Stellantis reported that Trump’s tariffs led to costs of nearly $350 million in direct payments and lost production in the first half of 2025. Preliminary data suggests total losses could reach $2.7 billion, influenced by tariff-related expenses, efforts to boost profitability, and adherence to new emissions rules.<\/p>\n
In North America, the carmaker saw a 25% decline in sales for the quarter ending in June, partly due to reduced production and shipments of imported vehicles affected by tariffs. These tariffs, imposed on April 2, applied a 25% levy on imported vehicles and auto parts, disrupting supply chains in the U.S., Mexico, and Canada.<\/p>\n
Stellantis halted production at facilities in Windsor, Canada, and Toluca, Mexico, yielding 900 layoffs in Michigan and Indiana. Trump clarified that these tariffs would not compound with those on steel and aluminum.<\/p>\n
The company cited tariffs six times in its H1 earnings overview and paused its forward guidance on April 30 due to discrepancies between performance and forecasts. Additional challenges the company faces include product reshuffling, inventory reductions, and challenges with dealer relationships.<\/p>\n
Given the significant headwinds from the new trade policy, we see an opportunity in taking a bearish position on the carmaker. Buying put options on its stock allows us to profit from the expected price decline as these costs eat into earnings. The stock has already underperformed the S&P 500 by over 30% year-to-date, showing a clear weak trend that these new factors will likely accelerate.<\/p>\n
The suspension of forward guidance creates immense uncertainty, making volatility itself a tradable event. We are considering long straddles, which involve buying both a put and a call, to profit from a large price swing in either direction. Historically, auto stocks exhibited wild swings and depressed valuations during the 2018-2019 trade disputes, a pattern we expect to repeat.<\/p>\n
These supply chain disruptions will not be isolated to a single company. Other automakers with heavy reliance on Mexican production, like General Motors and Ford, are also vulnerable. With Mexico accounting for over $100 billion in U.S. vehicle and parts imports last year, we are exploring bearish positions across the entire sector.<\/p>\n
The production halts are especially damaging due to the company’s pre-existing inventory issues. Reports from early this year showed some of its brands holding over 100 days’ supply of vehicles, nearly double the industry average. This glut of unsold product will magnify the financial impact of shutting down key North American production lines.<\/p>\n
The options market is already pricing in significant risk, with implied volatility on the manufacturer\u2019s stock trading at a premium. This makes buying options more expensive, but it confirms the market’s anxiety about future earnings. We view this elevated cost as a necessary price for positioning ahead of further negative announcements.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Stellantis cites $350M in tariff-related losses, halted production, and a 25% North American sales decline.<\/p>\n","protected":false},"author":62,"featured_media":17028,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-26927","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/26927","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=26927"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/26927\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17028"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=26927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=26927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=26927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}