Automotive
Due to the escalating cost pressures within the automotive industry, Ford has increased prices on three of its Mexico-produced models, effective May 2. The Mustang Mach-E, Maverick, and Bronco Sport will all see price hikes of up to $2,000 on select trims. The decision comes as a response to a combination of routine mid-year pricing adjustments and newly implemented tariffs under former President Donald Trump’s trade policies.
This adjustment positions Ford as one of the first major automakers to revise its pricing strategy in direct response to the revived tariff agenda, which has thrown the industry into a state of uncertainty. While Ford expects trade-related costs to reach approximately $2.5 billion for the 2025 model year, the company anticipates mitigating that impact by around $1 billion through various cost-cutting measures.
A spokesperson for the company emphasized that not all of the tariff costs are being passed on to consumers, but confirmed that vehicles built after May 2 and arriving at dealerships in late June will reflect the new prices. Despite the increases, Ford is still running discount programs through the July 4th weekend to help maintain showroom traffic.
Trump’s tariffs, aimed at boosting domestic manufacturing, have caused disruptions throughout the auto sector. Automakers have been forced to re-evaluate production strategies, with some even pausing operations. After pressure from the industry, the White House eased tariffs on auto parts, offering credits for components made in the U.S. to avoid double-taxing raw materials. However, a 25% tariff on the roughly 8 million vehicles imported into the U.S. annually remains in effect.
Analysts have warned that if such tariffs stay in place, U.S. auto sales could dip by more than 1 million vehicles annually. Ford, however, is in a relatively stronger position than some competitors due to its substantial domestic production footprint. About 79% of the vehicles Ford sells in the U.S. are built domestically, compared to GM’s 53%, according to Barclays.
Still, Ford is not immune. The Maverick pickup, one of its most affordable and sought-after models, is manufactured in Mexico. This leaves Ford in a difficult position as price-sensitive segments bear the brunt of the tariff impact. Meanwhile, GM has indicated it faces $4 billion to $5 billion in new costs but aims to offset up to 30% of those through operational changes.
Imports from China and South Korea are also under scrutiny. GM, for instance, faces about $2 billion in costs related to South Korean imports. Ford has not disclosed the specific financial impact of its imports from China, though the company has historically relied on that supply chain for select models and components.
The broader industry is bracing for more adjustments. Automakers like Porsche and Audi have signaled that price increases are likely if trade policies do not shift. On the other hand, BMW is reportedly more optimistic, expecting U.S. tariffs to ease later this summer.
For now, Ford’s decision to adjust pricing serves as a bellwether for what’s to come. As trade tensions continue to shape the automotive landscape, car buyers may need to brace for further sticker shock, particularly on entry-level models that are no longer shielded from global economic currents.
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