Title

Presentation

Stellantis N.V. misses on earnings expectations. Reported EPS is $-0.05254 EPS, expectations were $0.2455.

Operator: Ladies and gentlemen, welcome to the Stellantis First Quarter 2025 Shipments and Revenues Call. I will now hand you over to your host, Mr. Ed Ditmire, Head of Investor Relations at Stellantis. Mr. Ditmire, please go ahead.

Edward Ditmire : Hello, everyone, and thank you for joining us today as we review Stellantis’ Q1 2025 shipments and revenue update. Earlier today, the presentation for this call, along with the related press release, were posted under the Investors section of the Stellantis website. Our call is hosted today by Doug Ostermann, Chief Financial Officer at Stellantis. And after prepared remarks, he will be available to answer questions from the analysts. Before he begins, I want to point out that any forward-looking statements we might make during today’s call are subject to the risks and uncertainties mentioned in the safe harbor statement included in Page 2 of today’s presentation. As customary, the call will be governed by that language. Now I’ll hand the call over to Doug.

Doug Ostermann: Thank you, Ed, and hello to everyone. Thank you for joining the call today. The theme at the top of the page is focused on execution, which I think is a way of saying that we’re focused on things that we can control, amidst what is a very turbulent backdrop. There are 3 important topics we want to cover today. First is the top line performance in Q1 in terms of revenue and shipments, which was difficult and not where we want to be. At the same time, we are seeing important progress resulting from our commercial recovery actions. Second, we’re executing well on the start of our 2025 new product wave, filling in product gaps and expanding our opportunities. And third, I’ll discuss how the company is positioned vis-a-vis the tariff dynamic and the management team’s focus on reducing these impacts.

Now let’s look at a summary of today’s presentation. First, in terms of the top line results, we had challenging year-over-year comparisons in the period. Shipments of 1.22 million units were down 9%, while revenues of EUR 36 billion were down 14%. At the same time, we were encouraged by initial progress on our commercial recovery efforts. For example, our EU30 market share is edging higher, and the U.S. is seeing improvement in retail order intake. A big contributor is our new product wave. Q1 saw strong launch execution with 3 all-new products kicking off in Europe, along with 3 refreshed products, including the Ram heavy duty. Turning to the — of course, to the issue of the day with tariffs. We are taking actions to protect the company in the short term, including temporary shutdowns and layoffs.

While engaging with relevant governments on the policies themselves. Stellantis, of course, appreciates the tariff relief measures decided by President Trump this week, and we’re assessing the impact of the updated policy on our North American operations. I’ll talk a little bit more about that later in the presentation. Nonetheless, we remain subject to extreme uncertainties. The policy framework on tariffs has shifted since we initially set our 2025 expectations and is continuing to involve — to evolve. And so we’re taking what we believe is the appropriate step of temporarily suspending our financial guidance. I’ll come back to the tariffs and guidance later in my prepared remarks, but now let’s go into more detail on what occurred in Q1 of 2025.

First, let’s talk about how we’re executing on our commercial recovery actions. We said last quarter, the recovery will be driven in large part by product with 10 all-new products planned in 2025 as well as full year benefits from the many that were launched in 2024. The first 3 of the all-new products, the B segment, Fiat Grande Panda, the Citroën C3 Aircross and the Opel/Vauxhall Frontera began production in February, filling in product gaps where predecessor products had been out of the market for several quarters. The first quarter also saw the launch of the updated Ram 2500 and 3500 medium- and heavy-duty trucks and the refreshed Opel/Vauxhall Mokka. We said last year, we had to improve the timeliness of our new product launches after 2024, which frankly saw too many delays.

And I’m happy to report that in Q1, execution was very consistent with our latest planning. Next, let’s look at how our new products and other go-to-market improvements are driving our recovery. In Europe, where we’ve now launched 7 major all-new products in the last 6 months, we’ve begun to see sequential market share improvement. Q1 2025 share of 17.3% was 190 basis points higher than Q4 of 2024 and, in fact, was the highest quarterly level since Q1 of 2024. European shares improved particularly in electrified products, as Stellantis climbed to the #1 position in hybrids in Q1 and climbed to the #2 in BEVs with Q2 to benefit more fully from the new B segment products. We have the opportunity to continue our market share momentum in Europe.

Turning to the United States. The commercial recovery is at an earlier stage. After successfully reducing inventories and recalibrating pricing in the second half of 2024, the company is seeing improvement in the retail channel in key nameplates like the Jeep Grand Cherokee and the Compass and in Ram light- and medium-duty trucks. We’re also seeing strong retail order intake from our dealers. Overall, I’d say we’re seeing encouraging progress on the commercial recovery. Now let’s turn to the shipment and revenue comparisons. Consolidated shipments fell 118,000 units or 9% year-over-year to 1.22 million. And let’s break that down a bit geographically. A little over 80,000 units of the decline was in North America, where shipments fell 20% year-over-year, much more steeply than the sales due primarily to a later start of production in certain factories in January after extended downtime.

And secondarily, due to the transition to refreshed and upgraded Ram 2500 and 3500 models. The remainder of the shipment decline, almost 40,000 units, was driven by Europe where shipment — shipments declined primarily due to product transition gaps, in particular, from the ICE Fiat 500, which remains on hiatus until very late in this year. And to a lesser degree, products like the Citroën C3 Aircross and Opel/Vauxhall Frontera, which were reintroduced in mid-Q1, but, of course, will have a bigger impact on our volumes in Q2. On the next page, let’s turn to the revenue bridge to understand the larger 14% revenue decline in more detail. In addition to the 9% decline in vehicle shipments, total mix contributed an additional point of headwind, mostly due to the fact that the North America region with the company’s highest average selling prices had lower shipment trends than the group as a whole.

Next, pricing contributed 3 points of additional headwind, mostly again from North America, which was 6 points lower than the first quarter of 2024 before that region adjusted and recalibrated pricing late last year. Pricing was relatively flat sequentially in Q1 2025 versus where we ended Q4 2024, both at the group level and in North America specifically. And lastly, a decline in other of negative EUR 0.4 billion is primarily from the deconsolidation of Comau revenues. Now the next page, let’s review our regional segments. In North America, shipments and revenues were lower primarily due to extended January shutdown that I mentioned previously. This was due to how production ramped following very deliberate inventory reduction in the second half of 2024.

It also was negatively impacted by the switchover of the medium- and heavy-duty Ram trucks. In Enlarged Europe, I mentioned previously the sequential improvement in our market share, which I think was even more notable given the soft industry volume that we had in LCVs, where, of course, we have a very strong share. We’re particularly encouraged by the increase in BEV sales mix as we start the year on the back of a significant expansion of our electrified offerings across the B and C segments. South America delivered 6% year-over-year revenue growth on 19% higher shipments as the company maintained its #1 market position, giving it the biggest benefit from a dramatic recovery in the Argentinian market and a more moderate increase in Brazil.

Middle East and Africa continued to see negative year-over-year comparisons due to import restrictions in the region, especially in Algeria, but the company has been increasing its local production to mitigate this impact. Turning now to inventories. The business continued managing to the disciplined healthy levels achieved at the end of 2024, but there were some divergence in the development of company and independent dealer figures. Most of this was due to Europe where company inventories bounced back a bit to normal levels, I would say, after being well under typical levels at the end of 2024, while dealer inventories declined a bit sequentially. Okay. Now that we’ve covered the top line dynamics in Q1, let’s look at issues affecting Q2 and the broader 2025 period.

Let’s talk about tariffs. The key things to know about how they impact us in our North American segment. First, let’s look at the relevant considerations that frame U.S. exposure. Over the past 5 years, we’ve invested significantly to maximize compliance within the USMCA context to deliver the most competitive cost possible to our customers. Roughly 3 out of 5 cars we sell in the U.S. are also assembled in the U.S. And so on these products, tariff exposure is on the imported components, which are overwhelmingly USMCA compliant. And now indicated by the administration to be partially offset by the 3.75% MSRP credit. For the other 2 out of 5 cars that we sell in the U.S., but are assembled elsewhere, 95% of these in 2024 were USMCA compliant as well and are subject to very significant U.S. content exclusions when tariffs are calculated.

We’re also fortunate to have an exceptionally well-balanced geographic footprint. And just to be clear, I want to point out and emphasize that over the last 2 years, the company has generated more than half of our operating income outside of North America. Next, let’s talk about how we’re adapting and responding to protecting the company in the near term in the North American region. In Q1, before the tariffs were put in place, the company made public commitments to certain products and facilities in the U.S., commitments that we stand by today, making clear our support for both our U.S. workers and administration priorities to strengthen the U.S. manufacturing base. Upon the administration’s establishment of new tariffs entering early April, the company launched a new sales campaign, extending employee pricing to customers, maximizing engagement with those looking to purchase ahead of tariff impacts.

We also reduced or paused shipments of some products subject to higher tariffs, relying on healthy inventories in the short term. As we move forward, we’re monitoring market evolution and identifying where we might have some offensive opportunities. For example, where lower tariff, U.S. assembled products that we make will face competitors with higher tariff burdens. At the same time, we’re continuously engaged with U.S., Canadian and Mexican governments to make sure they have complete information on how their policies affect our complex industry and millions of our customers. As the situation evolves, we will need to calibrate our North American investments, footprint and employment to ensure the profitability of our company. Now let’s turn to our 2025 guidance, which I said at the start of the presentation was being suspended.

While we understand how important the company’s views on its financial performance are to your work modeling and value in the company, the reality is that the baseline foundation of the guidance initiated at the end of February didn’t contemplate the current tariff environment. With tariff policies evolving continually, the wide range of potential implications for the marketplaces we operate in and the company’s response and mitigation actions still underway, it is not possible at this time to ensure a forecast with adequate accuracy. The company is committed to reinstating financial guidance when we have the ability to do so in a high-quality way. So I’d like to now conclude by bringing together again a few main points. So first, the Q1 results were lower year-over-year as we’re still in the early stages of our commercial recovery plan, but we are seeing some encouraging signs that we’re moving in the right direction.

Secondly, we’re excited to have great appealing products combined with improved launch execution to begin the 2025 year. We’re expanding our market coverage, and this sets us up well to continue improving performance, particularly in Europe. Lastly, with our exceptionally balanced global footprint, the company is well positioned to weather the tariff pressures and is acting with determination to ensure profitability. And with that, I’ll now ask the operator to open up the call for Q&A.

Operator: [Operator Instructions] Our first question comes from the line of José Asumendi from JPMorgan.

José Asumendi : A couple of questions, please. It’s José from JPMorgan. Doug, you mentioned in your comments some of the optionality you have with regards to the tariffs. And you mentioned calibrating the production footprint. I’m aware still, obviously, negotiations going on, but I’d love to hear what are the options that you’re considering when it comes to the production footprint or any discussions on the supplier front to change that footprint or improve the footprint in the U.S. And the second question would be with regards to pricing. Should we think that the first quarter pricing has been, let’s say, the peak of that negativity we have seen in the revenue bridge for the first quarter and Q2 should mark an improvement? Or is Q2 maybe sort of in line with Q1?

Doug Ostermann: Yes, José, always good to hear from you. Thanks for the questions. So first, on changes that we’re considering related to the tariffs. Of course, we’re still kind of absorbing this latest change that came out just in the last kind of 1.5 days here. And the tariff policies are evolving. And frankly, it’s a good sign, right, because we have a regular dialogue with the administration, and they are modeling the tariff policies in ways — particularly the announcements that we heard yesterday in ways that are very beneficial to our transition. Now your specific question was about that transition. And really, we’ve been modeling lots of different scenarios, but — and there are a number of different actions that we can take.

One of which I talked a little bit about, which is that we’re looking at areas of opportunity where we have U.S.-built vehicles that have very low impact from the tariffs against competitor vehicles that may be imported from places like Korea or Japan, et cetera, where maybe we have an opportunity to take some share. But we’re also looking at the tariff exposures that we do have. Obviously, one of the first areas to address will be supply chain. And while I don’t want to gloss over the fact that it does take time to alter supply chains, and I think this latest announcement from the administration is great in a couple of ways. One, that it obviously provides some mitigation to the tariffs, but also that it shows their recognition of the time that it will take for us to make those adjustments.

But certainly, we’re looking at that as a near-term opportunity to work with our suppliers to try and, again, increase the U.S. content of our vehicles and reduce the tariff impact. So — but there’s a whole range of opportunities to mitigate these tariffs that we’re looking at. I won’t detail all of them today. And of course, those strategies and our implementation of those strategies will very much depend on how the tariffs evolve and the tariff policy evolves over time. Now in terms of pricing, of course, I can tell you that in general, not just in automotive, but in general, tariffs, of course, are inherently inflationary, right? We haven’t seen much in the way of major price increases yet. But price discipline, I would say, right now has been pretty robust.

in the U.S. and we’ll have to see, to your specific question on Q2 how that evolves, I think it’s very hard to predict, frankly. But right now, I think we’re seeing relative price discipline within the market. So thanks for the question, José.

Operator: [Operator Instructions] The next question comes from the line of Thomas Besson from Kepler Cheuvreux.

Thomas Besson : It’s Thomas at Kepler Cheuvreux. I’d like to start with product launches and the expected impact for your business, mostly in the U.S. and in Europe. Could you please remind us when each of these key products is expected to have a real impact on volumes? And which quarter in ’25 or ’26 do you expect Stellantis’ share to start rising again? That’s my question. And then I have a follow-up, please.

Doug Ostermann: Sure, sure. So as we talked kind of during the last call, a lot of the launches on the European side were late last year and kind of first quarter of this year. And so when we look at the rollout of the various branded vehicles on the STLA-Mid platform, when we look at the sister cars all launching off of the STLA Smart car platform, a lot of those which started on the smart car, for instance, with C3, ëC3 late last year, have now rolled out early this year when we look at like C3 Aircross, Fiat Grande Panda, et cetera, all coming in kind of late February, hitting the market in March. So the real impact of those should ramp up in Q2, more so than Q1. But as I outlined kind of in my commentary, we’ve already seen — to answer your question directly, we are already seeing market share improvement in Europe, right?

We’re up 190 basis points sequentially already. We’ve made great strides on our BEV mix. And so I think we’re seeing very positive signs. But as I mentioned, the majority of that impact or a lot of that impact will really ramp up in Q2. So I think there’s more momentum to come there. When we look at North America, of course, as I mentioned, we have taken some production out at plants, particularly in Canada and Mexico, some of which was mostly tariff related. When we look at introductions, the 2500, 3500 medium- and heavy-duty trucks are just coming into the market kind of in the last, say, 4 to 5 weeks. And so it’s still pretty early there. The other, I would say, significant launches that we think about later in the year for us, in particular, will be the Cherokee replacement, which I’d mentioned was kind of late third quarter, early fourth quarter.

And then we have, of course, the Ramcharger, Recon various versions of the Charger in terms of four-door and the ICE vehicles scattered throughout the year. So it’s more back-loaded in North America for sure. So I would expect to see those market share gains overall be later in the year, although I think in North America, it’s important to distinguish between retail share and fleet share. We, right now are very, very focused on improving our retail share in North America. Fleet right now is not particularly profitable and I would say is a much lower priority for the team in North America at this point. So we’ll see some development there. Latin America, still #1, growing the volumes. And even though from a revenue standpoint, we have some FX headwinds.

I think we still are very well positioned in Latin America. So I think those are the 3 keys that I would outline. The other market, I think that’s very important to think about is Middle East, Africa, where, as I mentioned, year-over-year comparisons are pretty tough given some of the import restrictions. We’re going to need to continue to work on our localization to bring those year-over-year comparables back into alignment and be able to service our customers. But we have a very strong story there. So hopefully, that covers it, Thomas. Thank you.

Thomas Besson : I’d like if possible to use a follow-up to come back on José’s first question about calibrating your footprint. Is there any easy wins for you with limited investments that would allow you to better use your U.S. manufacturing footprint either within the USMCA or globally that you can talk about, notably on the truck front?

Doug Ostermann: Yes. No, it’s an excellent question. It’s something that we’re working very hard on, right, is to think through how quickly can we make those changes to mitigate any tariff impacts. Of course, the 3.75 benefit on MSRP of U.S.-produced vehicles is helpful, but for a transitionary period, right? So we are working, of course, to shift some production where we’re dual sourced, right? So we have a full-size truck production in Mexico, but also in Michigan to shift some production to the extent that we can. We, of course, are looking at opportunities with suppliers to increase the content in the short term. What are those parts that we’re sourcing from areas in particular, high tariff countries outside of Canada and Mexico that are not USMCA-compliant parts — non-USMCA-compliant parts that are sourced from Canada and Mexico.

So there’s a lot of opportunities and we’re hard at work to take advantage of them. And each of them, of course, has a very different time line. And we’ll, of course, have to modulate those as the policy itself evolves. But those are some of the things that we’re thinking about. So hopefully, that’s helpful.

Operator: The next question comes from the line of Philippe Houchois from Jefferies.

Philippe Houchois : Maybe you can hear me better now. My question was on light commercial vehicles. We’ve seen quite a bit of weakness in Europe in general. It’s a big profit generator for Stellantis. Could you comment on how you’re performing in that segment? And what is driving the weakness in the market?

Doug Ostermann: Yes, Philippe, it’s a great question. You’re right. I mean the light commercial vehicle segment as a whole is not doing that well right now in Europe. We’re seeing, I think, a lot of companies that are concerned about the economy, their economic performance. There’s a lot of macro uncertainty right now. And when that happens, a lot of companies extend the life of their vehicles rather than investing and upgrading. And so that’s a challenge for us because we are the #1 player there. We’re very strong. It’s an important profitable segment for us, and we’re doing very well. But those are long-standing relationships that we’ve had with a lot of those customers. So we’re trying to help them work through those issues and trying to do things on the financial side to help support their investment. But right now, that macro uncertainty, I think, is holding back the segment as a whole. But our share there is still very strong.

Philippe Houchois : Right. And if I can use that follow-up still on that topic of LCVs is, we know the EU is easing in the compliance period for CO2. But even with that, it seems quite unworkable for the light commercial vehicle segment. Any visibility of changing the rules? Or how can basically the rules be changed that you just don’t have a timing problem on LCV compliance? Or — and would that lead you to take a provision in 2025 specifically?

Doug Ostermann: No. I mean, I think that there are — we have an ongoing dialogue in Europe around that topic because you’re right, it’s very, very challenging, given the demand for these powertrains, BEV powertrains. And you may have noticed that we’ve introduced just recently an upgraded line of BEV and hybrid powertrains on our LCVs in Europe. So we are working towards it, but it is very challenging from a regulatory standpoint and the demands that are out there. But we do have a few strategies from a product standpoint. I can’t really talk about those today. We’re not going to be making any announcements today. But we’re trying to address it from both fronts. One, in terms of making sure that the regulators understand the situation and perhaps there are some adjustments that can be made there as we’ve seen on the passenger car side, but also working on the product side. And hopefully, we can give more clarification on that front down the road here later this year.

Operator: The next question comes from the line of Horst Schneider from Bank of America.

Horst Schneider : I want to dig into some more detail on Europe. You were quite optimistic in your tone on development of the European business. So maybe you can help us a little bit on the outlook for the region. So can we still expect that H2 volume is going to be higher than H1? Can you also make some comment on the pricing? You made the statement on pricing that North America, I think, was minus 6% versus global minus 3%. What was the impact in Europe? And then in total, then the question would be still margin H2 Europe can be stronger than H1?

Doug Ostermann: Look, clearly, we knew that pricing first half in North America was going to be a tough comparison period, right? Because we took about 4% of pricing adjustments second half last year and even maintaining kind of the same pricing, right? We knew the year-over-year comparison was going to be tough in North America. Europe is a different situation. We took a lot of the price adjustment during the first half. So the year-over-year comparison is a little bit more favorable. We took about 2% last year in — we’re down about 2% — sorry, in Q1 this year in terms of pricing, but it’s certainly not as bad a comparison as what we look at in year-over-year in North America, which I kind of tried to foreshadow to you guys a few times in the previous calls.

But when we look at Europe, I think predicting forward pricing is always very challenging, so I’m a little reluctant to do so. But I don’t see significant price deterioration. And really, from my perspective, the biggest threat to serious price discipline or lack of discipline in Europe was that under the regulatory regime where everybody had to hit these kind of more stringent requirements by the end of the year, I was very concerned that many competitors with, I would say, a less prepared product portfolio seeing their BEV mix towards the end of the year might panic, look at the fines that they might be subject to and that pricing discipline would really fall apart late in the year. With this new kind of 3-year compliance scheme that’s been introduced in Europe, I think we have largely averted the possibility of that happening late in the year, which I think is very good for the industry as a whole.

That being said, we’re making nice gains, as I mentioned in my commentary, on that front with our new B and C segment vehicles, which have very, I think, competitively priced and well engineered from a range and performance perspective. And the customers are responding very positively. So we’re seeing BEV mix that’s been increasing. And I think we’ll see more of that as these vehicles really hit their stride Q2, Q3. Thanks for the question.

Operator: Our next question comes from the line of Daniel Roeska from Bernstein Research.

Daniel Roeska : It’s Daniel for Bernstein. Could I dive into kind of 2 details you alluded to. One, on the parts you’re using in your U.S. manufactured vehicles, you said the overwhelming majority of those parts were either U.S.-based or USMCA compliance. Could I push you to kind of give us a range what that non-USMCA-compliant parts content is? Is that kind of 30%, 20%, 10%, 5%, really just broad ranges? And also with the questions of some of my fellow analysts, what is your kind of view over the next 2, 3 years? How much of that can you shift into a USMCA-compliant situation?

Doug Ostermann: Yes. So when we look at our U.S. manufactured vehicles, the USMCA-compliant parts within those vehicles are roughly 80%. It varies a little bit by vehicle, of course, and by trim mix and all that kind of good stuff. But as a ballpark number, I think that’s a pretty good estimate. And of course, the 20% that is non-USMCA compliant is the piece that is subject to tariffs. Now what I think is really interesting about, of course, this announcement that we just got from President Trump is that they’ve tried to look at that and they said, “Look, if you can get to 15%, and that’s subject to, let’s say, a tariff of around 25% with, let’s say, lots of that coming from places like Mexico and Canada that are at the 25% tariff level, essentially the 3.75%, 15x the 25%, right, the 3.75% of MSRP should cover your tariff exposure for this first year.” And so I think we’re seeing the administration through this dialogue.

One, I think try to mitigate some of the impacts, right, because I think they recognize that they don’t want to hurt the profitability of the industry at a time when we are trying to make this transition. And at the same time, recognizing that these supply chains that we’ve invested in over the last 5 years will take a little bit of time to adjust. But clearly, they’re thinking things through. Now is it a perfect offset? Well, as I just mentioned, not all of our vehicles are at the 85% level. And of course, not all of that non-content is at the 25% tariff level, right? And so we need to work on it. And we’re very, very active in working on that. And some suppliers who may have excess capacity in the United States may be able to switch relatively quickly.

And other suppliers, it will be — take much longer, right? So there’s a whole range there of time lines. But I think we have some clear strategies that can improve the situation. So hopefully, that answers your question, Daniel. Thank you.

Daniel Roeska : No, very helpful. And I mean, the other part of this is the cars you import from Mexico and Canada, which are USMCA compliant. What’s the U.S. content share kind of in the cars that are USMCA compliant and being imported into the U.S.?

Doug Ostermann: Yes. I mean we — as you correctly outlined, it’s really the U.S. content that matters for those vehicles. We have publicly stated already that the range is 30% to 50%. It varies by vehicle. But again, that’s an opportunity for us where potentially we can increase that U.S. content by working with our supply base and try to mitigate some of the impact in the near term. But certainly, it’s a very different calculation, very different type of setup than the cars assembled in the U.S.

Operator: The next question comes from the line of Tom Narayan from RBC.

Gautam Narayan : Kind of a follow-up to the last one. And thanks for breaking out that 3.75% math. I think that’s something a lot of us have been kind of pouring over, a lot of confusion there. But it seems like it’s on the MSRP, not to sound cheeky here, but just curious if that actually gives some wiggle room to potentially have a higher MSRP, maybe increase the incentive and maybe have a greater offset potentially to get to the compliance in the first year of the USMCA-compliant components. Is that something you envision? And then I have a follow-up.

Doug Ostermann: Yes. I mean that’s not a strategy that we’re focused on pursuing because, of course, that would be a fairly short-term benefit. But look, I think the administration in that regard has been a bit generous by basing it on MSRP rather than cost of the vehicle. That’s helpful. It recognizes also that a lot of us are not fully at the 85%. It recognizes that some of the content parts coming from China, for example, maybe at a higher rate than the 25% that was used in their calculation. I think they’ve provided us a bit of flexibility there, which, of course, we appreciate. But fundamentally, it’s going to benefit us over time to work with our supply base. And frankly, just as we did 5 years ago when the USMCA came in, right, we optimized and adjusted and we’re going to need to do some of that now as well.

But in reality, this shift in policy is so significant for the industry that as I mentioned in my commentary, we’re going to have to take a very hard look once we get some stability and really understand all the details at exactly what moves we are going to make from a footprint standpoint, from an employment standpoint and from a capital investment standpoint. So it’s a time where that kind of scenario planning and thinking through all those strategies is very important.

Gautam Narayan : Great. And a quick follow-up. So I get the near-term gyrations headwinds across the industry. But is there an argument to be made that longer term, maybe 2, 3, 4 years from now, this whole could advantage Stellantis, right? You have the U.S. footprint after you’ve done a lot of these changes, potentially it advantages you guys over some of the foreign importers into the U.S. Is that the right way to look at it? I mean, certainly, some folks are looking at what if there’s a new administration in 4 years? I mean is that — do you look at it as actually this is great for us long term? Or is that kind of creep into your mind in terms of how you determine what to do?

Doug Ostermann: I mean it’s a great question. And really, I think time will tell. But certainly, we believe strongly that the intent of the administration is to strengthen the U.S. manufacturing base. And we are a big part of the U.S. manufacturing base, and we certainly consider ourselves the home team. And so to the extent that the Trump administration is focused on supporting U.S. manufacturing and in particular, supporting as I think about it, as the home team, which is us, long term, I’m certainly hopeful that it will turn out the way that you’ve articulated, right? That, I think, is part of the intent here. And that’s my own view, but I think it is a possibility down the road. But in the near term, of course, it’s very disruptive and has created a lot of uncertainty. And that’s what we’re kind of working through in the near term, right?

Operator: The next question comes from the line of Patrick Hummel from UBS.

Patrick Hummel : One question for me as far as the cash generation of the business or the cash burn is concerned. You already said that in the first half, one should not really expect a positive free cash flow. Now we know the North American working capital is quite sensitive to swings in production, et cetera. And given it’s already end of April, do you have any visibility what we should be prepared for, for the end of first half? Like what could a free cash flow scenario look like? Are we still talking small negative? Or could this be a sizable negative as it was in the entire year 2024, just to get a rough feeling for what to expect?

Doug Ostermann: Yes, Patrick, of course, as I mentioned, we’ve decided to remove guidance. So I don’t want to try and give you guidance in a very uncertain environment. But I will remind you that when it comes to our industrial free cash flow, a lot of it as opposed to looking at the overall production levels during the half will depend on our production levels really in the last kind of 6 to 8 weeks of the half, right? So keep in mind that we did take some production downtime in early January, which helped to improve our order bank. We have a healthy amount of orders, as I mentioned in my commentary coming in now. So if we can run our plants in a healthy way in the last kind of 6 to 8 weeks of the half, that certainly will help cash flow. But beyond that, I really am not in a position to provide you much guidance there.

Patrick Hummel : Okay. And if I can just follow up on that, Doug. As far as the investment side of things is concerned, would you see any significant variance in what you’re going to spend this year depending on what happens on the tariff front? Or would you say the quick fixes that you might be doing to boost U.S. production will not have any major impact on your CapEx spend this year?

Doug Ostermann: Yes. I think given the uncertainty, you’re not going to see a lot of CapEx decisions from us here related to tariff exposure in the first half. And I would guess you won’t see a lot of that across the industry. I think most of us are kind of in this period of waiting for a bit more clarity. Now as I mentioned during our previous call, we do expect CapEx spending to moderate a little bit this year as we get through some of these launches that we talked about, right, the smart car and STLA-Mid. Industrializations in Europe were happening kind of second half last year heavily. There’s some top acts being industrialized early this year, but we’re working our way through that heavy spending that’s associated with the new platform strategy. And so we would expect CapEx to moderate a bit in the second half.

Operator: The next question comes from the line of Mike Tyndall from HSBC.

Mike Tyndall : Yes. I just got one question around — its 2 specific cars, and maybe I’ve got my facts wrong here, but am I right in thinking that the new Jeep Cherokee and the Ram Classic replacement were both scheduled to be produced in Mexico? And I’m just wondering, does this change the plan at all? I suspect the answer is no. But what does it do to the economics of those cars because certainly, the Cherokee felt like it was going to be a very big contributor to where we were heading to.

Doug Ostermann: Yes. So let me just respond to that. You are correct on the Cherokee replacement. On the kind of what you referred to as the DS or Ram Classic replacement, that’s really a trim kind of a decontented trim that we’ve been working on of the DT light-duty pickup, which is heavily industrialized in Michigan. So that would be less impacted. But no, I mean we plan on moving forward with those products. As far as the tariff impact, I think that’s a little bit yet to be seen, right, because the policy is evolving, and we’ll have to see once things kind of settle down and get clarified a bit more. But yes, both of those are important steps in our product plan for us.

Mike Tyndall : Okay. And one very small follow-up. I suspect you’ll tell me to go away, but in the absence of tariffs, would the guidance still be the same?

Doug Ostermann: Yes, go away.

Operator: And the last question comes from the line of Martino De Ambroggi from Equita.

Martino De Ambroggi : Trying to summarize on the components. Is there any specific problematic area in the components environment and how much of your components directly or indirectly come from China or Asia? And I suppose one of the mitigants you have in mind is put more pressure on suppliers as Carlos was very vocal on this.

Doug Ostermann: Yes. I mean, a couple of things. One, as I mentioned, roughly 80% of the parts that you find in U.S.-assembled vehicles at Stellantis are USMCA compliant, right? So it’s really that other 20%. And it, of course, varies by vehicle, but for the majority of our vehicles, there’s not a ton of content coming from China into the United States. A lot of that non-USMCA-compliant content as far as parts is coming from places like Mexico, Canada, some from Europe. It really varies. And I wouldn’t — I guess I wouldn’t characterize it as putting pressure on the suppliers. I think we’re taking a bit different approach than that. I would characterize it first as understanding the full supply chain, right? Because even though we think of that 20% directly as coming to us, of course, those Tier 1 suppliers have Tier 2, Tier 3 suppliers, right, which might be in different parts of the world.

And so we need to understand the full supply chain and the tariff impacts. And then we need to, frankly, work cooperatively on what are the solutions. Many of the suppliers supply multiple OEMs within the U.S. And so it’s a multiparty conversation. Some of them will be, as I mentioned, in a situation where maybe they have some additional capacity in either low-tariff countries or the United States that they can switch to relatively easily and cost effectively and others will be much, much more challenged, right? But it’s a progressive discussion. And I would say the first step for us is working with the supplier to understand the impacts on their cost structure and then working cooperatively with them on the solutions. But I think in terms of time line, right, that’s an important thing for us to address and get after as quickly as possible because there will be — and I don’t want to sugarcoat it here.

It does take time for those changes as well. But relative to some of the other options, I think that’s a good opportunity for us as well as some of the other mitigating circumstances and strategies that I talked about, right, looking for those opportunities in the market to gain some share where we have competitors that are more challenged by the tariffs than we are looking at where we can flex production among our own plants. So there’s a lot of different strategies that we will employ. And I think we can be pretty effective at mitigating some of the impacts and making the changes that are needed. At the same time, we want to continue the dialogue with the administration about what is a reasonable time line, what are the right types of policies that they can put in place to help us with that kind of cooperative approach.

Martino De Ambroggi : Any issue on semiconductor specifically?

Doug Ostermann: No, not that I’m aware of in terms of semiconductor specifically. You probably know that in terms of the stacking of tariffs, the administration has also been taking some actions to relieve some of the double — kind of double impact that was a possibility. So you may have seen in the announcements like aluminum, steel, and I suspect perhaps semiconductors will come as well. But we don’t — I think the administration is in a position where they want to avoid kind of stacking tariffs on top of tariffs.

Operator: This was the last question. Handing back over to you, Doug, to conclude the call.

Doug Ostermann: Yes. So look, I just want to, first off, thank everybody for their interest in Stellantis and spending some time with us today. I really appreciate all the thoughtful questions. This is an evolving situation. So I’m sure this will be not the last time that we talk about some of these issues facing the industry in general and Stellantis in particular. But once again, I appreciate all the time that you’re willing to spend with us and your interest in our company. Thank you.

Operator: Thank you for joining today’s call. You may now disconnect your lines.