FYI: The automotive industry is undergoing significant transformations, driven by regulatory changes, evolving consumer demands, and increasing global competition.
The global car industry is experiencing a dramatic shift. Established automakers are striving to maintain profitability amidst the surge in electric vehicle development. Simultaneously, new players are disrupting the traditional market, causing established names to struggle to remain relevant. This tumultuous period is marked by unexpected market exits, challenging U.S. tariffs, bold strategic shifts, and significant brand overhauls.
The Impact of U.S. Tariffs
In April 2025, the United States implemented a 25% tariff on all imported vehicles and certain automotive parts to boost domestic production. This measure has affected foreign carmakers significantly, with companies like BMW and Mercedes-Benz seeing cost hikes of up to USD 11,894 per vehicle. Japanese manufacturers, including Toyota and Honda, foresee billions in additional costs, as Toyota alone anticipates USD 1.2 billion in tariff-related expenses for April and May. The tariffs have driven U.S. car prices up by 2.5% in April, affecting models priced under USD 30,000 the most.
To counteract these challenges, automakers like Mercedes and Volvo are increasing their U.S.-based manufacturing. However, the longer-term effects of these tariffs are still unfolding, with ongoing supply chain adjustments and cost implications.
Stellantis Group’s Financial Challenges
Stellantis, the parent company of Jeep, Peugeot, and Fiat, has faced significant hurdles in transitioning to electric vehicles. A 12% decline in shipments and operational challenges led to a 70% drop in net profit to EUR 5.5 billion, with revenues also decreasing by 17% to EUR 156.9 billion. The company’s market share in North America dipped from 9.6% to 8%, while U.S. sales fell by 16%. Additionally, Stellantis experienced a 15% drop in global EV sales, which totaled 314,500 units due to stiff competition from Chinese manufacturers and reduced demand in Europe.
Despite these challenges, Stellantis is investing in its electric future, including a USD 400 million upgrade to Michigan plants and a joint venture with China’s Leapmotor to enhance its EV portfolio.
Maserati’s Sales Slump
Maserati’s global sales plummeted by 57% in 2024, leading to an EUR 82 million operating loss. Key markets like the U.S. and Italy saw significant declines, with sales dropping 37% and 42%, respectively. Production in Maserati’s Italian plants reduced by 64%, affecting models such as the MC20 supercar.
Former CEO Carlos Tavares emphasized the need to strengthen Maserati’s luxury brand identity. New marketing leadership aims to elevate the brand’s image as Stellantis plans to introduce more electric models like the MC20 Folgore.
Nissan’s Financial Woes
Nissan faced a difficult fiscal year, reporting a JPY 676 billion net loss for 2025. A 14.3% sales decline in China and a reduction in U.S. market share to 5.8% contributed to these setbacks. A failed merger attempt with Honda further compounded Nissan’s troubles. To address these issues, Nissan is cutting jobs, shutting down facilities, and accelerating the development of new models like the plug-in hybrid Rogue SUV.
Porsche EV’s China Sales Decline
Porsche’s electric vehicle sales in China fell by 28% in 2024, with a further decline of 42% in early 2025. Competition from domestic brands like Xiaomi, offering comparable performance at lower prices, contributed to this downturn. Porsche plans to cut dealership numbers by over 30% and enhance its online sales presence to adapt to the evolving Chinese market.
Tesla’s Market Challenges
Tesla faces fierce competition from Chinese manufacturer BYD, which outperformed Tesla in global sales with over 4.25 million new energy vehicles sold in 2024. Tesla saw a 13% decrease in deliveries in the first quarter of 2025. Challenges include Elon Musk’s controversial public behavior, limited model updates, and safety concerns with its Autopilot system. Tesla must strategically adapt as competitors like BYD expand internationally.
Mercedes-Benz EV Division’s Hurdles
Mercedes-Benz’s EV division saw a 23% drop in global sales, leading to financial pressures and a 28.4% decrease in net earnings. To address these challenges, Mercedes-Benz plans to launch a more balanced lineup of electric and conventional vehicles by 2027. The company is also reassessing its mid-term profitability targets and exploring cost reduction strategies.
Volkswagen’s Strategy in China
Faced with declining sales in China, Volkswagen is taking strategic steps to maintain its market stronghold. Although overall deliveries decreased by 9.5%, the ID series saw a 23.8% increase in sales. Volkswagen plans to introduce 30 new models in China by 2027, including 20 New Energy Vehicles, to capture pivotal growth segments.
Jaguar’s Identity Crisis
Jaguar’s 2024 rebranding initiative encountered significant pushback. The shift towards becoming an all-electric luxury brand stirred controversy over abandoning Jaguar’s traditional elegance. Despite internal dissent and market skepticism, Jaguar stays committed to its electrification strategy, with the all-electric Type 00 model set for release in 2025.
Conclusion: The automotive industry is weathering a period of intense transformation. Legacy brands must navigate new challenges, from regulatory changes to evolving consumer expectations, while newcomers redefine the landscape. Amid competitiveness and innovation, the future of these automakers will rely on agility, strategic investment, and renewed brand identities.
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Steven Hale, Editor of Automotive.fyi
