Goldman Sachs Cuts Auto Sales Forecast, Downgrades Ford’s Stock

Goldman Sachs (NYSE: GS) has revised its 2025 automobile sales forecast, reducing it by nearly one million units. This adjustment is attributed to the increased costs stemming from tariffs initially imposed by the previous administration. The investment bank predicts that these tariffs will elevate the net prices of new vehicles in the U.S. by $2,000 to $4,000 over the next 6 to 12 months, potentially dampening consumer demand.

As a result, automakers are grappling with the challenge of passing on these additional costs to customers. In light of these developments, the investment bank has downgraded Ford’s (NYSE: F) stock rating from ‘buy’ to ‘neutral’, citing intensified global competition and weakened consumer interest.

Additionally, the bank adjusted its global auto production estimates for the years 2025 and 2026. In response, Ford is offering discounts on various models to stimulate sales before the anticipated price hikes take effect.

How Automakers are Preparing for Tariffs Impact on Vehicle Pricing

Automakers are navigating a challenging landscape as they respond to the financial impact of tariffs on vehicle pricing. BMW is considering adding shifts at its Spartanburg plant to bolster production capabilities in the face of potential supply chain disruptions.

Meanwhile, South Africa is exploring the implementation of incentives for its automotive sector to mitigate the adverse effects of tariffs.

In a strategic move, electric vehicle manufacturer Polestar (NASDAQ: PSNYW) is targeting dissatisfied Tesla (NASDAQ: TSLA) owners with attractive discounts, aiming to capture a segment of the market that may be seeking alternatives.

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Ford Stock Brief

Ford’s stock has experienced notable fluctuations following the tariff-related adjustments. The stock opened at $9.10 and was trading at $9.085 by mid-morning on April 10, 2025, after closing at $9.50 the previous day. The stock’s day low was recorded at $9.03, with a high of $9.28.

Key financial metrics for Ford include a dividend yield of 7.83% and a market capitalization of $36.13 billion. The company’s price-to-book ratio stands at 0.8031, indicating potential undervaluation.

In contrast, GM’s stock opened at $44.16 and was trading at $43.465, with a day low of $43.18. GM’s stock has a recommendation of ‘buy’, reflecting optimism about its forward EPS and growth prospects. The stock is currently valued below its book value, suggesting room for appreciation.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.