In an unprecedented shift, automakers are completely giving up trying to predict profit and loss for 2025
We already know tariffs have automakers reeling, but it’s becoming even more apparent that the auto industry is headed for uncharted waters. Some automakers — namely GM, Mercedes-Benz, and Stellantis — have all released independent statements that essentially boil down to “it’s impossible to see what’s coming next.” It’s one thing to release some year-end targets or figures with an asterisk next to them; it’s another thing entirely to throw up your hands and say “who knows.”
Stellantis
Stellantis, Mercedes-Benz, and others are getting lost in the tariff storm
Arguably, Mercedes-Benz summarizes it best. In its Q1 report, the Stuttgart automaker claims it’s “not possible to reliably estimate the impacts” tariffs will have on its bottom line. Benz gets the details right, too: it isn’t just the added costs built into the supply chain that will affect profits. The statement covers the side effects of the Trump administration tariffs that are just as hard to account for. Namely, weakening consumer sentiment, retaliatory tariffs and other trade measures, and an environment of overall unpredictable trade policy. All these factors, according to Mercedes, “are leading to an exceptionally high level of uncertainty regarding future business development, which significantly impairs forecasting.”
The story is similar over at Stellantis. After reporting a 14 percent downturn in profits and a 9 percent decrease in consolidated shipments in Q1 2025, the automaker cited similar concerns as Mercedes and suspended all guidance for 2025. Stellantis also laid off 900 hourly workers in US-based operations, which tends to make us think that the outlook isn’t great. Volkswagen Group kept things marginally less cynical, but similarly claimed that earnings would be on the lower side of initial projections. “Tariff-related uncertainties,” as the company says, are keeping everyone guessing.
lindaparton – stock.adobe.com
GM CEO says the company is out $5 billion for tariff costs, further obfuscating future profits
In an interview with CNN, GM CEO Mary Barra claimed that GM will suffer $5 billion in cost increases related to tariffs. While discussing the net profit loss, Barra still pressed pause on further speculation, including completely scrapping any sort of prediction for how 2025 might shake out. What Barra and GM seem certain about is that the company will almost certainly see drastically reduced profits. That’s part of the reason GM changed course just earlier this week, by halting plans to repurchase stock from shareholders. That said, GM still stands alone in setting real pen-to-paper figures on just how impactful tariffs could be to their business. It’s a start, but probably not enough to put stakeholders at ease.
Final thoughts
Most legacy automakers have weathered plenty of economic storms. After all, the oldest manufacturers have their beginnings over 100 years ago. From supply chain crunches in 2020 to the economic woes of the mid to late 2000s, OEMs have always adapted and overcome. But never before have automakers been so lost as to simply shrug when asked how the remainder of their fiscal year looks. It perfectly illustrates just how much fallout there could be from the Trump administration’s tariffs. Hopefully, OEMs are securely strapped in, because there are still three and a half more years to go.