Stellantis: Vauxhall owner warns of £1.3bn tariff hit after EU-US deal
Stellantis will have to shoulder a €1.5bn (£1.3bn) hit from President Donald Trump’s swingeing tariffs on cars this year despite the trade deal struck between the European Union and United States earlier this week.
The automaker, whose stable of marques includes Vauxhall and Fiat, confirmed in a half-year update that it had already incurred levies of €300m on its US exports this year, and expects that figure to rise dramatically in the wake of the US-EU trade pact.
The €1.5bn hit is at the top end of the €1.0-€1.5bn range it provided last week alongside its preliminary results, which also revealed a 13 per cent drop in net revenues that led it to post a loss of €2.3bn.
Those bleak numbers were broadly confirmed in its final half-year earnings on Tuesday, prompting shares in the Milan-listed group to fall by as much as 4.8 per cent in early trading on Tuesday, before paring losses back to 1.6 per cent.
The tariff disclosure is one of the largest confirmed by a major European exporter since Donald Trump announced his first blitz of tariffs on carmakers in March.
It is also the first major company to issue formal guidance on tariffs in the aftermath of the deal struck by the European Union and US on Sunday to stave off the worst of Donald Trump’s telegraphed import taxes.
EU officials secured a 15 per cent tariff on member states’ exports to the US – down from the spectre of 30 per cent levies coming into force in August – and in return unveiled multibillion dollar investments into the US’s energy and defence sectors.
But the deal sparked several stinging rebukes from European political heavyweights, many of whom warned the terms would act as yet another headwind on Europe’s already stuttering economy.
Stellantis ‘realistic about challenges’
French Prime Minister Francois Bayrou said the agreement represented a “submission” from the bloc, which amounted to a “dark day” for European interests.
And German Chancellor Friedrich Merz warned that even though the terms were the “best result achievable”, they would wreak “considerable damage” to his nation’s export-reliant economy.
Alongside its tariff disclosure, Stellantis confirmed it expected revenue and cash flow to tick back up after a torrid year during which its shares have nearly halved in value.
The group’s electric vehicle divisions have struggled to compete with the influx of cheap Chinese competitors in Europe and the US, and many of its flagship marques have failed to refresh their line-ups at the same speed as competitors.
“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,” newly appointed chief executive Antonio Filosa said.
Filosa took the reins at Stellantis in May after his predecessor, Carlos Tavares, resigned abruptly last year after “different views” emerged between him and the board.