Stellantis Anticipates Steady H2 Recovery Amid Upcoming Challenges

Stellantis, the global automaker known for brands like Jeep, Fiat, Peugeot, and Ram, is projecting a gradual but steady recovery in the second half (H2) of 2025, despite facing several headwinds. Key indicators show improving revenues and profitability compared to the first half, while the company continues to make bold strategic choices to restore stability.

First‑Half Headwinds

In H1 2025, Stellantis posted a net loss of approximately €2.3 billion, a steep reversal from a net profit of around €5.6 billion during the same period in 2024. Revenues also fell by roughly 13% to €74.3 billion, and adjusted operating income margin hovered at just 0.7%.

Additionally, the company burned about €3 billion in industrial free cash flow during the first six months of the year.

Key Challenges Faced

U.S. Tariffs: A major contributor to the company’s woes. Stellantis estimates a €300 million loss from U.S. tariffs in H1 alone, with a total impact for 2025 expected to be around €1-1.5 billion unless policies change.
Restructuring Charges: The company took €3.3 billion in pre-tax charges. These stemmed from cancelling its hydrogen fuel-cell program, shifting emissions compliance, and cost realignments, including a major impairment in Maserati’s platform.
Weak Market Demand: North American shipments dropped nearly 25% year‑on‑year, due to production cuts and reduced imports. Meanwhile, European light commercial vehicle markets have remained soft.

Stellantis Forecasts Gradual Recovery in H2

Despite the rough start to the year, Stellantis expects a gradual improvement in H2 2025, with:

Higher net revenues compared to H1
A low single‑digit operating income margin
Stronger industrial free cash flow

These projections assume current tariff regimes remain unchanged. CEO Antonio Filosa, who took over in May, reaffirmed the leadership’s commitment to making tough strategic decisions to restore profitability and investor confidence.

Strategic Moves: Building the Recovery

Leadership Change: Antonio Filosa replaced Carlos Tavares as CEO. Filosa’s priorities include rebuilding the company’s product lineup and returning Stellantis to healthy margins.
Product Roll‑Out: Stellantis launched several new models in H1, such as the Citroën C3 Aircross, Fiat Grande Panda, and Ram ProMaster BEV. More launches are set for H2, including Jeep Compass, Citroën C5 Aircross, and the DS No 8 sedan. These products are helping regain market share in both Europe and North America.
Hydrogen Pivot: The automaker has officially scrapped its hydrogen fuel-cell vehicle program, citing high costs and poor infrastructure support. Instead, it is focusing resources on hybrids and electric vehicles, where demand is stronger.
Cost Discipline & Cash Management: Through inventory reduction, production alignment, and restructuring, Stellantis aims to restore financial stability and funding flexibility.

Recovery Outlook and H2 Expectations

Stellantis is expecting noticeable traction in the second half of 2025. Revenue growth should resume, with a modest but meaningful return to profitability. The company projects stronger free cash flow and gradually recovering margins, though full recovery will depend on external factors such as tariff developments and demand in key markets.

Analysts remain cautiously optimistic, some forecasting a more pronounced earnings rebound in 2026, driven by renewed momentum in North America and fresh model launches from Jeep and Ram.

Why This Matters

For Investors: Stellantis is navigating a turning point. Its ability to deliver on its H2 guidance will influence investor confidence and share performance.
For the Auto Industry: Stellantis’ shift away from hydrogen and toward hybrid/electric vehicles highlights broader changes in technology choices and strategy across global markets.
For Customers: Roll‑outs of new models may mean more competitive options in the SUV, pickup, and crossover markets, potentially with more hybrid and electric variants.

Final Thoughts

Stellantis is facing a difficult start to 2025, marked by steep losses, tariff pressures, and strategic shifts. But the company is signaling a steady recovery in the second half, backed by new leadership, fresh products, and disciplined cost management.

While challenges remain, especially around tariff exposure and shifting consumer demand, a return to low‑single‑digit profitability and better cash flow could mark the early stages of a longer-term turnaround.

FAQs

Why is Stellantis facing losses in the first half of 2025?

Stellantis reported a net loss of about €2.3 billion due to pressures from U.S. import tariffs, weaker vehicle demand, and €3.3 billion in restructuring charges from changes like canceling hydrogen projects.

How significant is the tariff impact on Stellantis’ finances?

Tariffs cost Stellantis approximately €300 million in H1. The company expects the full‑year impact to rise to around €1-1.5 billion unless trade policies change.

What is Stellantis doing to recover in the second half?

Stellantis plans to launch new models, focus on hybrids and EVs, exercise strict cost control, and implement leadership changes under CEO Antonio Filosa. These moves aim to boost revenue, margins, and free cash flow in H2 2025

Disclaimer:
This content is made for learning only. It is not meant to give financial advice. Always check the facts yourself. Financial decisions need detailed research.