory measures from trade partners.
These concerns mirror those of General Motors, which has forecasted a larger tariff burden of between $4 billion and $5 billion, reflecting its greater reliance on imported vehicles. GM has also lowered its 2025 guidance and expects to offset at least 30% of its tariff-related costs.
The tariffs in question include a 25% duty on imported vehicles that came into force in early April, as well as a 25% levy on automotive parts that do not comply with the United States-Mexico-Canada Agreement (USMCA), which recently took effect. These levies have placed considerable strain on the automotive sector, forcing manufacturers to reconsider supply chains and production strategies.
Before the tariff complications, Ford was on track to meet its initial targets, which included adjusted earnings before interest and taxes (EBIT) of between $7 billion and $8.5 billion, adjusted free cash flow of $3.5 billion to $4.5 billion, and capital expenditure ranging from $8 billion to $9 billion.
“Our results in the first quarter show that the Ford+ [turnaround] plan is working. We are transforming this company into a higher growth, higher margin, more capital efficient and more durable business,” House added.
The tariff impact is split between imported vehicles and automotive parts. Ford now expects U.S. industry sales to total approximately 15.5 million units, which is 500,000 fewer than its original forecast prior to the tariffs.
In response, the company has taken steps to reduce tariff exposure, including halting exports from the U.S. to China, modifying imports from China, and implementing other logistical changes. These measures have helped reduce the first-quarter tariff impact of roughly $200 million by 35%.
Financially, Ford reported a 5% decline in total revenue for the first quarter compared with the previous year, amounting to $40.7 billion. Adjusted EBIT stood at $1.02 billion, with net income reported at $471 million. This contrasts with the first quarter of 2024, when revenue was $42.8 billion, including $39.89 billion from automotive sales, net income was $1.33 billion, and adjusted EBIT was $2.76 billion.
Breaking down its operations, Ford’s traditional “Blue” segment saw a modest 3% decline in revenue but suffered a near 90% fall in EBIT to $96 million. The “Pro” commercial division experienced a 16% drop in revenue to $15.2 billion, with EBIT falling to $1.31 billion from over $3 billion a year earlier. Meanwhile, the “Model e” electric vehicle business narrowed its losses from $1.33 billion to $849 million over the same period.
The company continues to pursue quality improvements and cost-cutting initiatives, including a planned $1 billion reduction in expenses this year, excluding tariff-related impacts. Ford intends to provide an update on its 2025 guidance when it reports second-quarter results.