Ford Made $50.2 Billion Last Quarter, But Tariffs And Rampant Recalls Are Eating Its Lunch

This must be Thursday. I never could get the hang of Thursdays, but here it is all the same; it’s July 31, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.

In this morning’s edition, it’s tariffs, tariffs, tariffs; Ford made a lot of money in the second quarter of 2025 and then lost a lot of money and plans to lose a lot more, BMW is staying the course, despite tariff pains, Carvana is killing it in the used car game, and Ferrari is holding on.

Ford’s been on a wild ride this year. It’s been a grand slam record for recalls — Ford has issued over 80 so far in 2025 — but those call-backs don’t seem to be affecting sales much, as Ford hit record revenue in the second quarter of 2025 to the tune of $50.2 billion. Thanks in part to the Blue Oval stretching its Friends & Family discount to all of its customers earlier this year and then expanding to the “zero-zero-zero” summer sales event that offers customers zero percent down, zero percent interest for 48 months, and zero payments for the first 90 days. That revenue didn’t mean much however, as Ford posted a $36 million second-quarter net loss thanks to recall costs and higher-than-expected tariffs. From Bloomberg:

Adjusted earnings before interest and taxes fell 22 percent to $2.1 billion. Revenue in the quarter rose 5 percent to a record $50.2 billion as U.S. sales improved.

“We recorded our fourth consecutive quarter of year-over-year cost improvement, excluding the impact of tariffs, building on progress we made last year when we closed roughly $1.5 billion of our competitive cost gap in material cost,” CFO Sherry House said in a statement. “Our balance sheet keeps getting stronger, further enabling our ability to invest in areas of strength. We are remaking Ford into a higher-growth, higher-margin and more durable business — and allocating capital where we can compete, win and grow.”

Ford now expects full-year adjusted EBIT of $6.5 billion to $7.5 billion. The company previously forecast $7 billion to $8.5 billion before withdrawing that guidance in May amid uncertainty around President Donald Trump’s tariffs.

Ford’s sales improved thanks to U.S. sales, but tariffs might make that more difficult. Ford CEO Jim Farley told Bloomberg that Trump’s tariffs actually favor foreign automakers over U.S. based ones. Ford adjusted its prediction for its 2025 tariff bill to $2 billion–$500 million more than previous predicted. Farley told Bloomberg that, as of now, auto tariffs will lead to cars like a Louisville-built Ford Escape costing $5,000 than a Toyota RAV4 built in Georgetown Kentucky. 

Changing emissions laws, tariffs on raw goods like steel and wildly different EV model demands all pose a challenge to automakers, but especially Ford, which keeps having to spend money on cars its already sold. So maybe stop doing that Ford? I’m having flashes of the 70s and 80s, when U.S. automakers were building fundamentally less attractive products and then moaned for protectionist policies to keep Americans buying their crap. It didn’t work out great then, but maybe it will now? 

Everyone is feeling the pinch of Trump’s tariffs, but especially German luxury automakers. Take BMW for example, which saw quarterly earnings drop by a third. The Bavarians are not shook however, believing robust production at its Spartanburg plant in South Carolina gives the automaker an edge over the likes of Mercedes-Benz, which has one plant in the U.S. producing only two SUVs and their electric counterparts, and Audi, which has no plants in the U.S. at all. BMW says while tariffs are a problem, they aren’t the only problem, according to Yahoo! Business:

The EBIT margin in BMW Group’s Automotive segment for the six-month period finished within the upper half of the range of 5% to 7% forecast for the year. However, BMW said the second quarter was impacted by higher customs expenses attributable primarily to additional tariffs in the US, but also to EU anti-subsidy tariffs on battery-powered electric vehicles imported from China. This, it said, reduced the EBIT margin in the Automotive segment for the second quarter by approximately 2 percentage points.

See America? You’re so vain, you probably think this earnings drop is about you, don’t you? 

It ain’t much, but selling used cars from a giant hokey vending machine is honest work. It’s also a business that will only benefit from all the chaos in the new car market caused by tariffs. Carvana posted a net income of $48 million this time last year, but that net income rose to $308 million in this past quarter. The company barely sold half a million used cars last year, but now leadership seems to be zeroing in on its goal of selling 3 million used cars. From Automotive News: 

Garcia said incrementally adding locations — as well as reducing miles traveled between points in its network — has been fundamental to its growth. Reconditioning and logistics are, operationally, the most intense areas of the business, he said.

“We’re adding additional locations to hold inventory and recondition inventory,” he said. “We’re making it so there’s less work per transaction. I think all of that aids growth. And we’re trying to push back value into the customer offering, which makes those stories customers tell even better.

“We feel like we’re on a very good path.”

Carvana sold about 9,300 more cars in 2025 Q2 over this time last year and gross profit from each vehicle sold is up as well. Used car prices are spiking in response to rising new car prices, so it’s a good time to make a little money moving old metal. Carvana even beat Wall Street’s revenue estimates, hitting $4.8 billion instead of $4.6 billion. If Carvana can keep the momentum up, it’ll be known as the little used car retailer that could. 

Things don’t look good for everyones favorite prancing pony. Ferrari suffered a 6.9% dip in its stock price once word of slightly weaker than expected growth hit the markets. Things aren’t disastrous for the automaker–far from it–but a year-over-year revenue bump of just 4% and an operating earnings increase of 6% just wasn’t the good news investors were waiting for. From Bloomberg:

Analysts at Jefferies said second-quarter revenue came in “a bit shy,” though profit was a touch higher than expected. Before the earnings were released, RBC analysts said a very strong set of results could lay the groundwork for Ferrari to raise guidance imminently.

Ferrari has largely avoided the fate of rivals such as Porsche AG, which cut guidance this week in response to US President Donald Trump’s trade war. Investors are banking on the Italian company’s ability to pass on any additional costs to wealthy customers due to the allure of the storied brand. Ferrari said it’s expecting reduced industrial costs in the second half.

Ferrari also intends to stay the course, as plans aren’t necessarily broke at the moment, so why fix it? Ferrari saw explosive growth in recent years so an OK quarter is not the end of the world, yet. 

Technically the famous labor union president disappeared fifty years ago yesterday, but you used to not be able to report people missing for 24 hours, so today is the day people realized, hey, Jimmy Hoffa isn’t around. He’s still missing, and every few years when an old mobster kicks the can he’ll whisper Hoffa’s final resting place into some FBI agents ear, ensuring a fed-led goose chase as his final act against the law enforcement system. Hoffa’s long gone, but his legend looms as large as ever. 

I haven’t gotten to do a Traffic Jam in a while, which means we definitely need a little prog rock to kick off this morning.