This year has been a positive one for Ford (F +0.39%), as the U.S.-based automaker has seen its stock rise 31% since the start of the year. This increase comes despite tariff uncertainties from Washington and a shift in federal support for electric vehicle (EV) manufacturers.
Ford is taking a more measured approach, reducing its costly EV investments and focusing on what is working. The company is leaning into its hybrid gas- and battery-powered vehicles, as well as commercial vehicles and software solutions.
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With the stock priced below $14 per share, is Ford a good buy for investors? Let's look under the hood to find out.
NYSE: F
Key Data Points
Tariff impacts on Ford
The U.S. auto tariff policy has undergone significant changes this year, with substantial increases in duties on imported vehicles and key automotive parts.
Earlier this year, President Donald Trump announced a 25% tariff on imported passenger vehicles and light trucks. At the same time, tariffs on key components, including engines and transmissions, hiked manufacturing costs even for domestically assembled vehicles that rely on global supply chains. As a result, the effective tariff rate on imports has risen to multi-decade highs, forcing automakers to raise prices, shift production, or absorb extra costs.
Tariffs have had a mixed impact on Ford. In the third quarter, Ford's net earnings before interest and taxes (EBIT) impact related to tariffs was approximately $700 million. This net impact calculation included the effect of preferential tariff treatment and import adjustment offset amounts.
However, recent tariff policy changes have been more favorable to Ford, particularly due to credit tied to large U.S. manufacturing volume, which allows it to offset tariffs on imported auto parts needed for its production. CEO James Farley noted that tariffs have helped level the playing field for imported medium- and heavy-duty trucks, a positive for Ford because it builds most of these trucks in the United States.
Ford is shifting its priorities
In other news, Ford is changing its approach to EVs relating to its Ford Model e segment. It had ramped up its EV efforts in recent years. However, the market didn't develop as expected, and it has suffered significant losses. This year, its Model e segment has lost $3.6 billion over nine months. As a result, it is adjusting its strategy to focus on cost efficiency and better matching supply with current customer demand.
The company will still develop EVs, but it is narrowing its focus to achieving the lowest-cost platform in the North American market for affordable vehicles, starting at around $30,000. It plans to launch its Universal EV Platform (UEV) in 2027.
In the meantime, Ford will continue to expand its hybrid offerings across its lineup, including the F-150 and extended-range hybrid options. Regulatory compliance standard changes are expected to eliminate compliance headwinds in 2026, allowing Ford to optimize its mix of internal combustion engines (ICEs), hybrids, and EVs.
The automaker is also expanding its line of commercial vehicle, which it sells to commercial, government, and rental customers. It has experienced solid growth in its electric vehicle sales, due to its introduction of the E-Transit Custom and E-Transit Courier in Europe. The adoption of Ford's commercial vehicles is driven by integrated software and services that optimize and maintain fleets, including telematics and EV charging solutions.
Is Ford stock a buy?
The automaker industry is quite competitive and cyclical. Ford faces intense competition from General Motors, Toyota, and EV-makers like Tesla and Rivian. It also faces vulnerabilities if consumer demand weakens, which could limit its vehicle sales, making it a cyclical stock.
Ford offers a solid dividend yield of 4.6% to shareholders. However, the stock's total returns have been lackluster. When you account for its dividend and the impact of reinvesting that dividend over time, Ford stock has returned investors a meager 4.3% annually over the past decade.
Ford is making moves and could benefit from the tailwinds created by tariffs, given its more U.S.-based manufacturing base. That said, I find the automaker space highly competitive and think investors can find better growth opportunities elsewhere in the market.
