Maranello, Italy — Luxury sports car manufacturer Ferrari reported a notable rise in first-quarter profits, attributed to strong demand for custom vehicles. However, the company also cautioned that recent trade policies instituted by the U.S. government could pose risks to future earnings.

Ferrari’s net profit for the first three months of 2025 reached 412 million euros (approximately $466.3 million), marking a 17% increase compared to the same quarter last year. Financial analysts had predicted a profit of around 410 million euros, highlighting the firm’s unexpected financial strength.

CEO Benedetto Vigna exuded optimism, stating, “Another year is off to a great start.” He noted that despite minimal growth in shipments year over year, key performance metrics showed double-digit increases, driven by a favorable product mix and ongoing demand for vehicle personalization.

Looking ahead, Vigna indicated potential challenges, specifically related to the U.S. government’s recent tariffs on European automobile imports. Ferrari’s report mentioned that these tariffs could lead to a decline of up to 50 basis points in profitability margins for the year.

The automotive sector is experiencing significant upheaval due to trade policies under the current administration. Several European automakers have reported declining profits in this earnings cycle, with some companies even withdrawing or revising their financial forecasts as a result of these tariffs.

In early April, a 25% tariff on car imports into the U.S. was implemented. Although the administration has made recent attempts to alleviate some tariff burdens, such as signing an executive order aimed at preventing additional duties from compounding, the effects of existing tariffs continue to ripple through the industry.

To mitigate the financial impact of these trade policies, Ferrari announced in late March a decision to raise prices on select models by about 10%. This price adjustment could effectively add upwards of $50,000 to the cost of a typical Ferrari.

The stock of the luxury car brand saw a slight dip, trading approximately 0.8% lower during midday hours in London. As Ferrari navigates this challenging landscape, its ability to balance production costs while maintaining strong sales will be critical in the coming months.