Ford Restores 2025 Outlook Amid $2 Billion Tariff Blow
Ford Motor Co. restored its full-year financial guidance after having temporarily withdrawn it in May amid uncertainty over U.S. auto tariffs. The company's second-quarter revenue came in better than anticipated, though it recognised a considerable net cost of $2 billion due to tariffs under the Trump administration's trade policies.
The automaker had earlier projected a $2.5 billion tariff cost in 2025 and was looking to offset some $1 billion. The net total impact is now seen at $3 billion, with Ford still confident it can negate $1 billion using internal measures. The company's full-year expectation now includes a $2 billion net tariff hit.
For all the difficulties, Ford's second-quarter automotive revenue was $46.94 billion, beating analysts' predictions of $43.21 billion. Add in revenue from its finance subsidiary, and overall Q2 revenue was $50.2 billion—a 5% gain from 2024's second quarter. Adjusted earnings before interest and taxes (EBIT), though, fell to $2.14 billion from $2.76 billion last year, excluding $800 million in tariff expenses.
Ford’s Chief Financial Officer Sherry House emphasised the company’s ongoing dialogue with the Trump administration. “We’ve been in near-daily communications, particularly regarding steel and aluminium tariffs,” she said. House noted that Ford saw a 1% retail price increase, which the company expects to maintain through year-end.
The new guidance estimates full-year adjusted EBIT of $6.5 billion to $7.5 billion—compared to the pre-tariff estimate of $7 billion to $8.5 billion. Capital spending is estimated at approximately $9 billion, in line with previous estimates.
Ford CEO Jim Farley stressed the company's focus on U.S.manufacturing. "We produce approximately 80% of our cars in the U.S., although we still depend on international components. The administration knows this and is cooperating with us," he said in an interview with CNBC.
Despite some changes in tariff policies, such as reimbursement mechanisms and stacking practice revisions, by the Trump administration, automakers still are experiencing margin pressures. Vis-à-vis General Motors, which anticipates a $4 billion to $5 billion tariff impact this year, Ford's more regionalised production base gives it some protection.
Ford's second-quarter net loss was $36 million, mostly from special charges, such as $570 million associated with the recall of more than 694,000 SUVs and a previous EV program cancellation.
The segments of the company fared unevenly. Classic "Blue" operations witnessed revenue fall 3%, while EBIT dropped to $661 million from $1.17 billion during the previous year. But Ford Pro, the commercial business, increased revenue by 11%. On the other hand, the electric vehicle unit "Model e" incurred a $1.33 billion loss, an expansion from $1.15 billion for 2024.
Overall car sales went up to 612,095 units, a 14.2% year-on-year jump. Electrified vehicle sales went up 6.6%, with hybrid sales growing 23.5%. Pure EV sales declined 31.4%, which indicates weakness in the changing policy landscape. Trump's new tax bill will phase out EV tax credits by September 30, and the EPA will roll back emissions standards.
Farley noted that Ford is adjusting its EV strategy to align with policy shifts. “We’re out of sync in a good way with competitors who overcommitted to EVs. Our flexibility is a strategic advantage,” he added.
Despite volatility, Ford’s stock remains resilient, gaining 9% year-to-date as of Wednesday’s close.
Top 5 FAQs About Ford’s 2025 Financial Outlook
Why did Ford suspend and then reinstate its full-year outlook?
Ford dropped its guidance in May because of uncertainty about tariffs. With clearer insight into financial effects and mitigation actions, it restored its forecast, factoring in a $2 billion net tariff blow.
What is the impact of Trump tariffs on Ford's bottom line?
Tariffs—particularly on steel, aluminum, and foreign parts—have resulted in an estimated $3 billion hit in 2025. Ford will mitigate $1 billion of that, leaving a $2 billion net result.
Which segments are holding up well despite these headwinds?
Ford's commercial business, "Ford Pro," is a highlight, with a revenue boost of 11%. Overall vehicle sales also increased 14.2% year-over-year.
What is the evolution of Ford's electric vehicle strategy?
In the face of policy rollbacks and expiration of EV tax credits, Ford is being more adaptable than competitors. Hybrid sales are strong, but pure EV sales fell 31.4% during Q2.
Will the recent SUV recall affect Ford's books further?
Yes. The recall of 694,000 vehicles added to a $570 million Q2 charge, resulting in a net loss of $36 million for the quarter. Ford is doing things to minimize future recall expense.
