Kristina Roberts
Ford Motor Company, one of the biggest carmakers in the world, has announced that it will face bigger financial pressure from tariffs than it had expected earlier. The company now thinks tariffs will cost them about $3 billion in 2025. This is more than the $2.5 billion they had predicted before. The company shared this news after looking at its performance in the second quarter of the year.
Tariffs are extra taxes that countries put on products that come from other countries. In this case, Ford has to pay more money because the United States has placed higher tariffs on goods from Mexico and Canada, as well as on raw materials like aluminum and steel. These materials are very important for making cars. Even though Ford builds many of its vehicles in the US, these added costs are still affecting their business.
Ford’s Chief Financial Officer, Sherry House, said, “We increased our estimate for tariffs because the costs from Canada and Mexico stayed higher for a longer time than we had expected.” She also said that aluminum and steel have become more expensive due to these extra taxes.
Because of this, Ford had to adjust its full-year forecast. Earlier in February 2025, the company had expected to earn between $7.0 billion to $8.5 billion before interest and taxes. But now, Ford says it expects that number to be between $6.5 billion and $7.5 billion. That means the company is expecting to make less profit than they had hoped for earlier in the year.
In the second quarter of 2025, Ford faced an $800 million expense just from tariffs. This is a huge amount, but it was still less than what some of Ford’s competitors experienced. For example, General Motors said that tariffs cost them about $1.1 billion in the same quarter. A big reason why Ford didn’t suffer as much is because many of their vehicles are built inside the US. That helped them avoid even bigger tariff costs.
Even though the company lost some money this quarter, it still made more money in sales. Ford reported revenue of $50.2 billion, which is 5% more than what it earned in the same time last year. One of the reasons Ford sold more cars is because it offered big discounts to customers. The company started a special deal called the “zero, zero, zero” campaign. This deal gave buyers a chance to buy a car with no down payment, zero percent interest for 48 months, and no payments for the first 90 days. That made buying a Ford more affordable for many people.
This smart move helped Ford’s gasoline-powered cars sell more in this quarter. Sales for these cars went up by 15.5%. Their hybrid cars also became more popular, with many shoppers choosing to go for the fuel-efficient option.
However, not everything was good news for Ford. The company had to cancel a new electric SUV with three rows of seats. Because of this, and also due to a recall of some vehicles that cost about $570 million, Ford ended up with a net loss of $36 million in the second quarter. A “net loss” means the company spent more money than it earned. The company also said that its earnings per share – a number that tells investors how much money each share of the company made – dropped by 21% to just 37 cents.
Ford had earlier paused its yearly forecast in May 2025 to see how President Donald Trump’s new tariff rules would impact its business. Now that they have more information, they decided to give a new estimate. Still, the company is warning that the situation may remain challenging if the tariffs continue or grow even higher.
Despite these issues, Ford continues to fight for a bigger share of the market. Their discount deals and new vehicle line-ups are helping them attract more customers, even when times are tough. The company’s focus on making more vehicles in the US has also helped lower the damage from the tariffs compared to some of its competitors. But there’s still pressure from the rising cost of raw materials like aluminum and steel, which are very important to build cars and trucks.
The fact that Ford’s vehicles made in the US helped avoid some of the bigger hits from tariffs shows how much a company’s manufacturing choices matter. Companies that rely more on imports from other countries, like General Motors’ imports from South Korea, had to pay much more in tariffs.
Ford’s performance in the next few months will likely depend on several things – whether tariffs remain high, how many vehicles they sell with the help of their discount offers, and whether they can control other costs like recalls or delays in new vehicle launches. The company hopes that its strong offers, such as the “zero, zero, zero” campaign, will keep customers interested and keep their sales strong.
In short, Ford is going through a tough time with all these tariff challenges. But the company is also working hard to keep its customers happy and make smart decisions about what kinds of vehicles to build and where to build them. The coming months will show whether these efforts can help Ford stay strong, even when the road ahead looks a little bumpy.
