Ford F-150 Threatened by Tariffs

Ford Motor Co. (NYSE: F) F-150 assembly relies significantly on aluminum. The Wall Street Journal reports most rolls of aluminum come from smelters in Canada. Like many U.S. firms, Ford has tried to stockpile imported items it relies on. It will not say, but those inventories won’t last long. The company admits the shortage will be a challenge.

Ford sold 158,675 cars and light trucks in the United States during the first two months of the year, 59,301 of which were F-Series pickups. That is a mind-boggling 37% of its total. A sharp drop in F-Series sales lasting more than a few days would dent the company’s financials. If that extends for weeks, the effects would be staggering. Estimates for revenue from the F-150 sales range as high as $41.5 billion annually.

Ford’s stock has collapsed by 21% in the past year, and anxiety about tariffs has hurt it recently. At $9.55 a share, it trades close to its 52-week low. The company has a market cap of $36 billion. Even with a massive sell-off, the Tesla Inc. (NASDAQ: TSLA) market cap is $798 billion. Tesla’s global unit sales are well below that of Ford.

The Biden administration did Ford a significant favor. The tariffs on Chinese electric vehicle (EV) imports, which are as high as 100%, have protected the company from a wave of Chinese EVs. Last September, CEO Jim Farley said Chinese EV car companies are “an existential threat.” CFO John Lawler added, “These guys are way ahead of us.”

Ford’s future is already clouded by its EV failure in America. Although it has invested billions of dollars in this initiative, in the first two months of the year, it sold 7,326 EVs in the United States. Its EV flagship, the F-150 Lightning, had sales of 2,199.

Tariffs on Chinese EVs have helped to save Ford. Tariffs on aluminum from Canada could cripple it.

Why Buy a Ford F-150 When You Can Drive a Better Car for Less Money?

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