Bulletin: Ford Motor Co.'s Rating Cushion Remains Tight As Tariff And Warranty Headwinds Test Its Cost Discipline

This report does not constitute a rating action. NEW YORK (S&P Global Ratings) July 31, 2025--S&P Global Ratings today said higher tariff-related costs (including a gross impact of $3 billion for 2025) and ongoing warranty costs will raise execution risk for Ford Motor Co. (BBB-/Negative/A-3) despite improved cost management in the first half ending June 30, 2025. After incorporating these cost headwinds, net of offset and recovery actions (roughly $1 billion in 2025), we now expect the company?s EBITDA margins will be in the 4.5%-5.0% range in 2025 (largely due to nonrecurring charges), 6.5%-7.0% in 2026 and 7.5%-8.0% in 2027. We expect free operating cash flow (FOCF) to sales of about 0.5%-1.5%, which is below the median level of around

...July 31, 2025 This report does not constitute a rating action. NEW YORK (S&P Global Ratings) July 31, 2025--S&P Global Ratings today said higher tariff-related costs (including a gross impact of $3 billion for 2025) and ongoing warranty costs will raise execution risk for Ford Motor Co. (###-/Negative/A-3) despite improved cost management in the first half ending June 30, 2025. After incorporating these cost headwinds, net of offset and recovery actions (roughly $1 billion in 2025), we now expect the company's EBITDA margins will be in the 4.5%-5.0% range in 2025 (largely due to nonrecurring charges), 6.5%-7.0% in 2026 and 7.5%-8.0% in 2027. We expect free operating cash flow (FOCF) to sales of about 0.5%-1.5%, which is below the median level of around 2% among automakers we rate in the '##+', '###-', and '###' categories. We will assess Ford's long-term competitive position and profitability relative to rated peers in the '###-' and '##+' categories (including Geely Automobile Holdings...

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