What auto execs had to say about tariffs during earnings

Sick of the word “tariff” yet? Auto execs sure seem to be.

President Donald Trump’s proposed 25% tariff on imports from Mexico and Canada, now delayed until next month, have prompted alarm in the automotive industry, which would be among the most significantly impacted because of long-standing free trade policy that has created a closely connected production ecosystem between the US and its northern and southern neighbors.

Executives had plenty to say about the potential impacts of tariffs during the industry’s Q4/2024 earnings calls.

Tariff talk: On Ford’s earnings call, CEO Jim Farley expressed confidence that the automaker would be well-positioned to weather “a few weeks of tariffs,” given that Ford’s production is heavily US-based and because Ford could “make sure nothing crosses the border for a couple of weeks.”

But it would be a different story if tariffs were in place for an extended period of time. Such a scenario “would have a huge impact on our industry with billions of dollars of industry profits wiped out and adverse effect on the US jobs, as well as the entire value system in our industry,” Farley warned. “Tariffs would also mean higher prices for customers.”

Ford’s US plants don’t have much extra capacity to shift production from Mexico and Canada, Farley said. “We would have to make some major strategy shifts in the US, build new plants, etc., if this persists. Obviously, it’s a devastating impact.”

Conversations Ford has had with White House and congressional officials, Farley said, have provided reassurance that “they are committed to strengthening, not weakening, our nation’s auto industry.”

On GM’s earnings call, executives indicated that the automaker is taking steps to prepare for their implementation.

“With respect to possible tariffs, we are working across our supply chain, logistics network, and assembly plants so that we are prepared to mitigate near-term impacts. Many of these actions are no-cost or low-cost,” CEO Mary Barra said. “What we won’t do is spend [a] large amount of capital without clarity.”

CFO Paul Jacobson said the company has “multiple playbooks that we have been working on to make sure that we can respond [to] or even anticipate some of those moves.” Per Reuters, Jacobson said that GM has been working to ship vehicles from Mexico and Canada to the US to get ahead of the tariffs’ possible implementation.

Meanwhile, Tesla CFO Vaibhav Taneja said that although the EV maker has “tried to localize our supply chain in every market,” Tesla is “still very reliant on parts from across the world for all our businesses.”

“Therefore,” he added, “the imposition of tariffs, which is very likely, will have an impact on our business and profitability.”

Finally, the numbers:

• General Motors reported annual profits of $6 billion. Adjusted EBIT came in at $2.5 billion for the quarter and $14.9 billion for 2024. GM is forecasting adjusted EBIT of between $13.7 billion and $15.7 billion this year.
• Tesla reported $7.1 billion in profits in 2024, down YoY amid a slump in EV sales. Adjusted EBITDA was $4.9 billion in Q4 and $16.6 billion for the year.
• Ford reported full-year profits of $5.9 billion; adjusted EBIT was $2.1 billion for the quarter and $10.2 billion for the year. The automaker’s guidance calls for lower adjusted EBIT in 2025. Ford reported a $5.1 billion loss in its EV business in 2024.