The automotive industry is in trouble. We have mentioned this many times in our columns. For example, with Stellantis: the engine keeps stalling; with Volvo Car: yet another sign of the automotive industry's weakness or with Tesla: not all wolves of Wall Street are welcomed the same.

Ford has reported Q1 figures that are significantly down y-o-y, although broadly in line with analysts' expectations. EPS fell by two-thirds, sales volumes dropped by 7% to 971,000 units, and revenues declined by 5%. However, Ford is trying to be reassuring, explaining that the drop in sales is due to the closure of certain plants linked to the launch of new models and measures to rebalance inventories.

However, Ford is not making any bold predictions. Its forecasts have been slashed due to US pricing policy. The group estimates that tariffs will knock off around $1.5bn from its EBIT. Tariff barriers of 25% on automotive components came into force last Saturday. Manufacturers can only obtain minimal reductions on these, for example a maximum of 3.75% for a vehicle produced in the US.

However, as things stand Ford is not the automaker in deep trouble. Its valuation, at almost 10x this year's profits, is higher than that of most of its competitors.

Ford has been working to renew its vehicle range, which now appears to be highly competitive.

In addition, losses related to electric vehicles could decline in the future in a more favorable regulatory environment in the United States, marked by the expected relaxation of emissions standards by the Trump administration and the phasing out of the zero-emission vehicle (ZEV) credit system administered by the California Air Resources Board (CARB). These developments should reduce the need for subsidies for internal combustion engines, particularly for legal, regulatory and compliance reasons. Last year, the loss for each electric vehicle produced amounted to a staggering $47,000.

Also noteworthy are the company's bold measures to adapt its international operations, particularly in Europe and South America, as well as its success in turning around operations in several geographic areas, most notably China, which was previously one of the giant's main weak points. In this regard, JPMorgan analysts are optimistic and believe that this should free up capital to invest in initiatives that are well valued by the market, including massive returns to shareholders or the repayment of the colossal debt, which now exceeds $130bn.

Ford has a pretty solid management team to help make these decisions. CEO Jim Farley took the reins during the Covid pandemic. He came in with measures that seem to have worked pretty well so far.

However, like its peers, Ford is facing a market in crisis. Interest rates, inflation, competition from Asia, the weakness of the electric vehicle market (see Tesla's mediocre results) and, now, US trade policy are putting unprecedented pressure on vehicle manufacturers.