Mercedes-Benz and Stellantis suspend 2025 forecasts over US auto tariffs
European carmakers cite new US auto tariffs and trade volatility as key threats to profits.
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| Mercedes vehicles are parked at the automotive terminal in the port of Bremerhaven on April 22, 2025, in Bremerhaven, Germany. Photo by Focke Strangmann/Getty Images |
By Anna Fadiah and Hayu Andini
Mercedes-Benz and Stellantis have officially suspended their 2025 financial forecasts due to growing uncertainty surrounding US trade policy. The announcement, made Wednesday, came just a day after US President Donald Trump sought to ease some of the pressure from the new 25-percent tariffs he imposed on car imports earlier in the month.
The decision from Mercedes-Benz and Stellantis underscores the deepening concern across the global automotive industry as companies struggle to navigate volatile trade conditions. These latest moves follow similar actions by General Motors and Volvo Cars, indicating widespread apprehension within the sector.
Stellantis chairman John Elkann responded to the developments by welcoming Trump’s attempt to offer some relief, but emphasized the challenges ahead. “Stellantis appreciates the tariff relief measures decided by President Trump,” Elkann stated. “While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the US administration to strengthen a competitive American auto industry and stimulate exports.”
Profit pressures and dropping sales highlight industry strain
Stellantis, the multinational auto group behind brands like Jeep, Fiat, Peugeot, and Maserati, reported a sharp 14-percent drop in revenue for the first quarter of 2025. Sales fell to 35.8 billion euros ($40.7 billion), driven largely by deteriorating conditions across global markets and ongoing tariff anxieties.
Mercedes-Benz also saw its financial performance decline significantly. The German automaker posted a 43-percent plunge in net profit during the first three months of the year, bringing earnings down to 1.73 billion euros. While Volkswagen, Europe’s largest carmaker, maintained its financial guidance for 2025, it too saw a drop in net profit—down 40.6 percent to 2.19 billion euros.
Despite the earnings hit, Mercedes CFO Harald Wilhelm maintained a cautiously optimistic tone. “This, combined with a healthy balance sheet, provides a solid foundation to navigate our company through a period of geopolitical uncertainties,” Wilhelm said, referring to the company’s strong position in the luxury vehicle market.
Trade tensions compound challenges in electric vehicle markets
Even before the recent tariffs were enacted, European automakers were grappling with slower demand for electric vehicles and intense competition in China—now the world’s largest car market. These issues have compounded the impact of new trade restrictions, leaving many companies with few clear options.
Volkswagen, which includes Audi, Skoda, and Porsche under its 10-brand umbrella, forecasted that it would meet the lower end of its profit guidance for the remainder of the year. The company cited a range of difficulties, including stricter emissions standards, heightened global competition, and escalating trade disputes.
Speaking on a call with analysts and investors, Volkswagen CFO Arno Antlitz acknowledged the uncertainty around the US trade environment. “It’s highly difficult to give a projection for the full year,” Antlitz admitted. He added that it was “too early to say” whether Volkswagen would ramp up US-based manufacturing as a response to the tariffs.
Aston Martin scales back US shipments but holds guidance
Meanwhile, British luxury automaker Aston Martin Lagonda announced that it was limiting shipments to the United States as a result of the tariffs. However, unlike its European counterparts, the company chose to maintain its full-year guidance despite a 13-percent drop in first-quarter revenue.
The auto industry is now bracing for an additional wave of tariffs, with new duties on foreign auto parts expected to take effect on May 3. These tariffs, alongside the earlier levies on finished vehicles and raw materials, are raising questions about long-term competitiveness and supply chain stability.
The 25-percent tariffs not only apply to completed vehicle imports but also to steel and aluminium, crucial components in car manufacturing. The cumulative effect has been a surge in production costs, forcing many automakers to reevaluate pricing strategies and production logistics.
Trump administration seeks to cushion the blow
Attempting to deflect criticism, the Trump administration introduced changes aimed at softening the tariffs’ economic impact. According to the US Commerce Department, companies will now only pay the higher of either the 25-percent tariff on a finished imported vehicle or the 25-percent tariff on steel or aluminium—not both. This policy aims to prevent duplicate penalties on single units.
Additionally, firms importing parts for assembly within the United States will be eligible for partial relief. A 3.75 percent deduction from a vehicle’s list price will apply in the first year, decreasing to 2.5 percent in the second year. The intention, officials say, is to support local assembly efforts without completely shielding foreign-sourced inputs from taxation.
However, these measures have not calmed industry-wide concerns. The rapid changes in policy and lack of long-term clarity continue to deter investment, disrupt production planning, and shake market confidence.
A fragile forecast for the global car industry
The moves by Mercedes-Benz and Stellantis to suspend their 2025 financial guidance reflect a broader industry trend of financial conservatism amid rising geopolitical risks. With more automakers reconsidering their exposure to US tariffs, and growing worries about the global electric vehicle slowdown, the year ahead remains clouded in uncertainty.
While some companies like Volkswagen are attempting to hold the line with cautious optimism, others are clearly preparing for a prolonged period of disruption. As the May 3 auto parts tariffs loom, the pressure is mounting on automakers and governments alike to find a workable solution.
For now, Mercedes-Benz and Stellantis have taken a defensive stance, prioritizing financial flexibility over bold projections. Whether that strategy proves wise may depend on how the White House's evolving trade agenda shapes the future of the global automotive supply chain.
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