Stellantis Urges Trump to Aim Tariffs at Parts Content
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The chairman of Stellantis NV said President Donald Trump should focus new tariffs on imported vehicles made without U.S. parts content instead of raising duties on Mexico and Canada.
“The real opportunity” for the administration to boost U.S. jobs and investment lies with “closing the loophole that currently allows approximately 4 million vehicles into the country with any U.S. content,” Stellantis Chairman John Elkann said Feb. 26 on an earnings call with analysts.
The comment marks the latest example of how U.S. auto industry leaders are trying to convince Trump to spare them from 25% levies on imports from Canada and Mexico that are set to take effect next week. Ford Motor Co. CEO Jim Farley earlier this month said those duties would “blow a hole” in the U.S. industry and serve as a “windfall” for rivals that can import more freely from Asia and Europe.
U.S. auto executives and lobbyists argue that vehicles made in North America that adhere to parts-content requirements under a free trade agreement Trump renegotiated in his first term should be exempt from any new duties. New levies could result in billions of extra costs for U.S. automakers as the North America supply chain is closely integrated, threatening auto sales and jobs in the industry.
It's time to embrace the opportunities ahead. Our Chairman, John Elkann, shares his perspective on 2025. — Stellantis (@Stellantis)
Elkann said the maker of Jeep SUVs and Ram pickups already produces vehicles with U.S. parts content in line with those rules.
Stellantis reported Feb. 26 that it expects profitability to remain lackluster this year as the automaker struggles to revive flagging sales while searching for a new chief executive officer.
The manufacturer is guiding for a mid-single-digit adjusted operating income margin in 2025, compared with 5.5% last year. The forecast issued Feb. 26 is a far cry from the double-digit returns Stellantis was projecting in early 2024.
Muted car demand in Europe and the threat of higher tariffs in the U.S. are clouding Stellantis’ prospects. It has yet to recover from last year’s dismal performance that led to the ouster of former CEO Carlos Tavares in December. Its net profit fell 70% last year.
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While Stellantis is still searching for his successor, the company has made significant changes. Chairman John Elkann has reshuffled management and touted investments in the U.S., where Stellantis plans to revive sales with new models including a midsize pickup.
Last year, the manufacturer hemorrhaged market share in North America due to a lackluster lineup and frayed relations with dealers and suppliers. Its adjusted operating income in the region slumped 80% in 2024.
Stellantis is also struggling in Europe, where poor EV demand, delays to new models and quality issues disrupted the operation of its factories, raising costs. The company’s car sales there declined 7.3% last year and 16% in January, the worst performance among the region’s major automakers. Adjusted operating income in enlarged Europe fell 63% in 2024.
Elkann wants the company on the path of recovery before selecting a new CEO, Bloomberg reported this month. He’s already given more power to regional executives, a change from the more centralized decision-making under Tavares. The CEO search is “well underway” and will be concluded in the first half of this year, the company said Feb. 26.
Stellantis is projecting “positive” net revenue growth and industrial free cash flow for this year, without being more specific. The latter measure swung to negative 6 billion euros ($6.3 billion) last year, from positive 12.9 billion euros in 2023.
The 5.5% margin the company generated last year was the low end of its revised-down guidance.
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Stellantis proposed a dividend of 0.68 euro per common share — down from 1.55 euros a share last year — and said it has completed inventory management measures in the U.S. The company plans to introduce new models this year including the Fiat Grande Panda SUV and the larger Citroën C3 Aircross.
Stellantis will evaluate share buybacks in the second half of 2025 based on its commercial recovery, it said in an earnings presentation. The manufacturer also expects to generate positive free cash flow in the second half.
“We are firmly focused on gaining market share and improving financial performance as 2025 progresses,” Elkann said.
