On Tuesday, shares of Ford Motor (NYSE:F) Co dropped 10 per cent after the automaker flagged a bigger-than-expected USD 1 billion hit from inflation and pushed delivery of some vehicles to the fourth quarter due to parts shortages.

Ford’s preliminary third-quarter results sent shares of rival General Motors Co (NYSE:GM) tumbling 3.3 per cent as it was argued that it might take more time for the auto industry to recover from chip shortages. Electric-vehicle makers Tesla (NASDAQ:TSLA) Inc and Rivian Automotive Inc tumbled about 1 per cent each in early trade.

On Monday, Ford also said it would have 40,000 to 45,000 vehicles in parts lacking inventory. In July, the company had outlined a USD 3 billion hit for the year from inflationary pressures.

Ford’s outlook also comes against investor worries that the US Federal Reserve’s pace of interest rate hikes to control rising inflation threatens to tip the economy into a recession.

However, Ford, set to report third-quarter results on October 26, reaffirmed its 2022 adjusted earnings before interest and taxes forecast of between USD 11.5 billion and USD 12.5 billion on Monday.