Ford Posts Largest Earnings Miss in Four Years Amid Tariff, Supplier Headwinds

DEARBORN (Azat TV) – Ford Motor Company reported its first quarterly earnings miss since 2024 for the fourth quarter of 2025, marking its largest such miss in four years. The automotive giant cited significant financial impacts from tariffs and a fire at a key aluminum supplier, Novelis, as primary contributors to the shortfall. Despite these substantial headwinds, Ford executives have outlined a forward-looking strategy focused on operational improvements and diversified initiatives, projecting a stronger performance in 2026.

For the fourth quarter of 2025, Ford’s adjusted earnings per share (EPS) stood at 13 cents, falling significantly short of analysts’ average expectations of 19 cents. This 32% deviation from consensus estimates represents the company’s most substantial quarterly miss since the fourth quarter of 2021, when it reported a 42% difference. The earnings report detailed a challenging 2025, with adjusted operating profit reaching $6.8 billion, a decline from the previous year. However, without the one-time tariff credit timing issue, Ford’s 2025 EBIT would have been $7.7 billion, according to CFO Sherry House.

Tariffs and Supplier Fire Impact Ford’s 2025 Performance

Ford faced a cumulative $4 billion impact in 2025 from external factors, including $2 billion from the Novelis fires and an additional $2 billion net tariff impact. CEO Jim Farley specified that the tariff impact was $1 billion higher than initially communicated in October, due to an “unexpected and late-year change” in tariff credits for auto parts. This change meant a credit against tariff liabilities became effective in November instead of May, creating a one-time hit in 2025 but allowing for future use.

The multiple fires at Novelis’s Oswego, New York, facility severely disrupted the supply of aluminum, a critical material for Ford’s profit-heavy trucks, including the popular F-150s. While operations have resumed, the hot mill is not yet at full capacity. Ford expects to source aluminum globally until the hot mill fully recovers between May and September 2026, incurring temporary costs of $1.5 billion to $2 billion, including premium freight, to maintain supply continuity.

Despite these challenges, Ford achieved $187 billion in revenue for 2025 and improved its U.S. market share to 13.2%, described by CEO Jim Farley as the company’s best performance in six years. The company also made progress in lowering material and warranty costs, alongside efforts to improve quality and recall older vehicles.

Ford’s Strategic Pivot and 2026 Outlook

Looking ahead, Ford has guided for a significantly improved 2026, with company adjusted EBIT projected to be between $8 billion and $10 billion, and adjusted free cash flow between $5 billion and $6 billion. This optimistic outlook is predicated on the full-year benefit from expanded tariff credits, further material and warranty savings, and the fading impact of the Novelis supply disruptions.

A core component of Ford’s forward strategy involves a pivot in its electric vehicle (EV) approach. CEO Jim Farley announced a shift towards “high-volume, affordable” EV segments, planning multiple launches on its new ‘Universal EV Platform’ starting in 2027 with a midsize pickup. The company also intends to integrate hybrids across its lineup and extended-range EVs where appropriate. The Model e segment, dedicated to EVs, is still projected to incur losses of $4.0 billion to $4.5 billion in 2026, though losses on first-generation EVs are expected to improve.

Beyond traditional vehicle manufacturing, Ford is making significant investments in new growth areas. The company is developing ‘Ford Energy,’ an initiative to address growing demand for battery storage tied to data center buildouts and grid stability, pursuing contracts for 20 gigawatt-hours of capacity starting in 2027. Ford plans to allocate approximately $1.5 billion of its 2026 capital expenditures to Ford Energy. Additionally, Ford is bringing Level 3 autonomous driving capability in-house, aiming to introduce this technology on its Universal EV Platform for more affordable vehicles, targeting a price range of $30,000 to $35,000 rather than limiting it to luxury offerings.

CFO Sherry House also noted that Ford expects to record approximately $7 billion in charges in 2026 and 2027 related to its updated EV strategy and the disposition of its BOSK investment, with cash expenditures up to $5.5 billion, mostly weighted to 2026. Daniel Ives, an analyst at Wedbush Securities, commented that while the results were ‘about what was expected given the challenges Ford is navigating,’ there is ‘hope Ford is turning the corner, and 2026 is a key year for (CEO Jim) Farley to prove the naysayers wrong.’

Ford’s latest earnings report underscores the significant impact of external economic and supply chain pressures on even established automotive giants, particularly the unforeseen consequences of tariff changes and critical supplier disruptions. However, the company’s proactive strategic adjustments—including a renewed focus on affordable EVs, diversification into energy solutions, and in-house development of autonomous technology—signal a determined effort to mitigate future vulnerabilities and leverage new market opportunities, positioning 2026 as a pivotal year for demonstrating the efficacy of these shifts.