Ford says tariffs put $900 million dent in earnings: How Trump govt's last-minute rule change hit automaker

Carmaker Ford on Tuesday (local time) said that it had to pay $900 million more in tariffs than it expected last year due to a last-minute change by US President Donald Trump's administration to the tariff relief programme, BBC reported.

According to the report, the tariff relief programme was designed to help car companies offset the tariffs on imported goods. It allowed companies that import car parts but assemble vehicles in Washington to apply for credits to bring their tariff cost down. However, the last-minute change to the rule only increased Ford's expenses.

Ford hit with Trump tariff plans?

In December 2025, the Trump administration officials informed the carmaker that the relief policy would come into effect later than originally proposed. Due to this delay, Ford received fewer credits than it expected. The automaker's Chief Executive Officer (CEO), Jim Farley, said the company ended up paying about $2 billion in tariffs in 2025, which was nearly twice what it had expected. Farley blamed the higher cost of tariffs on the unexpected change to the tariff credits.

The higher-than-anticipated tariff bill for Ford highlights the ongoing uncertainty that carmakers are grappling with as they try to manage rising import taxes and push the government for relief or exemptions.

Ford shifts away from EV production

Separately, Ford previously announced that the company took a $19.5 billion hit after it decided to shift away from manufacturing electric vehicles (EVs). These charges also played a major role in the company’s $11.1 billion net loss in the fourth quarter. The company follows a calendar-year financial reporting cycle.

The automaker said that it is backing away from its plans to produce large EVs, citing regulatory changes under the Trump administration and weak demand. The company said that the business case for leaning heavily into EV production, specifically large-sized EV models, "eroded".

Instead, the company planned on investing in manufacturing profitable hybrid and gas-powered vehicles and smaller, more affordable EV models.

Ford's decision to alter its track came after a similar announcement was made by General Motors. In October 2025, the company announced its plan to roll back its EV ambitions as demand faltered and added that it would take a hit of $1.6 billion.

Ford quarterly results

According to a CNBC report, the auto giant reported its largest quarterly earnings miss in four years. The results were announced on Tuesday (local time). However, the company said that it believes that 2026 will be a recovery year. The automaker missed its earnings targets mostly because of the hit from unexpected tariff costs. It also expected to receive certain credits, which were delayed. As a result, Ford’s fourth-quarter profit (EBIT) fell from an expected $7.7 billion to $6.8 billion.

Ford’s CFO Sherry House also said earnings were hurt by fires at a Novelis aluminium plant in New York last year. The plant, which supplies aluminium for Ford’s highly profitable F-Series pickup trucks, is not expected to fully reopen until mid-year, affecting production and profits.

Ford lags behind BYD in global sales for the first time

The company suffered another blow after China's BYD took over Ford in terms of global sales for the first time, Bloomberg reported. The US automaker's global vehicle shipments fell nearly two per cent last year to just under 4.4 million vehicles, which was lower than BYD’s 4.6 million sales. This means BYD has now become the sixth-largest automaker in the world, moving ahead of Ford in global rankings.

Although Ford’s sales increased in the United States, the company lost market share in Europe and especially in China, where local brands like BYD, Xiaomi, and Geely are gaining customers by offering more affordable and technology-focused electric vehicles, taking sales away from foreign companies like Ford.