Stellantis Faces €1.2B Tariff Hit, 25% North America Shipments Drop as Shares Fall 4.1% on Revised Margins

Stellantis NV has revealed a projected €1.2 billion ($1.4 billion) financial burden from U.S. tariffs in the second half of 2025, a setback for the automaker as it navigates trade uncertainties and supply chain disruptions. The forecast follows the EU-U.S. trade agreement announced in July, which the company stated does not fully offset the costs of elevated duties on imported vehicles and components. This marks a significant escalation from the €300 million tariff-related impact reported in the first half of the year, when Stellantis temporarily halted production in Canada and Mexico amid trade tensions [1].

The automaker, which produces Jeep SUVs and Fiat cars, has adjusted its financial guidance for 2025, now anticipating a low-single-digit adjusted operating income margin for the second half. This contrasts with its earlier mid-single-digit margin projection before scrapping its full-year forecast in April due to the tariff volatility. The revised guidance reflects the strain of higher duties, which have inflated parts costs and disrupted production volumes. North America, Stellantis’ core market, saw a 25% drop in second-quarter shipments, compounding the financial pressure [1].

CEO Antonio Filosa faces mounting challenges as he works to stabilize the company. Recent cost-cutting measures, including a €2.3 billion net loss in the first half of 2025, have already reshaped operations. However, analysts highlight concerns over the balance between cost reductions and maintaining profitability. HSBC analysts noted that while Stellantis’ “tough decisions” address immediate risks, prior cuts may have gone too far, creating a conundrum for investors [2]. The company’s struggles are further compounded by competitive pressures, including Chinese automakers like BYD expanding into European markets [1].

Stellantis has not yet disclosed specific strategies to mitigate the tariff impact but emphasized its commitment to cost discipline and operational efficiency. The firm’s July earnings report underscored the urgency of these efforts, with revenue declines in Europe, North America, and the Middle East and Africa, though South America saw growth driven by Argentina’s demand [1]. The company is also relying on new models, such as a hybrid Jeep Cherokee and a combustion-engine Dodge Charger Sixpack, to boost sales. However, these initiatives will need to counterbalance the second-half tariff costs, which CFO Doug Ostermann warned will be “significantly” higher than the first-half impact [1].

Market reactions have been mixed. Stellantis shares fell as much as 4.1% in Milan following the July 26 announcement, reflecting investor concerns over the projected losses. Yet, the firm’s transparency about trade risks may provide clarity for stakeholders. Barclays analysts observed that Stellantis’ detailed guidance could stabilize investor sentiment in the long term, despite the immediate financial headwinds [4].

The EU-U.S. trade deal, while reducing some barriers, leaves tariffs on non-EU members like China intact, exposing Stellantis to ongoing geopolitical risks. The company’s ability to absorb these costs will hinge on its capacity to optimize pricing strategies and streamline supply chains. With the second half poised to test its resilience, Stellantis’ performance will be a critical indicator of how multinational automakers adapt to an increasingly fragmented global market [3].

Sources:

[1] Stellantis Reports First Half 2025 Results Reflecting (https://fox40.com/business/press-releases/globenewswire/1001120183/stellantis-reports-first-half-2025-results-reflecting-external-headwinds-and-ongoing-recovery-actions-financial-guidance-re-established)

[2] New Stellantis CEO to make "tough decisions" as profits... (https://www.autocar.co.uk/car-news/business-finance/new-stellantis-ceo-make-tough-decisions-profits-drop-%E2%82%AC23bn)

[3] Trade War Latest: EU-US trade deal (https://www.bloomberg.com/news/newsletters/2025-07-29/trade-war-latest-eu-us-trade-deal?srnd=homepage-europe)

[4] Barclays Plans £1 Billion Buyback as Traders Lift Earnings (https://news.bloombergtax.com/international-trade/barclays-launches-1-billion-buyback-after-traders-lift-earnings)