Stellantis faces €1.5bn US tariff hit, warns of weak second-half profitability

Global automaker Stellantis has warned of increased financial pressure this year, including a €1.5 billion ($1.73 billion) impact from US tariffs for 2025, further straining its profitability outlook after a tough first half of the year.

The company disclosed on Tuesday that its operating income for the second half of 2025 is projected to fall into the low single digits, based on tariff regulations that took effect the same day.

The €1.5 billion tariff burden includes €300 million already incurred during the first half.

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This latest figure matches the upper end of the company’s earlier forecast range of €1.0 to €1.5 billion, provided last week when preliminary half-year results were released.

Those figures were largely confirmed on Tuesday.

In addition to the tariff blow, Stellantis is grappling with a mix of other challenges, including currency fluctuations, intensified competition from Chinese automakers, and potential fines stemming from the European Union’s carbon emissions regulations.

The company’s shares dropped 2.3% during early trading in Milan the steepest fall among blue-chip stocks after plunging as much as 4.8% earlier in the session.

Market analysts raised concerns about the company’s vague second-half outlook. Jefferies analysts cited a lack of detail in the guidance, while Bernstein wrote in a note that “the lack of precision undermined the stock.”

Despite the financial turbulence, Stellantis said it expects higher net revenue and an improvement in industrial free cash flow in the second half, after reporting a cash burn of €3 billion in the first half of the year.

Newly appointed CEO Antonio Filosa, a longtime company executive who took the reins in May, acknowledged the hurdles but remained optimistic.

“Our new leadership team, while realistic about the challenges, will continue making the tough decisions needed to re-establish profitable growth and significantly improved results,” Filosa said in a statement.

Filosa replaces former CEO Carlos Tavares, who was ousted in December following the group’s poor 2024 performance in the key US market.

As he takes charge of a 15-brand portfolio globally, Filosa faces the task of revamping Stellantis’ product line-up and restoring both market share and investor trust.

He is expected to make his first official appearance as CEO during a results call later on Tuesday.

(Reuters)