Stellantis Sales Plunge 25% in North America Due to US Tariffs, Faces €2.3 Billion Loss

Stellantis, the global automotive powerhouse encompassing brands like Vauxhall, Jeep, and Fiat, is grappling with the repercussions of US tariffs, which have already inflicted a €300 million financial blow. The company disclosed that these tariffs, imposed during the tenure of US President Donald Trump, have disrupted its trade dynamics and curtailed its planned production capacity. A significant 25% tariff on imported cars entering the US market, effective since April, has created ripples across the automotive sector.

In response to these tariffs, Stellantis has experienced a quarter-on-quarter sales decline in North America, with vehicle shipments dropping 25% in the months leading up to June compared to the previous year. This contraction is largely attributed to decreased manufacturing and imports of vehicles subject to the tariffs, alongside diminished corporate fleet sales. As a result, Stellantis' total sales shrank by 10% during this period according to their preliminary figures for the year's first half.

Conversely, the company maintains a diverse manufacturing footprint, operating facilities across the US, UK, Europe, Canada, Mexico, and South America. Despite this global reach, the imposition of the 25% tariff has notably stymied their North American endeavors. Stellantis has also announced unaudited first-half revenues of €74.3 billion with a net loss of €2.3 billion, remarkably impacted by the tariff policies.

The broader industry fallout from these tariffs is underscored by the policy's potential to reconfigure global supply chains and trade flows, affecting not just Stellantis but other automotive giants like Jaguar Land Rover. Although Jaguar Land Rover benefited from a tariff reduction deal between the UK and the US in May, it too reported impacts that have reverberated through its financial forecasts and job market.

Stellantis, which possesses an array of marquee brands such as Alfa Romeo, Maserati, Citroen, Chrysler, and Dodge, also faced production halts at some plants in Canada and Mexico in response to these tariffs. The challenge now is to navigate the geopolitical landscape while aligning its extensive operations to manage this financial pressure.

The US tariff turmoil has driven Stellantis to take a €3.3 billion charge primarily related to program cancellations, platform impairments, and consequences of the US legislation changes that recently removed penalties for non-compliance with established CAFE fuel economy targets. This legislative shift opens avenues for the production of higher-polluting cars in the U.S., potentially easing some operational constraints faced by automakers.

As the company seeks to bolster profitability and operational strength, it is anticipated to undergo a strategic recalibration poised to leverage new product offerings anticipated to yield better returns by the latter half of 2025. Antonio Filosa, the newly appointed CEO, has launched a restructuring initiative, signaling a shift in management to drive North American performance and spear earn growth amid these turbulent times.

Stellantis remains committed to publishing its full first-half financial results on July 29, with CFO Doug Ostermann and CEO Antonio Filosa set to address market analysts and stakeholders. The upcoming report is expected to further elucidate Stellantis’ strategy as it endeavors to surmount the barriers posed by new trade policies and the evolving automotive landscape.

As the industry braces for a broader sequence of adjustments in response to these economic policies, analysts continue to forecast an evolving landscape for Stellantis, with its actions and adaptations under the new leadership being closely watched.