Stellantis Shares Plummet 7% Amid European Car Sales Decline

Stellantis shares fell 7% after European car sales declined in June, with the company's registrations dropping 12.3% YoY. Other top automakers like Volkswagen, Renault, and Hyundai also reported declines, while Tesla's sales fell 22.9%. Despite the overall drop, electrified vehicle registrations grew, with battery electric vehicle sales up 7.8%, hybrid electric vehicles up 41.6%, and plug-in hybrids up 6.1%.

Stellantis shares dropped 7% following a significant decline in European car sales during June 2025. The European Automobile Manufacturers Association (ACEA) reported a 5.1% year-over-year drop in new car registrations across the European Union, Britain, and the European Free Trade Association, totaling 1.24 million vehicles [2].

Stellantis, the maker of Jeep and Ram, saw its registrations decrease by 12.3% year-over-year, contributing to a €2.3 billion first-half loss. Other top automakers such as Volkswagen, Renault, and Hyundai also experienced declines in sales, while Tesla's sales fell by 22.9% [2].

Despite the overall drop in sales, there was a notable increase in the registrations of electrified vehicles. Battery electric vehicle (BEV) sales rose by 7.8%, hybrid electric vehicle (HEV) sales increased by 41.6%, and plug-in hybrid (PHEV) sales grew by 6.1%. These figures indicate a growing demand for cleaner and more efficient vehicles [2].

The decline in car sales and the impact on Stellantis' financial performance are attributed to several factors, including competition from Chinese automakers, U.S. import tariffs, and domestic regulations aimed at accelerating the transition to electric vehicles. The tariffs have been particularly challenging for automakers, with Stellantis absorbing €300 million in tariff-related costs during the first half of 2025 [1].

The U.S. and European Union are nearing the completion of a comprehensive trade agreement designed to reduce tariffs on essential goods, enhance digital commerce, and facilitate international manufacturing operations. This potential agreement could eliminate significant import duties on electric vehicles and battery components, potentially benefiting European automotive manufacturers such as Volkswagen, BMW, and Renault [3].

The agreement's impact on Tesla is uncertain, with the company facing potential competitive challenges as European manufacturers gain enhanced access to American consumers. The elimination of import fees could allow European companies to compete more aggressively in the U.S. market, leveraging their extensive manufacturing capabilities and government backing [3].

In conclusion, the decline in European car sales and the subsequent drop in Stellantis' shares reflect the broader challenges faced by the automotive industry. The increase in electrified vehicle registrations indicates a shift in consumer preferences towards cleaner technologies. The upcoming trade agreement could significantly alter the competitive landscape, potentially benefiting European automakers and challenging established market leaders.

References:
[1] https://moneymorning.com/2025/07/23/gm-and-stellantis-lose-billions-as-tariffs-reshape-u-s-auto-industry/
[2] https://www.investing.com/news/economic-indicators/european-car-sales-slump-in-june-as-automakers-woes-deepen-4149673
[3] https://rollingout.com/2025/07/24/us-eu-near-deal-will-tesla-survive/