Stellantis Warns of Surprise $2.7 Billion Loss as Tariffs and Restructuring Bite

Stellantis (NYSE: STLA; EXM: STLAM.MI) expects a €2.3 billion ($2.7 billion) net loss for the first half of 2025, reversing a €5.6 billion profit a year earlier. The warning comes ahead of full earnings on July 29 and reflects a combination of restructuring charges, canceled programs, and rising tariff costs—putting pressure on the company’s shares and rippling through broader auto-sector sentiment.

Heavy Write‑downs Reflect Strategic Pivot

The automaker reported €3.3 billion in impairments and restructuring costs linked to the shutdown of its hydrogen vehicle program and reallocation of capital toward hybrid and electric platforms. These adjustments are part of Stellantis’ broader push to shift resources toward EV development while exiting underperforming segments.

The restructuring hit is raising concern across auto-sector names, particularly within major equity indices like the EU50 and FR40, where large automakers carry significant weight.

Tariff Impact Undermines North American Output

Stellantis also cited roughly €300 million in additional costs due to reinstated 25% U.S. tariffs on imported vehicles from Canada and Mexico. The result was a 25% drop in North American deliveries for the quarter and scaled-back production at key facilities. Management flagged that H2 exposure could worsen if no resolution is reached.

Traders are comparing Stellantis’ position to rivals like Ford (NYSE: F) and General Motors (NYSE: GM), which maintain more insulated North American operations and may be better positioned to absorb external shocks.

Revenue Slide and Liquidity Watchpoints

Revenue declined to €74.3 billion from €85 billion year-over-year, while global deliveries fell 6%. Operating cash flow swung negative by €2.3 billion, raising liquidity questions at a time of tighter global financial conditions. The company has not reinstated formal guidance since suspending its 2025 outlook earlier this year.

Stellantis shares are now down approximately 35% year-to-date, and traders are weighing downside risk into the July 29 earnings release. European equity benchmarks such as the EU50 and FR40 remain sensitive to developments in the industrial and consumer durables space.

Leadership Shake-up and Strategic Challenges

New CEO Antonio Filosa, who replaced Carlos Tavares in May following underwhelming 2024 results, now faces pressure to stabilize the business. CFO Doug Ostermann cautioned that tariff-related costs could double in the second half if no resolution is reached. Management is counting on upcoming vehicle launches to help offset margin erosion in the second half.

But traders remain cautious, with ongoing input cost pressures, weak North American visibility, and regulatory unpredictability all weighing on short-term conviction.

Market Reaction and Sector Readthrough

Stellantis fell ~2% in Milan trading on the update, underperforming peers. Analysts from Bernstein and UBS said the company is “moving aggressively” to adjust its structure, but noted that current liquidity strains and external policy risks could keep pressure on the stock.

Broader auto-sector exposure in major indices—including the US500, EU50, and FR40—is increasingly correlated with tariff developments and earnings revisions across the supply chain.

Tips for Traders

• STLA (NYSE / Milan) could face further downside heading into earnings—watch for tariff commentary and margin guidance.

• EU50 and FR40 may underperform if industrial sentiment weakens further—auto exposure remains a drag.

• F (NYSE: F) and GM (NYSE: GM): monitor relative strength—North America-centric exposure could offer strategic advantage.

• USD/EUR movement may reflect policy and trade divergence—watch for strength if European export headwinds persist.

• WTI Crude may see softer demand expectations if vehicle production continues to decline globally.