Stellantis Warns $1.7 Billion U.S. Tariff Blow Could Sink 2025 Profitability

Stellantis (NYSE: STLA) is bracing for a hefty hit from U.S. tariffs next year, warning that the cost could top $1.7 billion in 2025. The car giant revealed Tuesday that these duties are weighing heavily on its operating income, especially after a rough start to the year.

The $1.7 billion figure reflects the combined impact of tariffs already paid in the first half (€300 million) and those expected for the rest of the year. That's right at the upper end of Stellantis' earlier estimate of €1 billion to €1.5 billion. The company's projections hinge on the tariff regime effective since this Tuesday.

These U.S. tariffs largely stem from a 25% levy imposed by President Donald Trump on imports from Mexico and Canada, where Stellantis sources a substantial chunk of its U.S. vehicle sales. Last year, over 40% of the roughly 1.2 million cars the automaker moved in the States came from those neighbors, making these tariffs a crushing bottleneck.

Adding fuel to the fire, Stellantis is battling currency swings and mounting pressure on the regulatory front, including potential penalties over EU carbon emissions. While North America has been a stronghold for the company, the recent first-half performance put a dent in that narrative. Revenues dropped 13% to €74.3 billion, operating margins shriveled to 0.7%, and a staggering €2.3 billion net loss hit the bottom line.

Shares felt the sting, plunging as much as 4.8% early Wednesday before settling 2.3% lower in Milan - the day's biggest blue-chip loser. Analysts weren't exactly singing the company's praises: Jefferies described the second-half outlook as vague, while Bernstein dismissed it as lacking solid detail.

Antonio Filosa, who took over as CEO in May following the ousting of Carlos Tavares, framed the situation in pragmatic terms. Filosa promised tough calls ahead to patch profitability and restore confidence, all while juggling a sprawling portfolio of 15 brands from Jeep to Fiat and Peugeot. His first formal results call as CEO was scheduled for later the same day.

Trade dynamics also complicated things. The weekend U.S.-EU trade agreement cut the proposed tariffs on many EU goods to 15%, but Stellantis remains exposed to the steeper 25% tariffs on North American imports - a nasty complication given its supply chain footprint. The company actually pulled its earlier recovery guidance in April amid the evolving tariff picture and fragile profit outlook.

By the numbers, North American revenue lagged slightly behind Europe in the first half, clocking in just over €28 billion compared with €29.2 billion for the continent. That's notable because North America has historically been Stellantis' profit engine.

No sugarcoating it: 2025 looks tricky for Stellantis, caught in a web of trade battles, shifting currencies, and regulatory uncertainty. The $1.7 billion tariff toll is a big chunk of change, and with operating income expected to stay in the low single digits in the second half, getting back into the black won't be a walk in the park.