Ford Is a Winner in Auto Tariff Battle

The Trump administration has imposed 25% tariffs on cars made outside the United States. Of the largest car companies, Ford Motor Co. (NYSE: F) makes the largest percentage of its cars in America. Bloomberg estimates this at 21%. The tariffs also apply to auto parts.

Ford’s major rivals have a much smaller percentage of vehicles made on U.S. soil. GM’s is 46%, and Toyota’s is 51%. Overall, the consumer will be hammered. Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, told the news service, “There are very few winners. Consumers will be losers because they will have reduced choice and higher prices.”

The math is complex. It is unclear how many assembled vehicles large car companies have in inventory. The average car dealer usually has an inventory of vehicles that will last 60 days. The term for this is “days on a lot.” Some BMW and GMC products sell slowly, meaning they will have fewer inventory shortages on paper. Toyota and Lexus models sell quickly.

Ford may also be able to raise prices. Demand for new cars, in general, should stay high as inventory shrinks. As was the case during the COVID-19 pandemic, when supply chains lowered national new car inventory, dealers pushed what they sold above MSRP levels, even though manufacturers warned them not to.

Ford needs a boost. Sales of its electric vehicles have been weak. The company will lose between $5.0 billion and $5.5 billion on this part of its business in 2025. However, if it is one of the rare companies with enough cars to ship to dealers and then into the hands of consumers, its overall unit sales should jump

Ford’s stock is down 17% in the past year. The share price should increase if Ford can sell cars when its competitors cannot.

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