Ford Motor Company (F) shares fell 1.1% on Tuesday, closing at $14.61, after a Reuters report revealed that the automaker must seek U.S. government approval to continue importing its China-built Lincoln Nautilus SUVs. The stock traded between $14.54 and $14.83 during the session, reflecting investor unease over new regulatory hurdles tied to connected-vehicle technology.
The development adds fresh uncertainty to Ford's supply chain, just weeks before the company is expected to report its second-quarter earnings. General Motors shares also edged lower, suggesting broader pressure on major automakers, but Ford faced unique headline risk from the software rule.
According to Reuters, Ford has requested authorization from the U.S. Commerce Department to import the 2027 model-year Lincoln Nautilus vehicles, which are assembled in China. The issue stems from the fact that Ford's software is developed in the United States but loaded into the vehicles in China, triggering new federal rules governing connected cars. The software restrictions apply to 2027 model-year vehicles, while hardware-related rules will take effect for 2030 models.
Investors are particularly sensitive to regulatory uncertainty in supply chains, as even minor disruptions to a single product line can raise concerns about compliance costs, potential model delays, and Ford's ability to navigate escalating U.S.-China tech tensions. Ford plans to begin importing the 2027 Nautilus in January, leaving only a few months to secure the necessary approval. Reuters noted that the hardware rules could pose even greater challenges for automakers than the software requirements in the near term.
Despite the regulatory headwind, Ford's underlying business fundamentals remain a key focus for bulls. The company recently raised its full-year adjusted EBIT target to a range of $8.5 billion to $10.5 billion, while projecting adjusted free cash flow of $5.0 billion to $6.0 billion. In the first quarter, Ford Blue, the core gas and hybrid division, generated $1.9 billion in EBIT, while Ford Pro, the commercial unit, delivered $1.7 billion in EBIT.
However, these profitable segments must offset losses from Ford's electric vehicle (EV) division, Model e, which posted a $777 million EBIT loss in the first quarter. The company expects Model e losses to reach $4.0 billion to $4.5 billion for the full year. Ford's outlook assumes flat industry pricing and does not account for a significant U.S. economic downturn, meaning any drop in car demand or increase in incentives could pressure results.
Ford shares are trading near fair value, with a dividend yield of 4.11% and a quarterly payout of $0.15 per share, which supports income-oriented investors. However, analyst sentiment remains cautious. Among 13 analysts, the average 12-month price target is $14.62—essentially unchanged from current levels—with only two Buy ratings, 10 Holds, and one Sell. The next major catalyst for Ford will be its second-quarter earnings report, currently unconfirmed for July 29 after the market close. Investors will be watching for any shifts in guidance, updates on EV losses, Ford Pro margins, and progress on the connected-vehicle authorization.
