Yesterday, US Senators Jeff Merkley (D-OR), Elizabeth Warren (D-MA), and Joshua Hawley (R-MO) sent letters to the heads of Ford, General Motors, and Tesla, as well as the US heads of Honda, Hyundai, Nissan, Stellantis, Subaru, Toyota, and Volkswagen, excoriating them over their opposition to the right-to-repair movement.
"We need to hit the brakes on automakers stealing your data and undermining your right-to-repair," said Senator Merkley in a statement to Ars. "Time and again, these billionaire corporations have a double standard when it comes to your privacy and security: claiming that sharing vehicle data with repair shops poses cybersecurity risks while selling consumer data themselves. Oregon has one of the strongest right-to-repair laws in the nation, and thatβs why Iβm working across the aisle to advance efforts nationwide that protect consumer rights."
Most repairs arenβt at dealerships
The Senators point out that 70 percent of car parts and services currently come from independent outlets, which are seen as trustworthy and providing good value for money, "while nearly all dealerships receive the worst possible rating for price."
Stellantis is tapping the brakes on the all-electric Ram 1500 REV truck and will push its launch into 2026, the company said Wednesday, citing slowing industry demand for half-ton battery electric pickups. The automaker had originally planned to begin selling the electric truck to customers in the first half of 2025. The automaker will instead [β¦]
Stellantis has re-hired a longtime Ram executive to oversee its truck division, a bright spot for sales as the company seeks to increase profitability.
JEFF KOWALSKY/AFP via Getty Images
The mood inside Stellantis has shifted dramatically after its CEO resigned on December 1.
Dealers and employees are encouraged by early moves made by the interim executive committee.
The automaker's critical relationship with US dealers is on the mend.
Dealers and employees of the struggling Jeep owner who spoke with Business Insider say they and many of their peers feel optimistic about how the company has handled these first two weeks.
They point to quick and sweeping changes made by Chairman John Elkann and his advisory committee, who have vowed to rebuild trust with key stakeholders.
So far, this interim executive committee has re-hired a longtime Dodge and Ram executive and reinstated a US sales chief who was shifted into a different role earlier this year, moves that disgruntled dealers immediately celebrated.
Elkann's executive committee, comprised of current and former executives, has taken over the company's leadership while searching for a new CEO, which they hope to hire in the first half of 2025.
The shift in morale happened almost overnight, sources said. Elkann delivered a rousing speech to employees at Stellantis's North American headquarters the day after Tavares stepped down, and change was swift in the days that followed.
During the employee town hall, Elkann emphatically announced the end of Tavares's "Project Darwin," a ruthless cost-cutting initiative that included several waves of buyouts and layoffs, and even, at one point, sending employees tips on how to find a new job outside the company.
Elkann instead reassured employees that Stellantis "will survive," a person who attended the meeting told BI.
Executive shuffles
Longtime Dodge and Ram executive Tim Kuniskis, who retired earlier this year, returned to the company on Monday. He is stepping back into his role as leader of the Ram brand, which builds Stellantis's highly profitable pickup trucks.
Meanwhile, a shuffle in the North American executive team saw Jeff Kommor reinstated as US sales chief, a move lauded by dealers who were frustrated to see him shifted into a commercial sales role earlier this year.
"The changes will enable us to operate in a structure that will drive the best outcomes for the region, unlock significant potential, and win in the market," a Stellantis spokesperson said in a statement. "A critical lever to accomplish that is a dedicated CEO for the Ram brand who is singularly focused on that brand."
According to people briefed on these decisions, Antonio Filosa, CEO of the Jeep brand and newly named Chief Operating Officer, was a key driver of these moves.
By the end of the second week without Tavares, Stellantis shares had risen about 12% in his absence. This is a sign that investors also feel more encouraged by leadership's new direction, including efforts to reign in oversupply and boost sales.
Dealers get back on board
Tavares lost the crucial support of Stellantis's US dealer body earlier this year, and it appears that the company is prioritizing that relationship in the early days of the post-Tavares reorganization.
Kevin Farrish, a Chrysler-Dodge-Jeep-Ram dealer in Virginia who serves as dealer body president, said the group is looking forward to working with the new "powerhouse team" Elkann's executive committee has built. He specifically mentioned Kuniskis and Kommor, as well as Filosa in his new operating officer role and Matt Thompson, who remains as senior vice president of US retail sales.
"That will truly bring us back to our former glory," Farrish told Business Insider. "We needed change, so provided the changes are correct β and they are thus far β it shows their commitment to fix things."
Controversial Stellantis CEO Carlos Tavares resigned early on Sunday. His term was set to end in early 2026.
Magali Cohen / Hans Lucas / Hans Lucas via AFP
Stellantis CEO Carlos Tavares abruptly resigned on Sunday.
The Jeep-maker's CFO on Wednesday gave one of the first public interviews since the departure.
He described disagreements between the company's board and the former CEO.
A top Stellantis executive on Wednesday gave an internal peek into CEO Carlos Tavares's abrupt exit.
Doug Ostermann, the Jeep maker's CFO, said at an investor conference that he noticed a divergence between Tavares and the company's board on two key issues: operational priorities and how leaders interacted with key stakeholders like dealers, suppliers, and unions.
Tavares stepped down on Sunday. Ostermann said Tavares and the board couldn't agree on how to run the company through the end of his tenure, previously scheduled to last until early 2026.
Most of the disagreements "related to tactical issues on how to run the business over that kind of short-term time period and what actions should be taken in regard to short-term metrics versus longer-term benefit of the company," Ostermann said in response to a question at a Goldman Sachs conference.
Critics of Tavares have argued that his cost-cutting actions,particularly in the Jeep brand, created a short-term illusion of success while fueling a long-term problem for demand in the critical US market. He cut popular models like the Jeep Cherokee and Renegade, which will now return in 2026.
"We need to build back trust," Ostermann said. "There's a strong desire among the management team today to really work on that β and it'll take time."
On the road to recovery
Parting ways with Tavares was a good first step in rebuilding trust, US dealers and union leaders said.
Dave Kelleher, a Chrysler-Dodge-Jeep-Ram dealer in Pennsylvania, told Business Insider he was encouraged by the company's about-face from its previous commitment to Tavares through his initial contract and saw the CEO's departure as a sign that dealers' concerns were being taken seriously.
"It was clear to me, and to other dealers, that we needed to move on quickly and get this thing on the right track," Kelleher said.
Stellantis's US sales this year through September, the most recent report, were down 17% compared to a year ago. Profit-generators Jeep and Ram posted the biggest volume losses, with Jeep ceding significant market share to competitors like Hyundai in the affordable SUV segment.
Stellantis's US dealers released an open letter to Tavares over the summer, accusing the chief executive of "reckless short-term decision-making" that has had "devastating, yet entirely predictable, consequences in the US market."
UAW President Shawn Fain released a statement this week calling Tavares's exit a "major step in the right direction."
"For weeks, thousands of UAW members at Stellantis have been calling for the company to fire Carlos Tavares due to his reckless mismanagement of the company," Fain said in the statement. "We are pleased to see the company responding to pressure and correcting course."
Fain also said that the union is still committed to holding Stellantis accountable amid planned layoffs the union says violate the 2023 collective bargaining agreement.
"We are looking forward to sitting down with the new CEO, backed up by thousands of UAW Stellantis members ready to take action, and discussing their plan to keep making world-class vehicles here in the United States," Fain said.
The Department of Energy (DOE) is on a loan-approval spree in the lead-up to President-elect Donald Trumpβs inauguration, and the winners are all companies manufacturing clean energy solutions on U.S. soil. Companies like Stellantis and Samsung, Rivian, and most recently, EVgo. Trump has promised to cancel any unspent federal dollars under President Joe Bidenβs Inflation [β¦]
Vivek Ramaswamy and Elon Musk have been tapped to lead the Department of Government Efficiency, or DOGE.
Michael M. Santiago, Andrew Harnik/Getty Images
DOGE is set to examine multibillion-dollar federal loans to two Tesla rivals.
Vivek Ramaswamy said the cost-cutting body would "carefully scrutinize" loans to Stellantis and Rivian.
There are concerns Musk may use his role to interfere with his companies' rivals, and regulators.
Vivek Ramaswamy said DOGE would investigate a federal loan worth about $7.5 billion to a Tesla rival.
The Biden administration said Monday it would help finance two battery factories in Indiana being built in a joint venture involving the Jeep owner Stellantis and Samsung.
The announcement provoked a furious reaction from one of the incoming Trump administration's chief cost-cutting advisors.
Vivek Ramaswamy, who was tapped to lead the Department of Government Efficiency alongside Tesla CEO Elon Musk, called the Stellantis loan "illegitimate" and said it should be rescinded.
The former Republican presidential candidate, who has been one of Donald Trump's most vocal supporters, also criticized a $6.6 billion loan to help finance a Rivian electric-vehicle plant in Georgia, which was announced last week.
"DOGE will carefully scrutinize every one of these questionable 11th-hour transactions, starting on Jan 20," he wrote on X.
Announcing the loan, the Department of Energy said the Stellantis-Samsung factories would support up to 2,800 jobs once operational and hire 3,200 workers during construction.
Rivian and Stellantis, which owns brands such as Dodge and CitroΓ«n, both compete with Tesla in the US market.
Musk has already signaled his support for cutting the $7,500 tax incentive for new EVs, a move The New York Times said the incoming Trump administration was considering.
The Tesla CEO and analysts have both said that scrapping the tax credit would disproportionally affect Tesla's rivals, including legacy automakers such as Ford and General Motors as well as EV startups like Rivian and Lucid.
Musk and Ramaswamy aim to cut about $2 trillion in government spending and slash the federal workforce through DOGE, which is planned to be an advisory group, not a government department.
DOGE and the Department of Energy did not immediately respond to requests for comment.
Stellantis CEO Carlos Tavares resigned with immediate effect over the weekend.
AFP via Getty Images
Stellantis CEO Carlos Tavares's resignation comes after months of pressure.
The global auto giant is in turmoil amid poor financial performance in 2024.
Tavares leaves the company locked in legal battles with investors and union workers.
Carlos Tavares tendered his resignation from the top job at global automaker Stellantis over the weekend after a year of mounting pressure to turnaround falling sales and shrinking margins.
Dealers had accused him in September of mismanaging valuable brands that helped lead to the slowdown and a a slew of executive departures.
In October, Stellantis β originally formed by a 2021 mega-merger of Fiat Chrysler Automobiles and France's PSA β said Tavares would stay through the end of his contract in 2026. But by Sunday, things had clearly changed.
Stellantis's US sales through September, the most recent report, were down 17% compared to a year ago. Profit-generators Jeep and Ram posted the biggest volume losses, with Jeep ceding significant market share to competitors like Hyundai in the affordable-SUV segment.
Critics of Tavares have argued that his cost cutting actions, particularly in the Jeep brand, created a short-term illusion of success while creating a long-term problem for demand in the critical US market.
Dealers in September accused Tavares of "reckless short-term decision-making" that has had "devastating, yet entirely predictable, consequences in the US market."
Stellantis has reversed some of the more controversial decisions, like reinstating the Jeep Cherokee and Renegade for 2026, but some dealers previously told BI that the damage is already done.
Investor lawsuits and labor disputes
Tavares also leaves Stellantis in some legal disputes, including an investor lawsuit over the company's poor financial performance. Stellantis has said the lawsuit is without merit and plans to "vigorously defend itself."
The company is also locked in a bitter labor dispute with the United Auto Workers union about manufacturing commitments at an Illinois factory where Stellantis previously built the Jeep Cherokee.
The union has said it's ready to strike and has already begun initiating authorization votes at local units.
Stellantis, in return, has filed a lawsuit accusing the union of violating its contract with the strike threats, citing language that allows for changes to plans based on market conditions.
A special committee has been formed to search for a new CEO, and that process is "well underway," Stellantis said in a Sunday statement. During the search period, Stellantis Chairman CFO John Elkann will lead an interim executive committee, the company said.
Stellantis is facing more upheaval after CEO Carlos Tavares resigned on Sunday.
The Jeep and Chrysler owner is battling sliding sales and fierce competition from Chinese rivals.
Analysts say Stellantis' problems are unlikely to be solved anytime soon.
The owner of Jeep and Chrysler is facing further upheaval after its CEO departed on Sunday.
Shares in Stellantis fell by almost 9% in Milan on Monday after Carlos Tavares, who had been due to step down in 2026, announced he would leave immediately. The stock has now fallen 45% this year, valuing the company at about $36 billion β $8 billion less than Ford.
Tavares has had a bumpy ride at the head of the company that owns brands such as Jeep, Chrysler, and RAM as well as European carmakers Fiat and Peugeot β and analysts warned his exit was unlikely to solve any of Stellantis' many problems.
"Although not a surprise, the early and immediate departure of CEO Carlos Tavares leaves the group without leadership at a time of critical decisions on brand management to reverse market share loss and excess industrial capacity in Europe and North America," wrote Jeffries analysts in a note on Monday.
Here are some of the many speed bumps facing whoever succeeds Tavares in one of the auto industry's toughest jobs:
Tavares trimmed product lineups at Stellantis' US brands during his time as CEO, but the decision to discontinue so many models appears to have left the company out of step with consumer demand.
Jeep, Chrysler, and Ram all have an oversupply problem, with the three brands having more than 100 days of supply at the end of summer compared to the industry average of 77, according to Cox automotive data.
2. Union battles
Stellantis is facing an ongoing battle with the powerful United Auto Workers (UAW).
Stellantis has filed its own legal action against the UAW, accusing it of violating that contract with votes to authorize strikes.
The union welcomed Tavares' resignation, with president Shawn Fain criticizing the Portuguese executive's "reckless mismanagement" of the company in comments to The Detroit Free Press.
Carlos Tavares has stepped down as Stellantis CEO.
FREDERICK FLORIN / AFP via Getty Images
3. Competition from China
Like its rivals, Stellantis is under pressure from a wave of affordable Chinese EVs.
Speaking at an event on the sidelines of the Paris auto show in October, Tavares said the likes of BYD could produce EVs for about a third of the cost of their European rivals, and described competing with them as a "matter of survival."
Stellantis has partnered with China's Leapmotor to sell EVs outside China, but the company will still face stiff competition from Chinese upstarts eyeing expansion in Europe.
Chinese carmakers such as BYD are eyeing expansion in Europe.
Gao Jing/Xinhua via Getty Images
4. Stuttering EV sales in Europe
Stellantis sales are in free fall on both sides of the Atlantic, with Europe down 17% in the third quarter compared with last year.
It's been hit by slowing EV sales in Europe, with a lack of affordable models and the end of subsidy programs in markets such as Germany affecting demand.
Stellantis is suspending production at a factory in Italy as a result, and the company also announced it would shut down a factory in the UK amid concern over EV sales targets in Britain.
Fiat has an electric version of the 500.
Stellantis
5. Trump tariffs
Trump's election victory poses peril for automakers in the US and abroad, and Stellantis is no exception.
The president-elect has floated tariffs on European companies that could affect Stellantis' European brands.
Such charges could have a huge impact on Stellantis, which has about a third of its full-size pickup truck production in Mexico, according to Morningstar analyst David Whiston.
Stellantis did not immediately respond to a request for comment from Business Insider.
Stellantis CEO Carlos Tavares poses at the production line of the Peugeot e-3008 and e-5008 electric car at the Stellantis car factory in Sochaux, eastern France.
FREDERICK FLORIN / AFP via Getty Images
Stellantis CEO Carlos Tavares has left the company, effective immediately, the automaker announced Sunday.
His departure is more than a year ahead of his planned exit and comes amid a stock slump.
Tavares had been fending off criticism from investors, dealers, and union workers for months.
In a statement, Stellantis announced the company's board of directors had accepted Tavares' resignation, thanking him for his years of service and pointing to "different views" as the primary reason for his departure.
"Stellantis' success since its creation has been rooted in a perfect alignment between the reference shareholders, the Board and the CEO," Stellantis' Senior Independent Director, Henri de Castries, said in the statement."However, in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today's decision."
Tavares had served as Stellantis CEO since its creation in 2021, when PSA Group, a French automobile manufacturer,merged with Fiat Chrysler Automobiles to form the newΒ company βΒ the parent of major car brands, including Jeep, Chrysler, and Maserati. He had served as CEO at PSA Group since 2014, where he'd earned praise for returning the company to profitability after near insolvency.
While Stellantis has seen its profits shrink and stock slump dramatically this year, the company's board, in an OctoberΒ statement,Β previously indicated it was "unanimous in its support of Carlos Tavares" and that he would continue to serve in the role until the end of his contract in early 2026.
Still, Business Insider previously reportedthat Tavares, in his attempts to reshape the global automaker, faced increasing criticism from investors, dealers, andΒ union workersΒ alike this yearΒ about his cost cuts, discontinuation of affordable car models, and shrinking profit margins.
The Financial Times reported, in the wake of Tavares' resignation, that his vision for the company and strategy to reverse slumping sales had been the subject of mounting tension between him and other Stellantis board members.
"He was focusing on the short term rather than the group's longer-term and managed to anger everybody in the process," FT reported a person familiar with board members' conversations said.
A second source familiar with the board's conversations told FT there "was a sense that Carlos was moving too fast to retrieve his reputation at the risk of creating problems in the future."
Representatives for Stellantis did not immediately respond to a request for comment from Business Insider.
Mexico is the largest trade partner for the US, accounting for nearly 16% of total trade over the first three quarters of this year. Canada isn't far behind as the country's second-largest trading pattern, accounting for about 14.5% of trade.
Tariffs on goods from Mexico and Canada are especially problematic for the US automotive industry.
Mexico alone exports more than 2.3 million cars a year to the US, according to Commerce Department data.
Foreign and domestic carmakers like Ford, GM, and Nissan have invested decades of time and billions of dollars to establish a well-oiled, cross-border manufacturing and supply chain operation to make vehicles destined for US dealerships.
A 25% tariff would not automatically mean a matching price increase, though it would leave automakers β already struggling with shrinking profit margins β with little room to eat the cost without increasing the sticker price of their vehicles.
Parts for cars, trucks, and SUVs sold in the US can cross the border several times during their production process, thanks to friendly conditions fueled by various regional trade agreements over the years.
Representatives from Ford, Honda, and the American Automakers Policy Council, a lobbying group representing Detroit's Big 3, did not immediately respond to requests for comment.
Nissan, Stellantis, General Motors, and Toyota declined to comment.
This comes at a bad time for US consumers who have seen the average cost of a new car skyrocket more than $10,000 since 2019 to more than $48,000. Many automakers, meanwhile, are planning layoffs and plant closures amid a slowdown in EV demand.
Information from the National Highway Traffic Safety Administration shows that several dozen vehicles made in Canada and Mexico are currently sold in the US.
Here's a closer look at these models, which range from pickups to luxury SUVs and EVs:
BMW Group
A 2024 BMW M240i xDrive Couple
BMW
BMW 2-Series Coupe/Convertible (Mexico)
BMW M2 Coupe (Mexico)
BMW 3-Series Sedan (Mexico)
Ford
Ford Mustang Mach-E.
Paul Marotta/Getty Images
Ford Bronco Sport (Mexico)
Ford Maverick (Mexico)
Ford Mustang Mach-E (Mexico)
General Motors
A 2024 Chevrolet Equinox EV RS in Summit White driving in a downtown area.
Volkswagen and other automakers battling with sliding sales this year.
Hendrik Schmidt/dpa/Getty Images
Car companies are scrambling to adjust to a rapidly changing EV market.
Restructuring efforts include massive job cuts in some cases.
Cost-cutting measures come as automotive execs double down on expensive EV commitments.
A protracted transition to electric vehicles is taking its toll on global car companies, many of which still have yet to profit from battery-powered vehicles.
Demand for EVs, particularly in the critical US market, has slowed considerably this year as green car shoppers get more frugal and practical. This presents a problem for car companies that need mass adoption to deliver profits for these expensive vehicles.
Automotive executives have been scrambling to adjust to this new EV market, pulling back on some EV production and speeding up the development of more popular hybrid cars. As 2024 draws to a close, many manufacturers opt for more drastic cost-cutting options as they continue investing heavily in EV technology.
Major car companies like Detroit's GM, Ford, and Stellantis have begun slashing jobs as they cut costs and reshape their business models for this next stage of the EV transition.
Detroit car giant General Motors laid off about 2,000 workers in two rounds of layoffs in August and November. GM cited cost cutting and changing market conditions in both instances.
The majority of the 1,000 jobs cut in November were white-collar, but the United Auto Workers union reported that about 50 of its members were also affected. According to reports, most affected workers were stationed at GM's global technical center in suburban Detroit, where most design and engineering work occurs.
Prior to the November job cuts, GM also trimmed another 1,000 salaried positions in software and services, according to reports.
GM aims to trim $2 billion in costs as it adjusts its EV strategy and manages slowing sales in the US and China.
Ford to cut 4,000 jobs in Europe amid EV slowdown
Ford said in November that it plans to slash 4,000 positions from its European workforce by the end of 2027. Ford said the Germany and UK divisions are likely to be the hardest hit, as these regions suffer "significant losses."
In addition to these job cuts, Ford also announced curtailed production at a factory in Cologne in the first quarter of 2025.
The cuts to Ford's European business come as companies in the region grapple with intense competition from Chinese EV maker BYD.
In the US, Ford also recently announced an extended pause in F-150 Lightning production, which will affect the roughly 730 hourly workers at that Metro Detroit plant until 2025.
Volkswagen plans historic job cuts in Germany
German automotive giant Volkswagen announced big restructuring actions in October, which could include closing factories and cutting tens of thousands of jobs.
The planned cuts, which still face the scrutiny of German unions, were announced after VW issued its second profit warning in three months. Volkswagen faces similar issues to its rivals, with slowing EV sales in China and stiffer competition from BYD in Europe.
VW's planned restructuring would include closing three German factories for the first time in the company's history, as well as cutting salaries by 10% and freezing wages for two years.
Jeep-maker Stellantis slashes jobs amid tough year
As it struggles with oversupply, it has initiated plans to cut nearly 4,000 factory jobs in the US. Meanwhile, the company laid off 400 white-collar workers in the spring and has offered broad buyouts to salaried workers.
The factory cuts have become a lightning rod for the UAW, accusing Stellantis of violating its contract by removing product commitments from an Illinois factory that built the discontinued Jeep Cherokee.
The UAW has threatened to strike over the alleged violation. Stellantis maintains that its actions fall within its contractual right to change plans based on market conditions. The car company has filed a lawsuit against the UAW in reaction to strike authorization votes.
Tesla reduces global workforce by more than 10%
In an April memo obtained by Business Insider, Tesla CEO Elon Musk told his employees that the company would eliminate "more than 10%" of its staff.
The cuts came after Tesla reported declining sales in the first quarter of the year. After initially weathering a slowdown in EV demand, Tesla is finally feeling the pinch of a more competitive EV market in the US.
Nissan plans to cut 9,000 jobs
Japanese car company Nissan announced in November that it would cut 9,000 jobs and reduce manufacturing output amid poor performance in the critical Chinese and US car markets.
The move came as Nissan reduced its operating profit forecast for the year by 70%.
Tesla announced plans last year for a new factory in Mexico.
JULIO CESAR AGUILAR/AFP via Getty Images
Donald Trump has vowed to hit Mexico with a 25% tariff, which would affect automakers including Tesla.
Tesla announced plans in 2023 for a $10 billion factory in Mexico, whose future remains uncertain.
Analysts said tariffs on cars imported from Mexico would have dire consequences for US automakers.
President-elect Donald Trump said he would impose sweeping tariffs on Mexico β and that could be a problem for Tesla, whose CEO is one of Trump's most vocal supporters.
The announcement, on Truth Social, comes after Trump floated imposing tariffs of 200% or more on vehicles imported from Mexico during the election campaign.
The Mexican peso fell over 1% against the dollar on Tuesday following Trump's post.
The threat of tariffs on Mexico has also put a $10 billion new factory proposed by Elon Musk in limbo.
Tesla announced in March 2023 that it was planning to build a gigafactory near the industrial hub of Monterrey, Mexico.
The project has since been hit by delays and uncertainty, with Musk telling investors earlier this year that it was on pause until the election outcome was clear.
Elon Musk played a key role in Donald Trump's campaign.
AP Photo/Alex Brandon
"Trump has said that he will put heavy tariffs on vehicles produced in Mexico, so it doesn't make sense to invest a lot in Mexico if that is going to be the case," the Tesla CEO said in July.
Musk backed Trump's election campaign and has been given a role to target wasteful government spending. The world's richest person praised Trump's proposed tariffs on Mexico and China in an X post on Monday, saying they would be "highly effective."
Trump's victory has pushed Tesla's project even further into purgatory. Mexico's economy minister said earlier this month he planned to set up a meeting with Musk to clarify the factory's status.
During the campaign Trump vowed to clamp down on automakers building cars in Mexico. The prospect of new tariffs could force US automakers such as Tesla to make some hard choices about operational or planned factories in Mexico.
Investment bank UBS warned that any tariffs on Mexico would be "highly disruptive" to the entire US automotive industry, in an analyst note released after the election. Analysts told BI that the tariffs floated by Trump would deter automakers such as Tesla from investing south of the border.
"Everything's up in the air with Tesla's plant," said Sam Fiorani of AutoForecast Solutions. "Depending on the level of the tariffs, it could complicate the investment in Mexico."
A looming crisis
Fiorani told BI that factories in Mexico were crucial for US manufacturers β particularly the Detroit "Big Three" of Ford, General Motors, and Jeep owner Stellantis β because it offered cheap parts and labor.
GM and Stellantis have around a third of their full-size pickup truck production in Mexico, according to Morningstar analyst David Whiston, while Ford builds its Maverick compact pickup there.
Mexico is also a crucial production hub for Ford's Mustang Mach-E EV, built at the company's Cuautitlan plant.
The country's free trade agreement with the United States, which allows automakers to import vehicles across the border without duties and is up for review in 2026, has attracted other automakers outside the Big Three.
Ford makes its Mustang Mach-E electric vehicles at a plant in Cuautitlan, Mexico.
Scott Olson/Getty Images
Toyota, the world's largest carmaker, announced in 2020 it would move production of its Tacoma pick-up from the US to Mexico, while Nissan and Volkswagen also have factories in the country.
Chinese EV giants BYD and MG, a brand owned by SAIC, have both announced plans to build factories in Mexico.
In September BYD denied reports that it put those plans on hold to wait out the election result.
BYD Americas head Stella Li told Reuters that Mexico was a "very relevant" market because the plant would make cars for local market rather than to export.
Some Mexican officials fear a BYD plant could provoke the new Trump administration, The Wall Street Journal reported.
Other automakers have expanded their presence in Mexico, despite the uncertainty of the election and the prospect of tariffs under a second Trump term.
Jeep is building its first EV, the Wagoneer S, at its Toluca plant in Mexico, per a breakdown of the company's 2024 manufacturing operations.
The CEO of Chrysler, another Stellantis brand, also recently confirmed it was expanding a factory in Mexico as a "relief valve" for US truck production, after the Journal reported the company was considering making its bestselling Ram 1500 truck south of the border.
Germany's BMW, meanwhile, is investing 800 million euros ($861 million) in expanding its factory at San Luis PotosΓ, Mexico. It's expected to the company's latest range from 2027.
"Imposing tariffs would be a deterrent. It would make it difficult if you're planning on exporting to the US," Stephanie Brinley, an automotive analyst at S&P Global, told BI. "It makes building a plant in Mexico more expensive and less attractive."
Costly dilemma
Brinley added that many automakers with a significant US presence had been operating in Mexico for decades, meaning it would be expensive as well as highly difficult to shift production in response to tariffs.
The Toyota Tacoma is another vehicle produced in Mexico.
Alanis King
"That would be a massive investment issue ... it would probably require a staggering amount of money and would not be something they could do quickly. Changing that manufacturing footprint would take at least five years," she said.
Ultimately, Brinley said many US automakers may decide it's in their best interests to stay put, despite the tariffs β something that she said could lead to higher prices for Americans.
"That's where the tariff ends up hurting the consumer, because these companies are not going to just eat the tariff. Some, if not all of the cost would be passed on to consumers," Brinley said.
Tesla, GM, Ford, and Stellantis did not respond to requests for comment from BI.
Volkswagen has announced plans to close three production facilities.
Horacio Villalobos/Getty Images
Major automakers around the world have announced layoffs and factory closures in recent weeks.
Ford, GM, Stellantis, and Volkswagen Group all plan to lay off workers in the coming months.
This is due to unprofitable EV investments, Chinese market losses, and more domestic competition.
Major automakers around the world have announced multiple rounds of layoffs and factory closures in recent weeks as they struggle to turn a profit on EVs and face a potential onslaught of cheaper competition.
Ford, General Motors, and Stellantis plan to slash thousands from their workforce in the coming months. Volkswagen has announced plans to shutter three of its factories in Germany, which could come with massive layoffs.
Unfortunately for the world's major carmakers, they aren't facing one issue but an agglomeration of several significant interconnected challenges at once. Add to that an ultracompetitive business with high overhead costs and low profit margins, and things quickly get very difficult.
When market dynamics, regulatory requirements, and financial costs shift dramatically in a relatively short period of time, the results can be dire. That's what we're seeing play out.
The all-electric Chevrolet Silverado EV at the 2022 Los Angeles Auto Show.
Josh Lefkowitz/Getty Images
A massive and expensive pivot to EVs has failed to turn a profit
The auto industry has invested or announced plans to invest more than $300 billion in US EV and battery production since 2016, the NRDC estimates. That's led to a slew of new models on the market and (relatively) cheaper pricing for consumers.
But despite that growth β and with EVs accounting for roughly 10% of US auto sales β companies not named Tesla have struggled to make their EV businesses profitable.
GM, for example, has invested $35 billion in its EV and autonomous-driving businesses, which has led to new electric models like the Hummer EV and Cadillac Lyriq. Despite the warm reception from the public, the company's profits this year are entirely driven by the strong sales of its internal-combustion trucks and SUVs.
The company's Model e EV division lost nearly $3.7 billion during the first nine months of this year, including $1.2 billion in the last quarter alone.
A Ford Mustang Mach-E.
Tim Levin/Insider
The rapid transformation of the Chinese market
The exponential growth in China's appetite for cars over the past two decades made it a steady profit center for global automakers like VW Group and GM. From 2014 to 2018, GM took in anΒ average of $2 billionΒ a year from its Chinese joint ventures.
But in recent years, Chinese consumers have increasingly turned to competitive domestic automakers like BYD and the Geely Group, whose brands have sold 1.6 million vehicles in the market so far this year.
GM's market share in the country peaked at around 15% in the middle of the last decade and was down to just 6.5% in the most recent quarter.
German carmakers are losing out to Chinese EV upstarts like BYD.
Daniel Pier/NurPhoto via Getty Images
So far this year, Volkswagen Group's sales in China, its largest market, are down about 10% over last year, and the company predicts the situation may deteriorate further.
In response to the potential competition, European leaders have readied tariffs on cars imported from China. VW warned that potential retaliatory tariffs on European cars by China could only make things worse.
An increasingly competitive domestic market
Competition for automakers in their domestic markets has heated up.
Price seems to be a major factor. The average price of a Stellantis vehicle is around $56,000, far above the industry average of $48,000.
The company had to offer aggressive incentives (on top of lower production) during the third quarter to help dealers clear the glut of unsold cars off their lots. Analysts say inventory levels are improving at Stellantis and industry-wide as automakers react to a slower sales environment.
But uncertainty looms large as President-elect Donald Trump threatens tariffs on all goods imported into the United States and eyes ending tax credits for electric vehicles, which could be another headwind for sales, industry experts say.
