Stellantis Faces Downgrade Due to Major Challenges from Tariffs | Carscoops

      Due to its dependency on imports, Stellantis stock may face downward pressure.

      UBS has lowered Stellantis' rating from Buy to Neutral in light of Trump's tariffs. The automaker relies on imported vehicles for approximately 35% of its U.S. sales. With declining sales, the company may struggle to regain lost market share.

      While tariffs are intended to benefit American automakers, the situation is quite the opposite for many, as they rely on imports for vehicles and parts.

      This is not a surprising finding, yet it has raised concerns on Wall Street, leading to volatility in the stock market. The latest alert comes from UBS, which downgraded Stellantis to neutral, following a similar action for General Motors.

      UBS analyst Patrick Hummel noted that the 25% automotive tariff impacts Stellantis more severely than some competitors, primarily due to the company’s 35% share of U.S. sales coming from imported vehicles.

      Included in these imports are the Chrysler Pacifica and Dodge Charger Daytona, produced at the Windsor Assembly in Canada. In Mexico, the Toluca Assembly manufactures the Jeep Compass and Wagoneer S EV, while the Saltillo Truck Assembly Plant focuses on heavy-duty Ram pickups.

      This creates a considerable challenge, but imports aren't the sole concern. U.S. sales have been declining, and Hummel anticipates that the company will find it difficult to regain market share as demand continues to weaken. This could lead to potential losses and negative free cash flow.

      Despite the downgrade, Stellantis stock showed resilience, closing up 5.64% at $9.37 per share, which is slightly below Ford’s 4.07% increase, closing at $9.71.