With tariffs affecting vehicle import shipments as well as long-term production strategies, the Trump administration pulling back support for the electric vehicle (EV) industry, and a devastating price war in China, there's a lot to digest for auto investors. Through all the noise, however, Ford Motor Company's (F -0.90%) aggressive employee pricing for all customers has been a huge success and could be setting the company up for a stronger quarter.

Employee pricing drives demand

A couple of months ago, Ford announced that it would offer employee discounts to all customers through June 2, which was later extended through July 6, covering nearly all Ford and Lincoln models. The employee discount will be applied in addition to any other incentives. It's an aggressive move that can save several thousands of dollars on most vehicles at a time when many people are concerned about rising new vehicle prices.

The good news is that the pricing strategy has driven substantial demand for Ford and increased its market share over the past two months, compared to the prior year. More specifically, Ford posted a 14.7% share of the U.S. market at the end of May, up 1.9 percentage points compared to the prior year. It's a big gain for Ford, which typically competes with its rivals for tenths of market share.

Image source: Ford Motor Company.

There's plenty of uncertainty in the U.S. market, and Ford believes its employee pricing program is a way to provide consumers with a little more stability while executives try to better understand the effect of tariffs.

"There's no question that obviously prices are going to rise as more things come out," said Rob Kaffl, Ford's director of U.S. sales, when speaking to Automotive News. "We're still trying to understand the impact of the tariffs. We think the opportunity is now to make the offer with our customers, and we'll also have to weigh in what happens with these impacts."

Ford has already announced to dealers that it will raise prices on three Mexico-built vehicles by up to $2,000.

What's the catch?

While Ford's employee pricing and marketing campaign have paid off handsomely for the automaker over the past 60 days, it's also true that many investors will remember days long gone when out-of-control incentives eroded company profits. Market share is important, but it's also imperative that it's done profitably.

On the bright side, Ford's heavier domestic production footprint, which has cost the company in higher labor rates in the past, is actually working in its favor amid tariff uncertainty. Ford produced roughly 80% of its vehicles sold in the U.S. domestically. So as Ford is currently less vulnerable to tariff effects than its closest rivals, it can discount more effectively to drive demand.

Investors will certainly want to check in for the company's second-quarter report, which seems poised to post stronger sales and revenue growth, potentially at the expense of its margins. Ultimately, Ford seems to have positioned itself better than rivals to combat tariff costs in the near term. But stay tuned, because the tariff story is likely far from over.