To the victor go the spoils is a popular refrain for contest winners to tell losers who complain after the match.
The political version of this saying goes something like, elections have consequences.
Over the past few months, President Donald Trump’s supporters have used this phrase to defend his reformation edicts as he pursues the agenda on which he campaigned.
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For the business community, those consequences have hurt a bit.
Trump’s pursuit of a trade war has especially roiled small businesses, which lack the capital to maneuver their foreign supply chains the same way large companies can.
The NFIB Small Business Optimism Index fell by another 1.6 points in April to 95.8. It was the second consecutive month the index ticked below its 51-year average of 98. Meanwhile, the NFIBs Uncertainty Index decreased slightly to 92, but it remains well ahead of its historical average of 68.
So, uncertainty for small businesses is much higher than historical averages, and optimism is much lower.
Meanwhile, large corporations are also suffering from the uncertainty, with the charts for the three major indices resembling a bitcoin price chart with all of the volatility and wild 500-point intraday swings.
The trade war has been a short-term boon for many automakers as buyers look to snap up new vehicles before the taxes take effect.
This is true for Ford F, but the Trump administration’s policies also create a pain point for the Big 3 U.S. automaker.
Ford sales were strong in May, except for one key area.
Image source: Ford
Ford reports another strong month of car sales
Ford released its May car sales report on Tuesday, June 3.
The company reported a 16.3% increase in year-over-year May sales to 220,959. The increase was mainly driven by its biggest, most gas-guzzling models.
Ford SUVs saw a 23% sales increase to 83,000, led by the Explorer, which had over 20,500 sold in the month. Meanwhile, Ford Trucks saw an 11.2% increase to 121,354 units sold.
Overall, Ford has sold 930,925 vehicles to date, a 6.1% year-over-year increase, despite the specter of tariffs upsetting the whole apple cart.
However, one area for the company that wasn’t in the green was electric vehicle sales.
Ford sold 25% fewer electric vehicles this month than last, accelerating a declining sales trend for a segment of the company’s brand that had been experiencing growth.
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Ford’s safety recall of its E-Transit Chassis Cab vehicles due to a potential battery defect certainly didn’t help sales during the period. E-Transit saw a 93% decline in sales in the month.
The Ford F-150 Lightning electric model saw a 42% decline in sales to 1,902. Year to date, Lightning sales are down more than 17%.
The Mustang Mach-E was the lone electric vehicle model to see sales growth, with an 11% increase to 4,274. In fact, the Mach E is inching towards overtaking its non-electric brother in sales.
Mustang sales were down 3% in the month to just over 5000 sold.
Ford’s EV problem is getting worse
Even before President Donald Trump took office, Ford struggled with its EV segment.
President Joe Biden and his Democrat predecessor saw climate change as an existential crisis and electric vehicles as a key to combatting that crisis. Obama initiated the $7,500 EV tax rebate during his term, and Biden expanded the program.
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While it hasn’t been a big subject for Trump this time around, he did call some of the rhetoric around climate change a hoax when he first ran for president back in 2015.
But Ford already announced last year that its EV division would lose about $5 billion in 2024, and that was wth the full support of the White House. The $1.5 billion the unit lost in the third quarter alone was actually an 8% improvement year over year.
The truth is, EVs just aren’t as popular in the U.S. as they are in China and Europe.
However, hybrid vehicles, which are mainly ICE engines with a small battery backup, are gaining in popularity.
Ford hybrid sales increased nearly 30% to 22,719 vehicles in May. Year to date, hybrid sales are up more than 31%.
