Ford CEO thanks President Trump for latest tariff policies: ‘We are no longer disadvantaged’

Ford reported stronger-than-expected third-quarter results with record revenue of $50.5 billion and adjusted EBIT of $2.6 billion, primarily driven by its Ford Pro division and truck sales, despite ongoing EV losses. However, the company lowered its 2025 adjusted EBIT guidance to $6.0-$6.5 billion, citing a $1.5-$2.0 billion headwind from a Novelis aluminum plant fire disrupting F-150 and SUV supply chains. CEO Jim Farley indicated a strategic pivot towards prioritizing profitable gas and hybrid models, influenced by easing federal emissions goals and new tariff policies that favor U.S.-built vehicles, alongside plans for $1 billion in industrial cost reductions.

Analysis

Ford reported stronger-than-expected third-quarter results, achieving record revenue of $50.5 billion and adjusted EBIT of $2.6 billion, surpassing Wall Street expectations. This performance was driven by the robust Ford Pro division and truck sales, despite ongoing losses from the Model E segment and tariff headwinds. However, the company significantly lowered its 2025 adjusted EBIT guidance to $6.0-$6.5 billion and adjusted free cash flow guidance to $2.0-$3.0 billion, primarily due to a $1.5-$2.0 billion EBIT headwind from the Novelis aluminum facility fire disrupting supply chains.

The automaker is strategically pivoting towards prioritizing profitable gas and hybrid models, influenced by easing federal emissions goals and a focus on high-ROI products. Ford Pro remained the profit engine with $2.0 billion in EBIT, while Model E incurred year-to-date losses of approximately $3.6 billion, underscoring the challenges in the EV transition. Ford Blue contributed $1.5 billion in EBIT, supported by core internal combustion engine and hybrid sales.

Tariff policies, while imposing a $700 million burden in Q3, are expected to have a reduced net impact of $1 billion in 2025, down from prior estimates of $2 billion, largely due to policy adjustments favoring U.S. assembly and new duties on imported heavy-duty trucks. Management plans to hold capital expenditures near $9 billion and implement $1 billion in industrial cost reductions next year. This disciplined approach aims to mitigate headwinds and fund future accretive ICE and hybrid programs, with a cleaner 2026 outlook anticipated.

Key Decisions for Investors

• Investors should closely monitor Ford's ability to mitigate the $1.5-$2.0 billion EBIT impact from the Novelis supply chain disruption and the effectiveness of planned cost reductions, as these are critical for achieving revised 2025 guidance
• Evaluate the long-term implications of Ford's strategic shift towards profitable gas and hybrid models, particularly how it balances near-term profitability with its disciplined EV roadmap and the evolving regulatory landscape
• Assess the sustained benefit of favorable trade policies and U.S. production credits on Ford's margins, especially in its high-ROI truck segments, against the backdrop of global trade dynamics