Automotive giant Ford has announced a sharp decline in its first-quarter profits, coupled with the withdrawal of its 2025 financial forecast, citing the escalating uncertainties stemming from trade tariffs. The company’s financial results reveal a significant downturn, with profits plummeting by 65% and revenues falling to $40.7 billion. These figures paint a stark picture of the challenges facing the automotive industry in the current economic climate.
Ford has specifically attributed a substantial $1.5 billion annual hit to its adjusted operating earnings due to the imposition of tariffs. These tariffs, particularly those enacted by the Trump administration, have placed a considerable burden on the company’s operations, affecting the cost of imported vehicles, steel, aluminum, and auto parts.
The company had previously aimed for adjusted operating earnings in the range of $7 billion to $8.5 billion for 2025. However, the volatile nature of the current trade environment has rendered these projections unreliable. Ford’s chief financial officer, Sherry House, acknowledged the “potential compression” in sales during the latter half of 2025, as tariff costs are expected to trickle down to consumers.
Ford’s first-quarter financial results reveal the following:
- Profits fell by 65% to $471 million.
- Revenues declined by 5% to $40.7 billion.
- Wholesale units dropped by 7%, attributed to slower production at Kentucky and Michigan plants due to new vehicle launches.
Despite these challenges, Ford’s results slightly exceeded analyst expectations. However, the overall trend indicates a significant strain on the company’s profitability.
Ford is actively working to mitigate the impact of tariffs, including adjusting its supply chain and shifting vehicle shipments. However, the company acknowledges that the situation remains fluid, with potential disruptions to the industry’s supply chain and pricing strategies.
In addition to tariffs, Ford is also grappling with concerns over changes to U.S. emissions policies and restrictions by China on rare earth elements, which are crucial for auto manufacturing. These factors add further complexity to the company’s efforts to navigate the current economic landscape.
Key Highlights:
- Ford has withdrawn its 2025 forecast due to tariff uncertainties.
- The company’s first-quarter profits plummeted by 65%, and revenues fell to $40.7 billion.
- Ford estimates a $1.5 billion annual hit to its earnings from tariffs.
- The company is navigating a volatile economic landscape with potential supply chain disruptions.