Ford has withdrawn its annual forecast and warned it expects a $1.5 billion hit to its earnings due to U.S. President Donald Trump’s tariffs. The company explained that the tariffs will significantly impact its profits, as the additional costs linked to imports from Mexico and China are estimated to reach $2.5 billion this year. Ford has also suspended automotive exports to China but continues importing some vehicles from there.

CEO Jim Farley noted that it’s still unclear how competitors will respond to the tariffs, but emphasized that automakers with a larger U.S. presence would likely have a significant advantage. Ford’s stock fell by approximately 2.3% in after-hours trading.

Ford has managed to reduce about $1 billion of this additional tariff-related cost through strategies like shipping vehicles from Mexico to Canada to avoid U.S. tariffs. The company had previously projected a 2025 earnings forecast of $7 billion to $8.5 billion, but that estimate didn’t account for the impact of tariffs. Ford’s Chief Financial Officer Sherry House said the company was still on track to meet its earnings goals, excluding the tariff effects.

While some competitors, such as General Motors, have adjusted their guidance to reflect tariff impacts, Ford has suspended its outlook until there is more clarity on retaliatory tariffs and consumer reactions to potential price hikes. This move was seen as bold given that other automakers have already updated their forecasts.

For the first quarter, Ford’s earnings per share dropped to 14 cents, much lower than the previous year’s 49 cents but still above analysts’ expectations. The company’s revenue declined by 5%, but it still exceeded analysts’ estimates, as a rush to purchase vehicles before potential price hikes boosted sales.

Ford’s struggles are not limited to trade issues; the company is also facing significant losses in its electric vehicle (EV) and software divisions. It has projected losses of up to $5.5 billion in 2025 for these areas, and since 2023, the company has sustained more than $10 billion in losses in its EV efforts. Ford also halted its expensive project to develop next-generation electrical architecture for its vehicles, a move CEO Farley called a significant cost-saving measure.

Ford’s commercial vehicle unit, Ford Pro, reported a 16% drop in first-quarter revenue, while its gasoline-engine segment earned $21 billion. Its EV and software division, Model E, generated $1.2 billion in revenue.