New vehicles displayed for sale at a General Motors Co. Chevrolet dealership in Miami, Florida, US, on Saturday, April 5, 2025.
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European auto giants reported a sharp drop in first-quarter profit, and many suspended or cut full-year financial guidance, partially attributing the industry pain to U.S. President Donald Trump’s trade tariffs.
The corporate updates were made shortly after Trump imposed a 25% tariff on automotive imports into the U.S. in early April.
Trump sought to water down these levies on Tuesday, signing an executive order designed to prevent a range of other separate duties — such as an additional 25% tariffs on steel and aluminum — from “stacking” on top of one another.
Some automakers applauded the new stance, although analysts warned the fast-changing nature of Trump’s trade tariffs will likely keep any long-term corporate investment decisions at bay.
Stellantis
Stellantis, which owns household names including Jeep, Dodge, Fiat, Chrysler and Peugeot, on Wednesday said that it was withdrawing its full-year financial guidance due to tariff-related uncertainties.
It added the company was “highly engaged” with policymakers on tariff policies, while taking action to adjust production plans and identify opportunities for improved sourcing.
The multinational conglomerate reported first-quarter net revenues of 35.8 billion euros ($40.7 billion), reflecting a 14% drop from the same period last year.
Mercedes
Germany’s Mercedes also scrapped its 2025 earnings guidance and reported sharply lower first-quarter profit.
The automaker said full-year reporting figures could not “be estimated with the necessary level of certainty,” citing the current volatility over tariffs, mitigation measures and potential direct and indirect effects.
“Assuming current trade policies persist, [earnings before interest and taxes] and free cash flow of the industrial business, as well as the adjusted returns on sales of Mercedes-Benz Cars and Mercedes-Benz Vans, will be negatively impacted,” the company said in a statement.
A giant logo of German automotive brand Mercedes-Benz is seen atop a building in Frankfurt am Main, western Germany, on April 29, 2025.
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Rella Suskin, equity analyst at Morningstar, said Trump’s recent move to ease car tariffs provides “partial relief” to European automakers.
“The tariff adjustment relieves imported auto parts up to 15% of a car’s content,” Suskin said, noting that BMW and Mercedes assemble roughly half of their vehicles sold in the U.S. domestically.
She nevertheless added that “until there is greater certainty around the permanence and quantum of tariffs, the automakers are unable to make long-term capital allocation decisions.”
Volkswagen
Volkswagen was did not join the ranks of Europe’s top original equipment manufacturers (OEMs) that pulled their financial guidance.
Europe’s biggest carmaker, however, did say it expects operating return on sales, net cash flow and net liquidity to come in at the bottom end of its annual forecasts, citing increasing trade restrictions, political uncertainty and emissions regulations.
Volkswagen on Wednesday posted operating profit of 2.9 billion euros for the first three months of the year, marking a 37% decline from the same period last year.
“Given the current volatile global economic situation, it is even more important to focus on the levers within our control,” Arno Antlitz, chief financial officer and chief operating officer at Volkswagen Group, said in a statement.
“This means complementing our great product range with a competitive cost base – so we can ensure to succeed also in rapidly changing global markets,” he added.
Volvo Cars
Sweden-based Volvo Cars ditched its financial guidance for both 2025 and 2026, citing tariff pressure on the global automotive sector.
The carmaker, which is owned by China’s Geely Holding, is thought to be one of the most exposed to Trump’s tariffs given it imports most of its hybrid and electric models from Europe.
Alongside a substantial drop in first-quarter operating profit, Volvo Cars on Tuesday announced cost-cutting plans of 18 billion Swedish kronor ($1.87 billion). It said the so-called “cost and cash action plan” would include reductions in investments and redundancies at its operations across the globe.
Workers inspect cars at the end of the production line of the Volvo factory in Ghent on April 25, 2025.
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Speaking to CNBC’s “Europe Early Edition” before Trump moved to ease auto tariffs on Tuesday, Volvo Cars CEO Håkan Samuelsson said the additional tariff turbulence was making it “very difficult” to provide guidance to investors.
“We see long-term, we need, of course, to come back to some kind of trade deal with the U.S. Otherwise, this is of course going to be very difficult for the business in the U.S.,” Samuelsson said.
Porsche
Germany’s Porsche, which is majority-owned by the Volkswagen Group, trimmed its sales and profit margin forecasts, partially citing the impact of Trump’s tariffs.
The company on Monday said it now expects sales revenue of between 37 billion and 38 billion euros for the 2025 financial year, down from a previous forecast of 39 billion to 40 billion euros.
The Porsche logo is seen outside the premises of the “Exclusive Manufaktur” of German luxury car maker Porsche, where clients can get their vehicles customized in Stuttgart – Zuffenhausen on March 6, 2025.
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“The introduction of US import tariffs leads to negative impacts for the months of April and May 2025 which are included in the adjusted forecast. However, the adjusted forecast does not take into account further effects of the introduction of US import tariffs,” the company said in a statement.
“Currently it is not yet possible to make a reliable assessment of the effects for the financial year,” it added.
— CNBC’s Jenni Reid contributed to this report.