For anyone keeping an eye on the auto industry, few things grab attention quite like a company as large as Stellantis (NYSE: STLA) swinging from profit to a sizable loss. The French-Italian-American conglomerate, known for brands like Peugeot, Jeep, Chrysler, and Fiat, finds itself navigating unfamiliar territory. The company expects a $2.7 billion net loss for the first half of 2025, a sharp reversal from a $6.1 billion profit in the first half of last year.
But numbers only tell part of the story. There is a real sense inside Stellantis that the business is, frankly, in a period of forced adjustment rather than collapse. So what happened? There are a few main culprits behind the red ink, and the recipe is hardly exotic: tariffs, lower shipments, and a major restructuring push that is still in its early stages.
Stellantis’s early-year struggles revolve largely around the United States. After import duties were raised, the company’s own analysis estimates these tariffs cost nearly $350 million in just the first half of the year, once you include the knock-on effect of cutting planned production on certain models.
The impact was swift and unmistakable. North American vehicle deliveries, which had already become a pillar of Stellantis’s business, fell by a bruising 25% during the second quarter compared to last year. This wasn’t due to flagging demand from drivers, but rather Stellantis simply could not justify manufacturing and shipping as many vehicles when tariffs were making each one so much less profitable. Inevitably, fewer shipments put a dent in both revenue and market share.
In parallel, Stellantis is tackling perhaps its most significant reorganization since the company’s formation. Management set aside almost $3.8 billion in pre-tax charges, which accounts for program cancellations, technology write-downs, and the kind of belt-tightening moves that companies make when their playbook needs a complete overhaul.
While the bulk of these restructuring costs are non-cash, they do underline how dramatically the company is reassessing its priorities. Several long-term programs, including certain hydrogen initiatives and maybe an electric platform or two, have been paused or scrapped outright. Stellantis is betting big on hybrid models in Europe and larger gasoline vehicles for American buyers, but it is still early in that shift. New products may help later in the year, but right now, these charges are dragging down the bottom line.
Stellantis reported global consolidated shipments of approximately 1.4 million vehicles in the second quarter, which is a 6% year-over-year decline. Europe, another major market for Stellantis, suffered from a 6% dip as well, compounded by a pause in production for some older models and lackluster launches of new offerings.
Management’s expectation is not that the situation will turn around overnight. The partnership’s financial guidance was suspended back in April, signaling just how uncertain things have become as a result of these big external and internal changes.
It is tempting to call any run of losses a crisis, but what’s clear from all this is that Stellantis is making difficult choices in response to pressures outside of its control, as well as the evolving demands of the market. Until tariffs are resolved and the impact of restructuring decisions start to show up in operating profit or product buzz, the rest of 2025 is likely to be just as bumpy as the first half.
