Ford's Q2 earnings falter under tariff pressure, with intriguing electric vehicle announcements on the horizon

In a recent earnings call, Ford Motor Company, led by CEO Jim Farley, revealed its financial performance for Q2 2025. The automaker reported a net loss of $36 million, but showed promising growth in other areas.

Ford's traditional Internal Combustion Engine (ICE) vehicles, under the Ford Blue banner, reported an EBIT of $661 million. The company's electrified-vehicle sales increased by 6.6% in Q2 2025, totaling 82,886 units. This growth contributed to a revenue of $50.2 billion for the quarter.

However, Ford expects to lose up to $5.5 billion on its Battery Electric Vehicles (BEV) and software business in 2025. The Ford Model e business unit, a key part of this electrification strategy, is still losing money, with a loss of $1.329 billion in Q2 2025. Despite this, revenues for the Ford Model e business unit increased by 105% to $2.4 billion.

On a positive note, Ford Pro's commercial-vehicle business generated $2.3 billion in EBIT with a margin of 12.3% on $18.8 billion in revenue. Ford Pro's paid subscriptions grew 24% year-over-year to 757,000.

The commercial unit and ICE business of Ford are performing well, but the company is facing challenges with tariffs. Ford has raised its forecast for the cost of tariffs on its business due to higher-than-expected levies on Mexico and Canada. The estimated tariff costs for the year rose to $3 billion. CEO Jim Farley aims for a $1 billion improvement in material costs as a partial offset to tariff expenses.

Ford's domestic production accounts for about 80% of the vehicles it sells in the U.S. However, reduced tariffs on Japan could give Asian rivals a cost advantage. For instance, a Michigan-made Ford Bronco might be undercut by a Toyota 4Runner to the tune of $10,000, while a Kentucky-built Ford Escape could cost $5,000 more than a Japan-made Toyota RAV4.

Looking ahead, Ford has revised its full year adjusted earnings before interest and taxes estimate to be between $6.5 billion and $7.5 billion. The company is determined to navigate the challenges and continue its journey towards electrification and digital transformation.

Ford's Q2 earnings falter under tariff pressure, with intriguing electric vehicle announcements on the horizon