Ford's Second Quarter Profit Suffers Due to Tariffs as the Car Manufacturer Glimpses into Exciting Electric Vehicle Developments
Ford, the American automotive giant, reported its Q2 2025 financial results, revealing a mixed picture of record revenue and ongoing challenges. The company achieved a total revenue of $50.2 billion, a 5% year-over-year increase and above analyst estimates, marking a new high for Ford [1][3][4]. However, the company posted a small net loss of $36 million for the quarter, primarily due to special items and continued significant losses in its electric vehicle (EV) operations.
Strong Performance from Ford Pro and Ford Blue
The Ford Pro commercial vehicle segment and traditional internal combustion engine (ICE) vehicles performed well. Ford Pro delivered an EBIT of $2.3 billion on $18.8 billion revenue, resulting in a margin of 12.3%. Similarly, Ford Blue, representing traditional ICE vehicles, reported $661 million in EBIT [1].
Electric Vehicle and Software Business Struggles
Despite a 105% increase in revenues to $2.4 billion for the Ford Model e business unit, which focuses on EVs and software, the segment recorded a loss of $1.329 billion in Q2 2025. Ford expects to lose up to $5.5 billion on its BEV and software business in 2025 [1].
Tariff Costs and Their Impact
Tariffs imposed by the U.S. government have had a substantial financial impact on Ford. The company's Q2 earnings were reduced by approximately $800 million due to tariffs on vehicles and raw materials like steel and aluminum. Ford subsequently raised its full-year tariff cost projection to $3 billion, up $500 million from prior guidance, largely because tariffs on Mexico and Canada remained higher and longer than expected [1][2][4].
These tariffs contributed to a downward revision of Ford’s adjusted full-year profit forecast from $7.0-$8.5 billion to $6.5-$7.0 billion [1][2][3][4]. Ford's management also highlighted competitive cost disadvantages caused by tariff-induced price differences between Ford vehicles built in the U.S. and certain Japanese imports benefiting from reduced tariffs. For example, some Ford models could be several thousand dollars more expensive than comparable Japanese cars [1].
Looking Ahead
In a teaser for upcoming developments, Ford's CEO, Jim Farley, hinted at a mid-August showcase of Ford's BEV manufacturing complex in Kentucky, referring to it as a "Model T moment". The company's electrified-vehicle sales increased by 6.6% in Q2 2025, reaching 612,095 vehicles in the U.S. [1].
Ford Pro's paid subscriptions grew by 24% year-over-year to 757,000. The reduced tariffs on Japan, as proposed by the Trump Administration, could give Ford's Asian rivals a cost advantage. Ford's adjusted EBIT for the year is expected to be between $6.5 billion and $7.5 billion [1][2].
References
[1] Ford Reports Q2 2025 Earnings. (2025, July 26). Retrieved from https://investor.ford.com/financials/quarterly-reports/default.aspx
[2] Ford Lowers Full-Year Profit Forecast on Tariffs. (2025, July 26). Retrieved from https://www.reuters.com/business/autos-transportation/ford-lowers-full-year-profit-forecast-tariffs-2025-07-26/
[3] Ford Q2 2025 Earnings Beat Estimates, but EV Losses Persist. (2025, July 26). Retrieved from https://www.cnbc.com/2025/07/26/ford-q2-2025-earnings.html
[4] Ford's Q2 2025 Earnings: What You Need to Know. (2025, July 26). Retrieved from https://www.motortrend.com/news/ford-q2-2025-earnings-report-results-analysis/
- Ford's technology-driven transition is evident in its electric vehicle (EV) operations, where the Ford Model e business unit saw a 105% revenue growth, but still posted a significant loss of $1.329 billion in Q2 2025.
- Despite a strong performance from its traditional internal combustion engine vehicles and Ford Pro commercial segment, Ford's outlook for technology-driven investments, particularly in electric vehicles and software, remains challenging, with the company expecting up to $5.5 billion in losses for its BEV and software business in 2025.
