Tariff Credit Change And Cost Impact
Ford said its tariff costs were $900 million (£660 million) higher than expected last year after a late change to the Trump administration’s tariff relief program. The scheme allows carmakers that import parts for vehicles assembled in the United States to apply for credits to offset levies, but administration officials told Ford in December that the policy would take effect later than planned, reducing the benefit the company expected to receive.
Chief executive Jim Farley said Ford spent about $2 billion on tariffs in 2025, roughly double what the company had anticipated, citing what he called an unexpected late-year change in tariff credits for auto parts. The company said it restricted its expectations based on the earlier timeline and then saw fewer gains from the credits once the effective date shifted.
Broader Pressure From Tariffs
Ford’s higher bill highlights the uncertainty automakers continue to face as they manage tariff costs and seek exemptions. The company said the volatility adds to financial pressure while policy details change and timelines move.
EV Strategy Shift And Quarterly Results
Separately, Ford had disclosed a $19.5 billion charge tied to its shift away from earlier electric vehicle plans, which contributed to a fourth-quarter net loss of $11.1 billion. The company said it is backing away from plans to produce large EVs, pointing to weaker demand and recent regulatory changes. Ford said the business case for focusing on large EV models had weakened and that it is now investing in hybrids, gas-powered vehicles, and smaller, lower-priced EVs.
General Motors made a similar move in October, when it said it would take a $1.6 billion charge as it scaled back EV plans amid softer demand. Ford also said a fire at an aluminum supplier weighed on its profits last year.
Outlook And Market Reaction
Despite the tariff costs and the quarterly loss, Ford reported revenue that exceeded analysts’ expectations. Executives said they expect profit to improve this year and forecast a smaller loss in the EV business. The company’s shares rose slightly in after-hours trading in the United States.
Featured image credits: Wikimedia Commons
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