Stellantis NV

Morgan Stanley downgraded Stellantis to Underweight from Equal Weight and cut its price target to $5.20 from $8.00, sending the automaker's shares down more than 2% on Monday. The rating change came as part of a broader review of European automakers by analysts led by Javier Martinez de Olcoz Cerdan, who cited changes in Stellantis' inventories and incentives and said the product pipeline is lagging behind peers, potentially limiting the company's ability to reduce investment as cash generation declines. Morgan Stanley said Stellantis has the widest risk/reward skew in the sector, flagging refinancing as one potential risk, while asset disposals or changes to the United States-Mexico-Canada Agreement could affect its outlook in other scenarios. In the same review, Morgan Stanley upgraded Renault to Equal Weight from Underweight and raised its price target to €31 from €25, calling it the company with the largest increase in its estimates, and maintained Overweight ratings on Mercedes-Benz and BMW, lifting its Mercedes-Benz target to €59 from €58 and its BMW target to €76 from €74, with Mercedes-Benz remaining its preferred stock in the sector. Volkswagen's price target was raised to €89 from €77 with its Equal Weight rating maintained, Porsche stayed Underweight, and Morgan Stanley said it believes the cyclical margin bottom is behind us, raising its 2026 and 2027 estimates for the European automotive sector for the first time since April 2024, with forecasts now slightly above consensus.

Stellantis has pushed back production at its idled Belvidere Assembly Plant in Illinois, now targeting pilot production of the next-generation Jeep Cherokee in the first half of 2028 and retail production in the second half of 2029, roughly two years later than its previous 2027 initial-production target. The plant has been dormant since February 2023, when Stellantis ended Jeep Cherokee production and laid off over 1,300 employees. Stellantis announced it is raising its Belvidere investment to more than $800 million, up from a previous commitment of $600 million or more, and confirmed the plant will build the next-generation Cherokee on its new STLA One platform, the first vehicle built in the US on that modular design. According to UAW Local 1268 president Matt Frantzen, citing internal records and talks with company executives, the updated schedule pushes pilot production into the first half of 2028 and retail production to the second half of 2029. Separately, Unifor, the Canadian union representing Detroit Three autoworkers, said Stellantis has signed an MOU with Canadian armored-vehicle maker Roshel outlining a potential sale of its Brampton, Ontario assembly plant, which has been idle since 2023; union president Lana Payne said Stellantis has yet to provide the official year's notice required by the collective agreement and called it a lose-lose scenario. The two situations are linked: Brampton had been scheduled to build the Jeep Compass, with retooling beginning in early 2024 before Stellantis paused it in 2025 and then, that October, moved Compass manufacturing to the US entirely, the same reassignment that sent the model to Belvidere. Hedge fund ownership fell to 26 funds in the second quarter from 32 in the first, and short interest stands at a moderate 6.53% of the float.

Unifor and Stellantis have reached an impasse in collective bargaining negotiations after 10 days of intensive talks, with the union's Master Bargaining Committee pausing negotiations in Toronto and actively considering next steps. Central to the impasse is the future of Stellantis' Brampton Assembly Plant, and the company has yet to confirm forecasted plans for the Windsor Assembly Plant and Etobicoke Casting Plant. Stellantis has offered only conditional agreement with the economic pattern settlement tied to the closing of Brampton, and in August of 2026 the company notified Unifor it was seriously considering the closure and sale of the facility to a third party, confirming it has signed a Memorandum of Understanding with defense industry supplier Roshel, which has expressed interest in purchasing the plant. Unifor has said there will be no tentative settlement without a suitable resolution for Local 1285 members at Brampton, and absent a resolution, formal contract talks are paused until further notice. The current collective agreement expires on September 20, 2026 at 11:59pm.

Chinese automaker BYD Co. has inquired about taking over an idle Stellantis NV plant in the Toronto suburbs, according to Brampton Mayor Patrick Brown, who said BYD approached him about six months ago to discuss making buses at the factory. The plant, which has not produced vehicles since late 2023, was being retooled for the Jeep Compass until Stellantis halted that plan amid US tariffs on foreign autos. Brown also received inquiries from Leapmotor International, a joint venture between Zhejiang Leapmotor Technology Co. and Stellantis, and from an Italian automaker. Unifor, the union representing workers, said Stellantis is considering selling the plant, and Brown noted that global companies want Canadian manpower if the US trade stance persists. The future of the 40-year-old factory remains uncertain as President Donald Trump's 25% tariffs on foreign cars and trucks, with a possible increase to 50% in January, cloud the outlook for Canadian auto exports.

Global automakers face a doubled problem after President Trump declared that from January 1 next year, the US will impose 50% tariffs on Canadian-made vehicles, auto parts, and trucks. One industry executive said, "We must not let Canada be treated like China in January." According to Barclays, Canadian-made vehicles account for only about 6% of US sales in 2025, but if tariffs double, Ford Motor, General Motors, Stellantis, Toyota, and Honda will face significant additional costs on their main models. Moreover, higher tariffs on parts would hit the entire US automotive supply chain. Some industry sources interviewed by Reuters suggested that since the tariffs are months away, there is still room for both sides to reach an agreement. Toyota and Honda are expected to be the most affected, as according to the Canadian Automobile Manufacturers Association, they account for over 75% of the 1.2 million vehicles produced in Canada in 2025, most of which are exported to the US.

Ford Motor Company is expanding its Bronco lineup with a hybrid version due in 2027 and a Bronco-based pickup toward the end of the decade, while its luxury brand Lincoln will build a Bronco-based off-roader. These moves are part of a larger plan to refresh 80% of Ford's North American portfolio by 2029, which includes a $25,000 hybrid crossover and five vehicles under $40,000, as well as targeting half of its global volume to be hybrid, EV, or extended range by 2030. The strategy follows Ford's $19.5 billion charge and reversal of electric vehicle plans, which included canceling the F-150 Lightning, though it will return as an extended-range option. Ford also plans to add new Mustangs, including a four-door variant, and is banking on its low-cost Universal Electric Vehicle platform for future EV profitability, with the Fathom midsize electric truck due next year. The company faces competition from Stellantis, which is also planning affordable options to regain market share.

Ford and Stellantis each fell 4% after President Trump announced 50% tariffs on all Canadian vehicles and parts starting January 2027. Ford stock was down to $13.87 and Stellantis to $5.19 in Monday mid-morning trading, while General Motors slipped 2% to $86.28. The announcement came in a Truth Social post in which Trump accused Canada of ripping off the United States and cited a $60 billion trade deficit. The move follows the collapse of U.S.-Canada trade talks late Friday, with Canada's ambassador Mark Wiseman saying the written trade text diverged from what Canada believed it had agreed to. Washington separately applied 50% tariffs to about $20 billion of Canadian goods, and Canada announced counter-tariffs scheduled for September 8.

Stellantis is recalling nearly 1 million Jeep, Chrysler, Dodge and Ram vehicles due to a software glitch affecting backup cameras. The recall spans U.S. and international markets and centers on camera displays that may fail to show images when drivers reverse. Stellantis plans to correct the issue primarily through an over the air software update instead of physical repairs at dealerships. The event highlights the growing reliance on software for advanced driver assistance systems, as well as the potential impact on customer trust and brand perception.

Stellantis is considering the closure and sale of its Brampton Assembly Plant in Ontario, Canada, according to workers union Unifor. The union said the company informed it on August 12, 2026 of its intent to open discussions with another firm about a potential sale. More than 2,200 Unifor Local 1285 members have been on layoff since the plant was idled in December 2023 for retooling to produce the Jeep Compass electric SUV, but Stellantis later moved that production to the US. Unifor argues the shift breaches its collective agreement and pledges tied to government funding, and says the potential shutdown highlights the effects of US auto tariffs. Stellantis has not yet issued a formal written notice of closure, which under the collective agreement requires at least one year's notice.

Automakers including Stellantis and Volkswagen are turning to new lubricant blends as motor oil shortages worsen due to the Iran war, the Financial Times reported. Supply chains for high-quality Group III base oils were severely disrupted after Iran struck Shell's gas-to-liquids plant in Qatar in March, and prices have nearly tripled from prewar levels to about $4,000 per ton in Europe and the U.S. Stellantis said it evaluated reformulated lubricants and secured alternative products that meet industry standards, while Volkswagen said it has secured supplies for now and is evaluating additional sourcing options. Toyota and Suzuki have also secured alternative supplies, and Nissan informed dealers of reduced production capacity for most lubricant products and said it would constrain supplies of its high-quality motor oil. Holly Alfano, CEO of the Independent Lubricant Manufacturers Association, warned that alternative suppliers have limited volumes and any renewed shipping disruption, refinery outage or other supply shock could rapidly worsen the situation.

Stellantis is weighing the sale of its Brampton, Ontario assembly plant, a move its union Unifor tied directly to US tariffs on Canadian goods. The disclosure came just days after the automaker reported a second-quarter net profit of 293 million euros, reversing a year-earlier loss of 1.87 billion euros, with adjusted operating income more than tripling to 773 million euros. North American market share rose to 7.4% from 7%, and Ram posted its fourth straight quarter of year-over-year sales growth, up 6%, helped by renewed demand for the reintroduced Hemi V8. However, adjusted operating income missed the 914 million euro consensus estimate, and the stock fell nearly 10% on the news before recovering part of that loss. Unifor said Stellantis notified the union it may close and sell the Brampton plant, which employed 2,200 workers before idling, and the company cited US tariffs on Canadian goods as the driver.

Opel is expanding its partnership with China's Leapmotor to build a new SUV, tapping the Hangzhou-based company's expertise on electric vehicles and low-cost production while cutting 650 engineering jobs at its Ruesselsheim development centre. Stellantis, Opel's parent company, announced the cuts in April from a total workforce of 1,650 at the site, amid a wave of job cuts across the German auto industry. Opel boss Florian Huettl said the partnership would combine German industrial know-how with Chinese software expertise, noting Chinese carmakers captured 9 percent of the EU market in the first five months of 2026 and 10.5 percent in June. The workforce at Ruesselsheim has shrunk from a 1970s peak of around 42,000 employees to approximately 6,800 by the end of 2025, and the city is now seeking to diversify economically, including plans to transform 140,000 square meters of released industrial land into a green hydrogen technology hub.

General Motors, Ford Motor, and Stellantis plan to tell the Trump administration that its proposal to tighten automotive rules of origin under the United States-Mexico-Canada Agreement would add at least $2 billion a year in costs and could hurt their competitiveness against foreign automakers. According to estimates by two of the major U.S. automakers, if requirements are introduced mandating that vehicles contain at least 50 percent U.S.-made parts, or if the North American parts content requirement is raised from the current 75 percent, the Detroit Three would face at least $2 billion in additional annual costs, on top of cost increases from various tariffs introduced since last year. General Motors has already indicated that its total tariff-related costs this year could reach $2.5 billion to $3.5 billion, potentially equivalent to more than 20 percent of its operating profit, while Ford estimates its net tariff burden at about $1 billion. The Office of the United States Trade Representative did not respond to a request for comment.

UBS downgraded Stellantis to Neutral from Buy, citing insufficient progress on the automaker's U.S. recovery despite a healthy market. Analyst Patrick Hummel noted that higher volumes have not translated into expected profits, dealer inventories remain elevated, and customer uptake of new products has lagged guidance. The firm also flagged growing competitive pressure in Enlarged Europe and the Third Engine regions, which further challenges Stellantis' ambitious 2028 business plan targets. UBS cut its adjusted operating income forecasts by 12% to 18%, projecting 3.0 billion euros with a 1.9% margin for 2026 and 4.7 billion euros with a 2.9% margin for 2027. The price target was lowered to 5.8 euros from 9.5 euros, implying a valuation of 6 times 2027 earnings.

Stellantis reported second quarter net profit of €293 million, missing analyst expectations of €464 million, sending its US-listed shares down 3% to about $6. Revenue rose 13% year-over-year to €43.5 billion, ahead of the €42.83 billion consensus, driven by higher volumes and a 32% revenue jump in North America. Adjusted operating income improved to €773 million from €213 million a year earlier, but fell short of the roughly €903 million to €914 million analysts had forecast. The company reaffirmed its 2026 guidance for mid-single-digit revenue growth and a low-single-digit adjusted operating income margin, while estimating a net tariff headwind of €1 billion to €1.2 billion for the year.

President Donald Trump claimed that his tariffs have saved General Motors, but GM’s regulatory filings show the import taxes will cost the company between $2.5 billion and $3.5 billion this year. Trump made the remarks during a visit to a GM facility in Michigan and in a Fox News interview, while GM’s July 21 SEC filing revealed the projected tariff hit. The other two Detroit automakers are also bracing for significant charges, with Ford expecting $1 billion and Stellantis projecting about $1.5 billion in 2026. GM has raised its 2026 profit outlook to between $14 billion and $16 billion and plans to spend at least $6 billion to expand domestic production of full-sized trucks and SUVs.