Trump’s Tariffs Slam Ford with $1.5 Billion Hit, Threatening EV Dreams

Ford has pulled its annual guidance, bracing for a staggering $1.5 billion blow from U.S. President Donald Trump’s tariffs, the automaker announced on Monday, May 5, 2025. As reported by Reuters, this move comes amid uncertainty over the levies, which are set to ripple through the electric vehicle (EV) industry, hitting Ford’s ambitious EV plans hard while consumers face looming price hikes.

Tariffs Drive Up Costs, Stifle EV Growth

Ford’s decision to suspend guidance stems from Trump’s 25% tariffs on automotive imports, which could add over $100 billion in costs for U.S. automakers this year, per industry estimates. For Ford, the tariffs are expected to inflate expenses by $2.5 billion, primarily tied to importing vehicles from Mexico and China. While Ford has halted exports to China, it continues to source models like the Lincoln Nautilus from the region. CFO Sherry House noted the company has mitigated $1 billion of the impact by redirecting vehicles from Mexico to Canada using bond carriers, avoiding U.S. tariffs. However, the remaining $1.5 billion hit still looms large.

The Dearborn, Michigan-based company had forecasted earnings before interest and taxes of $7.0 billion to $8.5 billion for 2025 back in February. House stated Ford was on track to meet this goal before the tariffs derailed plans. “We are focused on managing what we control,” she said, emphasizing the company’s efforts to navigate the trade storm.

EV Division Faces Steep Losses

Ford’s electric vehicle division is already under pressure, projecting losses of up to $5.5 billion in 2025 on its EV and software operations. Since 2023, the division has racked up over $10 billion in losses, compounded by the cancellation of its next-generation electrical architecture, FNV4, due to delays and rising costs. This setback, exclusively reported by Reuters, stalls Ford’s ability to roll out cutting-edge EVs—a critical blow as the industry races toward electrification.

Meanwhile, Ford’s first-quarter revenue dropped 5% to $40.7 billion, though it beat expectations of $36 billion, driven by a consumer rush to buy vehicles amid tariff fears. Net income fell sharply to $471 million from $1.3 billion a year earlier, reflecting production hiccups from new model launches.

Industry Ripples: GM and Stellantis Feel the Heat

Ford isn’t alone in this tariff turmoil. General Motors (GM) slashed its profit forecast this month, estimating a $5 billion hit, while Jeep-maker Stellantis also suspended guidance due to the uncertainty. Barclays analysts noted that Ford’s higher U.S. production—79% of its U.S. sales are assembled domestically compared to GM’s 53%—has made it a safer bet for investors. Still, the broader industry faces a potential $100 billion cost surge, which could force price increases and slow EV adoption.

EVXL’s Take: A Wake-Up Call for EV Enthusiasts

Here at EVXL, we see this as a gut punch for EV owners and enthusiasts alike. Ford’s push into electric—like the sleek models showcased at the International Auto Show in New York City—has been a beacon of hope for sustainable driving. But with tariffs jacking up costs, the dream of affordable EVs feels further away. Imagine shelling out more for your next Mustang Mach-E because of trade wars—it’s a bitter pill to swallow. Ford’s $5.5 billion EV loss projection this year signals a rocky road ahead, but their grit in mitigating $1 billion of the tariff hit shows they’re not giving up. For EV fans, this is a reminder: the future of electric driving isn’t just about tech—it’s tangled up in politics, too. Let’s hope Ford can steer through this storm and keep the EV revolution rolling.