'Got to keep the vehicles affordable': US-made cars still heavily dependent on foreign supply chain, says Ford CEO

Time of India

01-05-2025

Jim Farley, President and chief executive officer of Ford (File photo)
Ford CEO Jim Farley
has revealed that, despite the automaker's deep manufacturing roots in the United States, Ford remains heavily reliant on imported components—some of which are simply not available from domestic suppliers.
In an interview with
CNN
, Farley warned that President Donald Trump's newly imposed tariffs on auto parts—set to take effect Saturday—could significantly raise production costs, forcing automakers to pass those increases on to consumers. 'We have to import certain parts,' Farley said. 'A lot of parts, like fasteners, washers, carpet … are just not available. We can't even buy those parts here.'
While the White House has pushed for domestic sourcing, Farley emphasized that economic and logistical realities still favor global supply chains.
He estimated that around 20 to 25 per cent of the parts in Ford's top-selling models, including the F-150, come from abroad. Even where domestic manufacturing is possible, it is often far more expensive. 'The affordability of parts is a really important thing for America because we've got to keep the vehicles affordable,' Farley said.
Ford currently manufactures more of its vehicles in the US than any automaker except Tesla, yet Farley acknowledged that full domestic self-sufficiency isn't feasible.
'Yes, we want to make them like Ford does in the US, but we also want to make the vehicles affordable that are built in the US,' he said.
'Let me take you through the math': Ford CEO on how tariffs could impact vehicle pricing
To cushion the impact of rising costs, Ford is extending its 'employee pricing' promotion through July 4. Still, Farley warned that once the promotion ends, customers could see higher sticker prices. 'We want to keep our prices competitive and low,' he said.
The Trump administration's tariff strategy includes a 25 per cent duty on imported vehicles and new levies on US-built cars if more than 15 per cent of their parts come from foreign sources.
While some relief was announced earlier this week, analysts expect only a modest reduction in cost increases.
According to estimates from Anderson Economic Group, the tariffs could raise production costs by $3,000 to $12,000 per vehicle. Recent policy adjustments may trim that burden by $900 to $2,500, but the overall financial pressure remains substantial.
Speaking at Ford's Kentucky Truck Plant on Wednesday, Farley called for continued collaboration with policymakers.
'The changes this week to the tariff plans will help ease the impact on automakers, suppliers, and consumers,' he said. 'But we need to continue working with the administration on a comprehensive policy strategy… We are not there yet.'
Although US President Trump claims his tariffs are incentivizing automakers to open new factories in the US, industry data does not show a marked uptick in new investment. Ford's ongoing projects in Tennessee and Ohio—focused on electric vehicles—began under the Biden administration and are backed by federal loans.
Farley said Ford remains in close contact with Trump's team. 'We recognize how important this moment is to get this all right and try to figure it out together,' he said. 'It's going to take a little time.'
Stay informed with the latest
business
news, updates on
bank holidays
and
public holidays
.
AI Masterclass for Students. Upskill Young Ones Today!– Join Now