Ford Motor Company reported a significant 64% drop in net income for the first quarter of 2025, attributing the decline to production disruptions, ongoing losses in its electric vehicle (EV) division, and escalating costs from new U.S. tariffs. The automaker has also suspended its full-year financial guidance, citing the unpredictability of the current economic climate.
- Net Income: $471 million, down from $1.3 billion in Q1 2024.
- Revenue: $40.7 billion, a decrease from $42.8 billion year-over-year.
- Adjusted Pre-Tax Income: $1 billion, surpassing internal expectations but down from $2.8 billion in the same quarter last year.
- Wholesale Deliveries: 971,000 units, a 7% decline.
The company’s EV division, Ford Model e, reported a narrowed loss of $800 million compared to $1.3 billion in Q1 2024. Despite the improvement, the segment continues to weigh heavily on overall profitability.
Newly implemented U.S. tariffs on automobiles and car parts are projected to reduce Ford’s adjusted pre-tax earnings by approximately $1.5 billion in 2025. In response, the company has paused certain vehicle exports and imports. However, with about 80% of its U.S.-sold vehicles being domestically assembled, Ford maintains some insulation from the full impact of these tariffs.
Ford has maintained its dividend payout at 15 cents per share for the current quarter. However, analysts warn that the dividend is at risk if financial pressures persist. The company’s free cash flow turned negative, at -$1.5 billion, a stark contrast to its earlier projection of $3.5 to $4.5 billion for 2025.
In light of the financial strain, Ford announced price increases ranging from $600 to $2,000 on select 2025 models, including the Maverick, Bronco Sport, and Mustang Mach-E, for vehicles built after May 9, 2025. These adjustments aim to offset the rising costs associated with the new tariffs.
Despite the earnings decline and suspended guidance, Ford’s stock experienced a 2.6% uptick, reflecting investor optimism over the company’s proactive measures to navigate the challenging economic landscape.
Ford’s leadership emphasized a commitment to cost reduction and operational efficiency amid the ongoing market volatility. The company continues to focus on its Ford+ growth plan, aiming to balance traditional vehicle production with the advancement of its EV and digital services segments.
As the automotive industry grapples with geopolitical tensions and shifting consumer demands, Ford’s strategic decisions in the coming months will be crucial in determining its financial trajectory for the remainder of the year.
