Ford Motor Company has reported a $1.5 billion loss so far this year, attributing much of the financial blow to auto tariffs imposed under President Donald Trump's administration.

These include a 25% tariff on both imported vehicles and auto parts. Ford CFO Sherry House indicated that vehicle prices in the U.S. could rise by approximately 1% to 1.5% in the latter half of 2025, potentially leading to fewer buyer incentives and higher sticker prices on new fall models. Despite the setback, Ford anticipates less impact from the tariffs compared to rivals like General Motors due to the majority of its vehicles for U.S. consumers being produced domestically. GM has projected losses of $4-5 billion from the tariffs. Ford CEO Jim Farley also announced an employee pricing offer through July 4 but did not guarantee its extension. The company is currently offloading inventory imported before the tariffs took effect in April. Meanwhile, Ford may revive its iconic Fiesta model in collaboration with Volkswagen.

Farley further noted that the tariffs could add $5,000 or more to the cost of imported vehicles, affecting about half of the vehicles sold in the U.S. He highlighted the trade-off between relocating production of affordable models like the Bronco Sport SUV and Maverick compact pickup to the U.S., which would raise costs and diminish their affordability for American consumers. WSJ

In response to these challenges, Ford is focusing on improving quality and lowering fixed costs. The company continues to lose money on battery electric vehicles (BEVs) like the Mustang Mach-E, which is made in Mexico and will cost Ford even more to sell due to the tariffs. Automotive Dive

As the automotive industry navigates these turbulent times, Ford's strategic decisions in the coming months will be critical in maintaining its market position and financial health.