Image Courtesy: The Drive
Ford says it was left with a $900 million tariff bill after a late change to the Trump administration’s tariff relief program significantly reduced the credits it expected to receive.
The relief scheme was designed to help automakers offset levies introduced under President Donald Trump, allowing companies that import parts for vehicles assembled in the United States to apply for credits. However, Ford executives say they were informed in December that the policy would take effect later than initially planned. That shift meant fewer eligible credits and a much larger tariff burden than anticipated, as reported by the BBC.
Chief executive Jim Farley said the company ultimately spent roughly $2 billion on tariffs in 2025, about double what it had originally projected. He attributed the higher figure directly to what he described as an unexpected late-year change in how tariff credits for auto parts would be applied.
The added costs highlight the uncertainty automakers continue to face as they navigate trade policy, supply chain pressures, and shifting regulatory frameworks. Manufacturers have been lobbying for exemptions and clarity, but sudden adjustments can dramatically affect financial planning and quarterly results.
Tariffs were not the only headwind for Ford. The company has also disclosed a $19.5 billion impact related to its pivot away from earlier electric vehicle ambitions. Those charges contributed to a fourth-quarter net loss of $11.1 billion. Ford previously said it was scaling back plans to produce large electric vehicles, citing weaker-than-expected demand and regulatory changes that altered the business case for heavy EV investment.
Instead, the automaker is redirecting capital toward hybrid models, traditional gas-powered vehicles, and smaller, more affordable electric vehicles. The move mirrors a similar strategy shift by General Motors, which also announced a pullback from certain EV plans amid cooling demand.
A fire at an aluminum supplier further pressured Ford’s profitability last year, compounding operational challenges.
Despite the tariff hit and reported net loss, Ford posted quarterly revenue that exceeded analysts’ expectations. Executives are forecasting an improvement in profits this year and anticipate reduced losses within the company’s EV division. Investors responded cautiously positively, with shares edging higher in after-hours trading.
