In the current volatile global environment and a more protectionist trade policy in the United States, Ford Motor Company has had to adjust its projections for the rest of 2025.

The company, based in Dearborn, Michigan, detailed that taxes on the importation of steel, aluminum and vehicles, including those from key partners such as Mexico and Canada, have resulted in an unexpectedly high cost for its global operation.

The impact, estimated at $800 million in the second quarter of the year alone, led the company to review the raises its annual tariff impact forecast, now expecting up to $3 billion in costs.

Tariffs and setbacks: Ford changes course in 2025

As a result of these adjustments, Ford has revised its earnings forecast for the fiscal year. Its operating profit before interest and taxes (EBIT) is now between $6.5 billion and $7.5 billion, a range lower than the $7 billion to $8.5 billion it had projected in February.

Jim Farley, the company's CEO, said that the impact is not only considerable, but also represents a warning for the entire automotive industry. "We see a lot of potential depending on how negotiations with the administration progress," Farley stated, suggesting that there are active channels of dialogue between Ford and the White House.

Sherry House, Ford's chief financial officer, explained that one of the factors that has most influenced this review is the continued existence of tariffs on Mexico and Canada for longer than anticipated. Added to this is the rising cost of essential raw materials such as aluminum, steel, and copper.

Stock market crash and red figures: the market reacts

Ford shares were quick to feel the impact of the announcement. Following the release of its quarterly results, the automaker's shares fell 3% in after-hours trading.

On an operating basis, Ford reported second-quarter revenue of $50.2 billion, up 5% from the same period a year earlier.

However, net income showed a significant deterioration, with a $36 million loss attributed to one-time costs, including a recall of a three-row electric SUV and field services related to a $570 million vehicle defect.

Earnings per share fell 21% to 37 cents, although exceeded the 33 cents expected by LSEG analysts.

Aggressive promotions and hybrid bet: Ford responds to the market

To face the adverse environment, Ford launched a series of promotions under the slogan "zero, zero, zero", which includes a down payment of $0, 0% interest for 48 months and no payments during the first 90 days.

These strategies helped maintain sales momentum, especially in gasoline vehicles, which grew 15.5% in the quarter.

Hybrids also positioned themselves well in consumer preferences, in part due to uncertainty over tax incentives for electric cars. Garrett Nelson, an analyst at CFRA Research, cautioned: “The strong revenue performance demonstrates Ford’s pricing power, but margin compression suggests underlying cost pressures remain problematic.”

Competitive Comparison: Ford Less Exposed, But Not Immune

Despite the hit, Ford has been less affected by tariffs than its main rivals thanks to its strong local production base.

About 80% of the vehicles Ford sells in the United States are assembled domestically, according to Global Data, a 25% higher share than General Motors and Stellantis.

GM, however, suffered a bigger hit: $1.1 billion in tariff impact in the last quarter alone, with an annual projection of between $4 and $5 billion. Stellantis estimates that tariffs will increase its costs by $1.7 billion in 2025.

Quality problems and the electric transition: other open fronts

In addition to the weight of the tariffs, Ford faces significant internal challenges. The electric vehicle division continues to generate considerable losses.

In 2025,This unit is expected to close the year with a negative result of up to $5.5 billion. In the second quarter alone, the operating loss was $1.3 billion.

This is compounded by the elimination of the $7,500 federal tax credit for certain electric models starting in September, which could further dampen demand in this segment.

The quality problem also persists. Ford continues to lead the way in the number of vehicle recalls, a situation Farley promised to improve since taking over as CEO in 2020. However, progress in this area has been slow and expensive.

Material Shortages and New Tensions with China

The situation is further complicated by the limited availability of key materials. Ford executives indicated that a shortage of rare earth magnets, imported mainly from China, has forced production pauses. Geopolitical tensions between Washington and Beijing have exacerbated this problem.