Stellantis reports $2.7 billion loss due to tariffs and sales decline

The automotive giant Stellantis reported a significant financial loss due to tariffs and slow sales.

Stellantis faces $2.7 billion loss as tariffs hit sales hard

Stellantis NV revealed a preliminary loss of $2.7 billion for the first half of 2024, attributing the downturn to U.S. tariffs and sluggish sales. The company, which owns brands like Jeep and Ram, faces intense pressure following a disappointing 2024, leading to the replacement of CEO Carlos Tavares. Chief Financial Officer Doug Ostermann forecast that tariffs would cost the company between $1 billion and $1.5 billion by year-end. Nevertheless, new CEO Antonio Filosa expressed optimism, noting progress made despite ongoing challenges. The company reported a 6% decline in global vehicle shipments in the second quarter and a 25% drop in North America. Recent strategic changes included reducing imports from Europe and cutting production levels, but market pressures continue to weigh heavily on operations.

Stellantis's current situation underscores the vulnerabilities of the automotive industry in a shifting political landscape. While tariffs have significantly impacted costs, the company's reaction—reducing imports and cutting production—shows a lack of resilience in the face of external pressures. As Stellantis navigates through this turmoil, the emphasis on new models such as the Jeep Cherokee may provide a pathway to recovery. However, reliance on product launches in a challenging market may not be enough to offset the financial fallout from tariffs.

Highlights

The success of recent model launches will be crucial for Stellantis as it works to recover from this financial setback.