Investing.com -- Wolfe Research upgraded Ford Motor Co (NYSE:F) to “Peer Perform” from “Underperform” given the newly announced White House tariff relief that is expected to significantly benefit U.S. automakers and their suppliers.
The Trump administration issued an executive order that exempts all USMCA-compliant auto parts from the 25% sectoral tariff and offers rebates on non-compliant parts built into U.S.-made vehicles.
Wolfe analysts called the move “a big win for U.S. automakers,” particularly Ford and Tesla (NASDAQ:TSLA) Inc, which have high U.S. production and limited exposure to imported vehicles.
“The burden from parts tariffs will likely be de minimis for the first two years,” Wolfe wrote, adding that the rebate will be based on a vehicle’s MSRP, not cost of goods sold, increasing the effective relief.
Ford is expected to be among the biggest beneficiaries due to its U.S.-centric production model, with Wolfe estimating any future impact from a full 25% tariff on finished vehicles would be under $1 billion.
By contrast, General Motors Co (NYSE:GM) and Stellantis NV (NYSE:STLA) could face $2 billion to $5 billion in potential tariff-related costs.
While Wolfe remains cautious on Ford’s near-term fundamentals, including free cash flow pressure and peak earnings concerns, it no longer expects the company to underperform peers given its tariff advantage.
Wolfe’s view is improving on Tesla, as it said company could face no effective auto tariff burden through 2026 due to full domestic production and USMCA-compliant sourcing.