U.S. auto giant Ford F managed to pull off an earnings beat in Q1’25, but its outlook for 2025 is uncertain due to significant tariff challenges. The company has suspended its financial guidance for this year until there is more clarity on the impact of retaliatory tariffs and how consumers might respond to higher prices.
Ford expects a $2.5 billion impact from U.S. President Trump’s tariffs. The legacy automaker plans to offset $1 billion of the cost through strategic measures such as using bond carriers to transport vehicles from Mexico to Canada, as well as pricing adjustments and increased production volumes. However, the remaining $1.5 billion impact expected in 2025 remains a concern.
The automotive industry is facing 25% tariffs on imported vehicles, which went into effect in early April, along with 25% levies on auto parts that do not meet the United States-Mexico-Canada Agreement (USMCA) standards, which started on Saturday.
Ford highlighted supply chain disruptions and potential retaliatory tariffs as factors adding to the uncertainty. The tariff impact is expected to cut U.S. industry sales by about 500,000 units. Before the tariffs, Ford expected to generate EBIT between $7 billion and $8.5 billion and free cash flow of $3.5 billion to $4.5 billion. But amid the macroeconomic uncertainty and tariff woes, Ford expects to take a hit. While Ford has taken steps to adapt, its 2025 outlook remains in flux, with tariff woes lingering over its financial goals.
GM, HOG & TSLA Also Under Pressure
Ford is just the latest automaker to feel the heat from Trump’s tariffs. Companies like General Motors GM, Harley-Davidson HOG, and Tesla TSLA have also scaled back, suspended, or withdrawn their guidance in response to the growing uncertainty.
F’s closest peer, General Motors, has lowered its 2025 earnings forecast, warning that new U.S. auto tariffs could cost the company $4-$5 billion. It now expects adjusted EBIT in 2025 in the band of $10-$12.5 billion, down from its prior guidance of $13.7-$15.7 billion. General Motors has also temporarily suspended the buyback of shares amid uncertainty.
U.S. motorcycle giant Harley-Davidson has also withdrawn its guidance amid macroeconomic and tariff woes. Harley-Davidson expects its tariff costs to hit $175 million this year, despite sourcing most parts from U.S. suppliers, because it still imports some components from China that are now subject to a steep 145% tariff.
Tesla CEO Elon Musk had already walked back his 2025 vehicle growth target from 20-30% to more modest expectations on the Q4 earnings call. But, amid global tariff uncertainty and ongoing challenges in China, the company hasn’t even reaffirmed those lower targets in its latest quarterly update. Tesla plans to revisit its 2025 delivery volume guidance in its Q2 report.
Ford’s Price Performance, Valuation and Estimates
Shares of Ford have gained around 3% year to date against the industry’s decline of 28%.
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From a valuation standpoint, Ford trades at a forward price-to-sales ratio of 0.25, below the industry. F carries a Value Score of A.
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The Zacks Consensus Estimate for F’s 2025 earnings implies a 32.6% drop year over year. Here’s how the EPS estimates for 2025 and 2026 have been revised over the past 60 days.
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Ford stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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