Ford Joins Auto Industry Downturn as Tariffs Weigh on Earnings

Ford Motor recorded a $36 million loss in the second quarter, marking a significant decline from the $1.8 billion profit it earned a year earlier. This dip came despite a 5% increase in revenue, which reached $50.2 billion.

The company attributed the downturn largely to tariffs, which reduced its quarterly profits by $800 million. Over the full year, Ford anticipates a total impact of $2 billion from these trade measures, even after factoring in cost reductions and strategic adjustments. Although most of Ford’s vehicles are produced domestically, the automaker remains exposed to tariffs due to its reliance on imported steel, aluminum, and other components.

Tariffs have become a major obstacle for profitability across the auto industry, with Ford now joining companies like GM, Stellantis, Tesla, Mercedes-Benz, and Volkswagen in reporting negative impacts. These trade pressures stem from the Trump administration’s policies, which have reshaped the industry’s cost structures.

Amid these challenges, Ford has worked to keep price increases for consumers minimal. The company expects vehicle prices to rise just 1% this year, having ramped up production ahead of the tariff increases and absorbed some of the associated costs.

The quarter also reflected a $1.3 billion hit from warranty repairs, the cancellation of an electric SUV program, and other one-time expenses. On a more positive note, Ford doubled its electric vehicle revenue, helped by strong European demand for models like the new electric Ford Capri—even as EV sales in the U.S. showed signs of slowing.

Ford faces ongoing pressure from trade policies and input costs, but the company appears committed to mitigating these challenges through operational adjustments and a continued push into electric vehicles. The company’s resilience in revenue growth and early momentum in electrification suggest it is positioning itself for long-term competitiveness despite near-term financial strains.