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JPMorgan cut its price targets on General Motors and Ford Motor Co., warning that newly proposed tariffs of 25% could wipe out the bulk of their global profit.

The former U.S. president said Wednesday his administration would impose a 25% tariff on all foreign-made vehicles from April 2.

Analyst Ryan Brinkman lowered his price target on GM shares to $53 from $64, while maintaining an Overweight rating. He also cut Ford’s target to $11 from $13, reiterating an Overweight recommendation.

“We estimate as much as a $14 billion cost to General Motors (amounting to essentially all of its global profits) and a $6 billion cost to Ford (amounting to ~75% of global profits) in the event the burden of tariffs were fully borne by automakers,” Brinkman wrote in a note Thursday.

GM manufactures 52% of its U.S.-sold vehicles domestically, with 30% coming from Canada and Mexico and 18% from other regions. Ford produces 77% in the U.S., 21% in Canada and Mexico, and 2% elsewhere.

Shares of GM dropped 6% in pre-market trading Thursday, extending Wednesday’s 3% loss. Ford initially fell after Trump’s announcement but pared losses the following morning.

Brinkman said GM reported about $157 billion in North American revenue for 2024, of which JPMorgan estimates roughly $140 billion relates to U.S. new vehicle sales, excluding Mexico and Canada, OnStar, GM Defense, and other business lines.

“This leads us to estimate GM imports ~$56 billion of vehicles annually from Mexico and Canada ($140 billion * 40%), which after reducing for the ⅓ value of content originating in the U.S. (including all battery cells in the case of electric vehicles) may amount to ~$38 billion ($56 billion * ⅔), which would then be subject to a ~$10 billion tariff ($38 billion * 25%). That is for finished vehicles,” he wrote.

JPMorgan estimates GM’s share of imported vehicle parts amounts to an additional $4 billion in tariff exposure, based on its estimated 17% share of U.S. vehicle production. Combined, the $14 billion tariff bill would effectively match the $12.5 billion to $14.5 billion of global EBIT GM is guiding for 2025 — before accounting for tariffs or the potential loss of EV subsidies.

For Ford, the hit would be smaller. JPMorgan estimates that only around 10% of the vehicles it sells in the U.S. are imported from Mexico and Canada. Of the $125 billion Ford reported in U.S. revenue in 2024, about $110 billion is likely tied to new vehicle sales, suggesting around $11 billion in imports from the region. Adjusted for lower average selling prices on imported models like the Bronco Sport, Edge, Maverick, and Mustang Mach-E, the effective import value drops to $9 billion — implying a $2 billion tariff on finished vehicles.

Brinkman added: “We gross down to $9 billion, given our estimate that the average selling price of vehicles Ford imports from Canada and Mexico … transacts for materially less than company average (as opposed to General Motors for which we estimate import ASPs … are similar to the company average).”

Adding a $4 billion estimated tariff on imported parts, the total impact to Ford could reach $6 billion — or 75% of the $7.75 billion EBIT it expects in 2025, and around 60% of the $10 billion JPMorgan views as a normalized earnings level. That compares to a roughly 100% tariff burden on GM’s 2025 guidance and JPMorgan’s normalized estimate.

Brinkman said he still views Ford shares favorably despite the threat, citing structural and management improvements.

“We find Ford shares attractive given valuation only roughly in line with history despite a number of significant positives,” he wrote, pointing to a refreshed vehicle lineup, the revamped F-150, and efforts to streamline international operations.

“We also like Ford’s leadership team, which we expect to bring a renewed focus on launch and warranty execution,” Brinkman added.

Tesla is less directly exposed, with all vehicles sold in the U.S. built domestically. Still, CEO Elon Musk cautioned late Wednesday the company wouldn’t be entirely insulated, as some components are sourced from abroad.