Stellantis is considering revising its production expansion strategy in Mexico in response to potential tariffs proposed by president-elect Donald Trump, as reported by Bloomberg. Chris Feuell, CEO of Ram, acknowledged that the company might need to review its production and supplier networks to minimize the impacts of new trade policies. During an interview at the Los Angeles Auto Show, Feuell stated: “Of course, this is an aspect we’re including in the planning of various scenarios we’re developing.”
Trump’s tariffs worry Stellantis, which aimed to move production to Mexico for lower costs
“One question we’re trying to answer is: ‘How should we think about production and sourcing strategies, given where tariffs or other administrative decisions might go?'”, noted Chris Feuell, CEO of Ram and Chrysler.
According to BNN Bloomberg, Feuell raised concerns about Trump‘s proposal to eliminate the $7,500 tax credit for electric vehicle purchases. She emphasized that losing this incentive could further hinder electric vehicle adoption, which is already hampered by high consumer costs.
Trump has also promised to penalize automakers that import cars from Mexico to the United States. This latest move is part of Stellantis’ strategy to shift some of its production base outside the United States to nations with lower costs. Stellantis’ profit decline in the first half of 2024 has led to layoffs and production adjustments, with additional layoffs announced recently at the Toledo facility.
Stellantis is struggling to maintain profitability this year, and while wanting to continue toward a more electric vehicle-focused strategy, the company is willing to consider introducing other alternative energy models to increase sales. Feuell stated that while remaining true to company strategy is crucial, she doesn’t rule out adapting their direction regarding the product range, suggesting that a review of the vehicle mix might be a consideration to respond to market circumstances.