Ford Motor Company (NYSE: F) is facing growing challenges, with its latest earnings report raising concerns among investors. The automaker’s projected earnings for 2025 are significantly lower than last year, sparking a sharp reaction in the stock market.
Ford Earnings Shock and Stock Reaction
In its latest earnings report, Ford projected adjusted earnings before interest and taxes (EBIT) between $7 billion and $8.5 billion for 2025 well below the $10.2 billion it posted in 2024. This disappointing forecast immediately rattled investors, causing Ford’s stock to drop 4.5% in after-hours trading.
Wall Street analysts had expected stronger numbers, making Ford’s weak guidance a cause for concern. The news has left many wondering whether the company can navigate the challenges ahead.
Experts Sound the Alarm
Several analysts have voiced their concerns about Ford’s financial situation. TD Cowen’s Itay Michaeli rated Ford’s stock as “market perform” with a price target of $10, citing high warranty costs and excess dealer inventory as key risks.
Meanwhile, Philippe Houchois of Jefferies downgraded Ford to an “underperform” rating, pointing to an $8.5 billion deficit in warranty and quality-related costs. The automaker’s ongoing struggles with recalls and customer complaints have added to these worries.
Tariffs Add to Ford’s Woes
As if internal financial struggles weren’t enough, new tariffs imposed by the Trump administration could further complicate Ford’s situation. A 25% tariff on imported vehicles from Canada and Mexico is expected to increase manufacturing costs, which could lead to higher car prices and declining sales.
While there’s speculation that these tariffs might be delayed for a month, the uncertainty is keeping the auto industry on edge. If the tariffs take effect, Ford’s bottom line could take another hit.
Electric Vehicle Challenges
Ford’s electric vehicle (EV) division, Model e, has been another weak spot for the company. In 2024, the division reported a massive $5.08 billion loss, and things aren’t looking much better for 2025. Ford expects another $5 to $5.5 billion in losses this year due to heavy investments in EV production.
The EV market is becoming increasingly competitive, with companies like Tesla and Rivian setting the pace. Ford’s ability to stay in the race will depend on how well it manages these losses and improves its product lineup.
Sales Decline Adds Pressure
Adding to its troubles, Ford’s overall sales dropped 9% in February compared to the same time last year. Traditional gas-powered vehicles took the biggest hit, with a nearly 13% decline.
However, there was a silver lining: sales of electrified vehicles, including the F-150 Lightning and Mustang Mach-E, grew by 23%. This suggests that while Ford is struggling in the short term, its investment in EVs might pay off in the future.
What’s Next for Ford?
As of March 7, 2025, Ford’s stock is trading at $9.85, reflecting a small gain after a period of volatility. Over the past year, the stock has fluctuated between a high of $14.85 and a low of $9.06. With a high debt-to-equity ratio and slim profit margins, Ford’s financial outlook remains uncertain.
The company faces an uphill battle in managing costs, dealing with tariffs, and strengthening its EV lineup. Investors will be watching closely to see whether Ford can turn things around or if more trouble is ahead.
