GM and Stellantis Profits Plunge Under New Auto Tariffs
GM and Stellantis are taking billion-dollar hits as 25% tariffs disrupt production, slash earnings, and trigger major strategy shifts.
New tariffs are hitting automakers hard cutting earnings, shifting production, and forcing major recalculations.
Two of Detroit’s biggest names General Motors and Stellantis are reeling from the economic shockwave of reinstated 25% tariffs on imported vehicles and parts. In just the last quarter, both automakers reported major profit declines and signaled long-term changes to how and where they build cars.
Why does this matter right now?
GM’s second-quarter net income sank 35%, landing at $1.9 billion. The company directly attributed $1.1 billion in added costs to the tariffs. Even with solid revenue at $47.1 billion, GM had to revise its full-year outlook and cut capital spending by $500 million to brace for what’s ahead.
Stellantis fared even worse. It expects a first-half net loss of €2.3 billion (approximately $2.7 billion), with €300 million tied directly to tariff penalties. Its North American vehicle shipments dropped 25% in Q2, making it one of the hardest-hit companies in the sector.
How does it compare to rivals?
All major automakers are feeling pressure, but GM and Stellantis are in the bullseye due to their mix of U.S. assembly and import-reliant product lines. According to industry analysts, the new tariffs are inflating vehicle production costs by up to $5,000 per unit, depending on supply chain exposure.
While Ford and Hyundai have also reported margin compression, GM and Stellantis are taking more visible steps. GM announced it would relocate 300,000 units of production back to U.S. plants by 2027. Stellantis is scaling back European exports and fast-tracking development of models built on North American platforms.
Who is this for and who should skip it?
This story serves as a wake-up call for investors, policymakers, and anyone with a stake in the automotive supply chain. It also matters to car buyers, especially those considering imports, as price hikes and shifts in availability could impact deals later this year.
On the flip side, consumers purchasing vehicles with majority U.S. content or built in tariff-exempt markets may see fewer changes in pricing or delivery times, at least in the short term.
What’s the long-term significance?
The bigger story here is how quickly global car manufacturing is being forced to localize. The 25% tariff isn’t just a trade policy it’s a lever that’s moving factories, reshaping vehicle portfolios, and changing investment strategies.
GM has pledged $4 billion to expand domestic production, including shifting models like the Chevrolet Blazer from Mexico to Tennessee. Stellantis, meanwhile, is pausing low-volume innovation programs like hydrogen development and reallocating those resources to core U.S. operations.
Automakers aren’t just trying to survive; they’re racing to adapt. If tariffs remain in place through 2026 or expand further, many companies may need to redraw their entire global production maps.
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