From James Bond to budget cuts: Tariffs put pressure on Aston Martin

Aston Martin has warned investors to brace for deeper-than-expected losses this year, the latest blow to Britain’s glamorous but persistently unprofitable carmaker.

Ahead of its third-quarter results on 29 October, the company said it now expects a full-year loss even greater than the previous estimate of £110 million or €130mn, forcing yet another reset for a brand that has been fighting to regain its footing.

The guidance cut jolted investors, sending shares tumbling about 8% on Monday morning. The stock has dropped 29% since January and 31% over the past year, a reflection of traders’ frustration at Aston’s performance.

"Aston Martin has been caught up in a cocktail of headwinds. As an automaker that manufactures outside of the US, it has been hit painfully by Trump’s tariffs, particularly when combined with the broader challenging macro backdrop," said Victoria Scholar, head of investment at Interactive Investor.

British-built cars have been hit hard because Aston Martin has no alternative American manufacturing base, unlike other companies that are able to avoid the brunt of the tariffs by boosting US production.

The group is also grappling with weakness in key markets, particularly North America and China, where the slowdown in luxury consumption has minimised demand for high-priced sports cars. Further clouding the outlook is the US federal government shutdown, adding another layer of uncertainty for exporters.

Aston Martin cut about 5% of its workforce in February as losses deepened, part of a wider attempt to contain costs while funding an ambitious product pipeline.

US tariff quota system hurts Aston Martin

Under the new US-UK trade arrangement, only a fixed number of British-built cars can enter the US each year at a lower import tariff. Once that quota is filled, any further vehicles face sharply higher duties — in some cases up to ten-times more.

The US' aim is to protect American automakers while still allowing limited market access for some European brands.

Large manufacturers with US plants or high-volume exports frontload their shipments and quickly fill up the total quota for the UK. Brands like Aston Martin, which build fewer cars and ship in smaller batches, often miss that early quota window, leaving them exposed to the full tariff.

This system forces automakers like Aston Martin to make costly trade-offs: either absorb the tariff hit, which constrains profit margins, or delay deliveries until the quota resets, which stalls revenue and disrupts cash flow.

The result is a stop-start export rhythm that makes financial forecasting harder and undermines competitiveness against rivals with local production or larger lobbying power.

Why Aston Martin’s sales matter

Despite its modest volumes, Aston Martin’s performance carries symbolic and economic weight. The brand is one of the few independent luxury carmakers still designing and assembling in Britain — a bellwether for the health of the UK’s high-end manufacturing sector.

"A lot is riding on its first ever limited production mid-engine hybrid supercar, Valhalla, which is expected to start deliveries in the fourth quarter, entering production in Q3," Scholar said. "Aston Martin says profitability and free cash flow improvements in 2026 will be driven by the Valhalla and cost reductions."

Aston’s sales trajectory is also closely watched by analysts as a proxy for global luxury demand; when affluent consumers hesitate to spend six-figure sums on new sports cars, it signals a wider cooling in discretionary spending. A slump in Aston’s order book can therefore tell a story about the wider luxury industry, affecting Swiss watchmakers and European fashion houses alike.