Ford Reports $900m Extra Tariff Costs After Policy Change
Ford Motor Company has revealed it incurred an additional $900 million in tariff-related costs last year, blaming a late adjustment to a US government relief programme for the higher-than-expected bill.
The automaker said its total tariff expenses for 2025 climbed to roughly $2 billion – double what it had initially projected. Chief executive Jim Farley attributed the spike to an “unexpected and late-year change” to credits designed to ease the impact of import duties on auto parts.
The relief scheme, introduced under President Donald Trump, allows car manufacturers assembling vehicles in the United States to apply for credits to offset tariffs on imported components. However, Ford said officials notified the company in December that the policy would take effect later than previously understood, limiting the credits it had anticipated receiving.
The disclosure highlights the uncertainty facing carmakers as they navigate shifting trade policies and seek exemptions from tariffs that have raised production costs across the industry.
In addition to tariff pressures, Ford had earlier announced $19.5 billion in charges linked to scaling back its electric vehicle (EV) strategy. Those costs contributed to a fourth-quarter net loss of $11.1 billion.
The company has moved away from plans to produce larger electric vehicles, citing weaker consumer demand and regulatory changes. Ford said the financial rationale for focusing heavily on large EV models had weakened, prompting a pivot toward more profitable hybrid and petrol-powered vehicles, as well as smaller, more affordable electric options.
Rival General Motors made a similar adjustment in October, announcing a $1.6 billion charge as it pared back its own EV expansion plans amid slowing demand.
Ford’s performance was also affected by a fire at one of its aluminium suppliers, which disrupted operations and added to financial strain.
Despite these setbacks, the automaker reported quarterly revenue that exceeded analysts’ expectations. Company executives also projected improved profitability in the year ahead and forecast narrower losses in the EV segment.
Ford shares edged higher in after-hours trading following the earnings announcement.
