Stellantis, the multinational automaker, is the latest to reveal potential changes in its production strategy aimed at reducing the impact of the Trump administration’s tariffs on vehicles and related parts. During an analyst conference call on April 30, Stellantis Chief Financial Officer Doug Ostermann disclosed that the company might relocate production of some pickup trucks from its Mexican plant to the United States. While specific models weren’t identified, Stellantis currently manufactures the Ram 1500 light-duty truck in Mexico, alongside heavy-duty Ram trucks such as the 2500 and 3500 models.
The potential production shift isn’t limited to Stellantis’ Mexican operations. Ostermann indicated that the company may need to reassess its current parts supply agreements with plants in Canada, Mexico, the U.S., and other countries to increase the U.S. content in its vehicles. “As the [tariffs] situation evolves, we’ll need to calibrate our North American investments, footprint, and employment to ensure the profitability of our company,” Ostermann stated.
This development comes a day after the Trump administration announced modifications to the tariffs program. The changes could provide automakers with credits worth up to 15% of the value of vehicles manufactured in the U.S., based on the proportion of their parts that fall under the previous USMCA free-trade agreement between Canada, Mexico, and the U.S. These rebates, valid for two years, could then be used to offset tariffs on imported vehicles and parts. Ostermann noted that Stellantis’ U.S.-made vehicles could become tariff-free in the first year if the company manages to boost USMCA content from the current 80% to 85%.
The tariff landscape is expected to change once again. On April 30, The Globe and Mail reported that Ford CEO Jim Farley expressed optimism about the tariff changes but emphasized that additional support was still required. The uncertainty surrounding tariffs has already led Stellantis to pause production at some of its Mexican plants and a Canadian plant producing Chrysler minivans and the Dodge Charger. The company has also halted work at another Canadian facility that was being prepared for the production of the next-generation Jeep Compass.
Other automakers are also considering production shifts in response to the tariffs. Nissan is expected to move some production of its top-selling Rogue compact crossover from Japan to the U.S. and may begin manufacturing a new electric SUV at a U.S. plant. In contrast, Porsche has stated that its only solution to dealing with tariffs is to raise prices further, refusing to compromise on German construction despite having several VW-owned production facilities in America.
As the automotive industry continues to navigate the complexities of tariffs and trade agreements, companies like Stellantis are adapting their strategies to mitigate potential impacts on their operations and profitability.
