Aston Martin Limits Exports to the US and Considers Adjusting Prices to Offset Tariff Impact

Recently, British luxury car brand Aston Martin announced its Q1 performance, with total revenue of GBP 233.9 million, a 13% YoY decline, primarily due to lower deliveries of limited-edition car models.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) recorded a loss of GBP 4.4 million, significantly below market expectations of a GBP 13 million profit. This outcome was driven by weak product mix performance and increased investment in vehicle quality, although operating expenses decreased by 13% YoY, partially offsetting these unfavourable factors. Adjusted earnings before interest and taxes (EBIT) loss widened to GBP 64.5 million, compared to a loss of GBP 57.1 million in the same period last year. Adjusted pre-tax loss was GBP 79.8 million, lower than the GBP 110.5 million loss in the same period last year and also below analysts' average expectation of GBP 89 million.

Aston Martin's total wholesale volume in Q1 was 950 units, a slight 1% YoY increase, with core car models growing 4% to 936 units, while limited-edition car models declined sharply by 69% to 14 units.

Aston Martin expects performance to improve in the next quarter and has confirmed its full-year performance outlook.

Aston Martin CEO Adrian Hallmark stated that the company will share the additional costs of US tariffs with customers, absorb its existing inventory in the US, and limit shipments to the US to mitigate tariff impacts.

Additionally, the company is considering further measures to address the evolving tariff situation and plans to announce possible pricing strategy adjustments in mid-to-late May. Hallmark said, "We will not pass on the full impact (of tariffs) to customers, nor will the company bear it all; instead, we will adopt a balanced approach."

He noted that US dealers have sufficient inventory to sustain market supply until early June.

Aston Martin recently adjusted its production plan to ship more cars to the US before tariffs take effect, enabling the company to assess tariff negotiation progress and competitor responses before adjusting its strategy. It is reported that over one-third of the company's revenue comes from the US market.

Analysts stated that the ample car inventory at US dealers gives Aston Martin an advantage over its competitors.

They also said, "Maintaining the full-year performance guidance unchanged and slightly exceeding free cash flow expectations are the core highlights of Aston Martin's earnings report, which is expected to receive positive market feedback."

Buoyed by this news, Aston Martin's share price rose by 4.2% at one point, although it has fallen by more than one-third year-to-date.

Against the backdrop of European automakers generally lowering their performance expectations due to tariff impacts, Aston Martin's quarterly financial report emerged as a rare bright spot. While Stellantis, Porsche, Volkswagen, and Mercedes-Benz have all withdrawn or lowered their expectations amid tariff volatility, the company has maintained its full-year targets unchanged.

However, since its listing in 2018, this high-end sports car manufacturer has struggled to achieve breakthroughs, resulting in years of losses and swelling debt, prompting the company to conduct multiple equity financings and layoffs.