European carmakers on Tuesday saw share prices fall across the industry after President-elect Donald Trump announced big tariffs, Stellantis revealed plans to close its historic Luton plant and dissatisfaction with the EU’s tougher emissions rules. surfaced and faced an eventful day.

President Trump’s tariffs threaten supply chains

President Trump’s pledge to impose 25% tariffs on imports from Mexico and Canada and 10% on Chinese products shocked the global auto industry. Mexico, a major hub for auto production, exported 1.57 million cars to the United States from January to July this year, many of which were made by European automakers.

Stellantis and Volkswagen are among the companies most affected by the proposed tariffs. Stellantis relies on Mexico for 30% of its North American sales, with its Saltillo and Toluca plants producing high-margin vehicles such as the Ram pickup and Jeep Compass SUV. Analysts estimate that if the tariffs are fully implemented, Stellantis’ pre-tax profits could fall by more than 3.6 billion euros. Volkswagen, which imports 41% of its U.S. car sales from its Puebla plant, will face significant cost increases on models such as the Jetta and Tiguan.

Tariffs also threaten to disrupt integrated supply chains. The auto sector could face widespread production delays and higher costs, as the U.S. imports nearly four times as many auto parts from Mexico as from Europe. Some manufacturers may move production to the United States to cushion the impact, but such a move would require significant investment amid an already difficult market downturn.

Stellantis closes Luton factory amid EV push

In the UK, Stellantis has announced plans to close its van factory in Luton in April 2025, putting 1,100 jobs at risk. The closure marks the end of 120 years of car production in Luton, a decision largely driven by the UK’s Zero Emission Vehicle (ZEV) mandate. The mandate requires 22% of all new car sales to be electric by 2024, with failure to do so subject to fines of £15,000 per car. Stellantis said these pressures were central to the decision.

The company is investing £50 million to expand production of medium-duty electric vans, with plans to consolidate operations at its Ellesmere Port facility, the UK’s first all-battery electric manufacturing site. Hundreds of Luton employees could be redeployed, with unions and local leaders slamming the decision as a “slap in the face” to the community. Stellantis’ move reflects a broader trend of automakers scaling back operations under financial stress, with Ford and Volkswagen also announcing layoffs and plant closures.

Scholz opposes EU fines as industry challenges grow

German Chancellor Olaf Scholz criticized EU emissions fines that penalize automakers that fail to meet net-zero targets. Under current EU rules, manufacturers must reduce emissions by 15% by 2025 and 55% by 2030, with fines of €95 per gram of CO for exceeding the per-vehicle limit. imposed. Scholz argued that these funds would be better reinvested in modernizing production to meet emissions targets.

Germany’s auto sector, which accounts for 5% of gross domestic product (GDP), is frustrated by fines imposed as consumer demand for electric vehicles (EVs) slumps. In the UK, BEVs accounted for just 18.1% of new car sales in October, well below the 2024 target of 22%. Stellantis and other manufacturers are campaigning for more flexibility in emissions targets, warning that failure to adapt could lead to more accidents. Closures and job losses.