Stellantis Faces $1.7 Billion Hit From US Tariffs This Year
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Stellantis NV sees tariffs setting back earnings by about 1.5 billion euros ($1.7 billion) this year as higher duties hit the Jeep maker’s already struggling North American business.
The manufacturer expects to incur the vast majority of that impact — around 1.2 billion euros — in the second half of this year, as President Donald Trump’s tariffs raise the cost of procuring parts from outside the U.S. Slashing production of vehicles most affected by higher levies contributed to a 26% drop in North American net revenue during the first half.
The downbeat guidance for the remainder of the year sent Stellantis shares tumbling as much as 4.8% in Milan trading. The stock has fallen 36% this year.
“Stellantis reinstated guidance, albeit more qualitatively than quantitatively,” Stephen Reitman, a Bernstein analyst with the equivalent of a hold rating on the shares, said in a note July 29. “The lack of precision undermined the stock.”
Stellantis forecast a low-single digit adjusted operating income margin for the second half. Prior to suspending guidance in April due to tariff uncertainties, the manufacturer was projecting a mid-single digit margin. The company pre-released earnings last week,surprisinginvestors with a 2.3 billion-euro first-half net loss.
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CEO Antonio Filosa has made dramatic moves since beingselectedfor the top job, resurrectingHemi V8 enginesfor Stellantis’ all-important Ram truck brand and postponing electrified pickups.
Whereas Trump is easing fuel-economy regulation in the U.S., Stellantis and its mass-market peers are still under pressure to meet stricter emission rules in Europe. The encroachment of Chinese manufacturers led by BYD Co. into the region’s stagnant car market is making that task all the more difficult.
READ MORE:Stellantis to Halt Investments in Hydrogen Joint Venture
Filosa, 52, is under pressure to address excess capacity in Europe and turn around some of the group’s struggling brands. These include luxury-car maker Maserati, which recorded a negative 38% margin in the first half as shipments slumped.
“In flat markets, the more share Stellantis loses, the more it needs to shrink its cost base, but the rhetoric from management suggests the cuts of the past went too deep,” HSBC analyst Michael Tyndall wrote in a recent note. “For investors (and us), this presents something of a conundrum.”
Stellantis’ issues are gravest in its former profit center North America, where shipments fell 23% in the second quarter. In addition to temporarily stopping production at plants in Canada and Mexico, the carmaker changed over assembly lines from models that it discontinued during the first half.
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Revenue declined 13% in the six months through June as deliveries fell in Europe, North America and the Middle East and Africa. The company said it’s seeing improvements in volumes, revenue and operating income compared with the second half of 2024, partly due to new products such as the Fiat Grande Panda.
In North America, the automaker is reviving the Jeep Cherokee sport utility vehicle and a combustion engine-powered Dodge Charger — two models that have been on hiatus since 2023.
Stellantis recorded a roughly 300 million-euro hit from U.S. tariffs in the first half. Chief Financial Officer Doug Ostermann flagged to investors earlier this month that the impact of the levies would be significantly larger in the second half. He and Filosa are scheduled host a call with analysts later July 29.
