The global car industry is in the middle of a serious shake-up. Legacy automotive companies are scrambling to stay profitable in the electric vehicle (EV) race, newcomers are shaking up the status quo, and some marques are fighting to remain relevant, let alone ahead of the game. From surprise exits, shocking US tariffs, bold comebacks, to billion-dollar pivots and identity crises, the road ahead is anything but smooth. LUXUO lists down what is causing the auto world’s latest reset.
The Loom Of US Tariffs
As of April 2025, the United States imposed a 25 percent tariff on all imported vehicles and certain automotive parts, aiming to bolster domestic manufacturing. This move has significantly impacted foreign automakers, with German brands such as BMW and Mercedes-Benz facing cost increases of up to USD 11,894 per vehicle. Japanese manufacturers, including Toyota and Honda, anticipate incurring billions of dollars in losses, with Toyota estimating USD 1.2 billion in costs for April and May alone. The tariffs have led to a 2.5 percent rise in US car prices in April, surpassing the typical monthly increase. Consumers are feeling the pinch, especially for models priced under USD 30,000, which are particularly vulnerable to these tariffs.
In response, automakers like Mercedes and Volvo plan to shift more production to US factories to mitigate costs. However, the full implications of the tariffs are still unfolding, with widespread price increases and adjustments to the supply chain underway.
Stellantis Group’s Financial Nosedive
In 2024, Stellantis, the massive automaker that owns Jeep, Peugeot and Fiat, had several difficulties. Due in significant part to a 12 percent decline in vehicle shipments and operational challenges during its transition to electric vehicles, the company’s net profit fell by 70 percent to EUR 5.5 billion. In comparison, revenues decreased by 17 percent to EUR 156.9 billion. Stellantis’ market share in North America decreased from 9.6 percent to 8 percent compared to the previous year, while sales in the United States declined by 16 percent. The business also had to contend with a 15 percent decline in worldwide EV sales, which totalled 314,500 units, due to fierce competition from Chinese producers and declining European demand. These problems were exacerbated by Stellantis’ cost-cutting tactics, which included layoffs that affected nearly 900 American workers, including 370 in Indiana.
The company’s instability was exacerbated by Carlos Tavares’ surprise resignation as CEO in December 2024. Notwithstanding these obstacles, Stellantis is making investments in its electric vehicle (EV) future, including upgrading its Michigan plants to produce new electric cars for USD 400 million. To enhance its electric vehicle (EV) options in Europe and globally, the company has recently formed a joint venture with Leapmotor, a Chinese company. Stellantis’ future success in the changing automotive industry will be largely dependent on its capacity to innovate and adapt as it navigates these challenging times.
Maserati’s Sales Slump
Under Stellantis, Maserati, the venerable Italian luxury automaker, experienced a challenging 2024, with worldwide sales declining 57 percent to 11,300 vehicles, down from 26,600 in 2023. A EUR 82 million operating loss accompanied this steep decline, compared to a EUR 121 million profit the previous year. Important markets suffered severe declines: sales in the United States fell 37 percent to 4,819 automobiles, while sales in Italy fell 42 percent to 2,242 units. This pattern was reflected in production, which fell 64 percent in Maserati’s Italian plants, including a 79 percent decline at the Modena site, which manufactures the MC20 supercar. According to Carlos Tavares, CEO of Stellantis, “We haven’t done enough to establish Maserati as a pure luxury brand.” He blamed these difficulties on poor brand positioning and marketing. Maserati responded by hiring Giovanni Perosino as chief marketing officer in January to revive the brand’s reputation. Despite these obstacles, Stellantis remains committed to Maserati and plans to introduce additional electric models in the coming years, including the MC20 Folgore. Maserati’s future in the evolving automotive industry will be primarily determined by the company’s ability to overcome these challenges.
Nissan’s Financial Woes
With a net loss of JPY 676 billion (about USD 4.55 billion) for the fiscal year ending March 2025, a significant departure from last year’s JPY 101.3 billion profit, Nissan is experiencing one of its most difficult periods in recent memory. Slumping worldwide sales, particularly a 14.3 percent decline in China, and a shrinking US market share — now at 5.8 percent, down from 7.7 percent five years ago — are the primary causes of the setback. In early 2024, nearly 40 percent of Nissan dealerships in the US reported losses, with profits declining by 70 percent.
The breakdown of a planned USD 60 billion merger with Honda exacerbated the situation. To increase EV competitiveness, negotiations started in late 2024. However, Nissan turned down Honda’s offer to become a subsidiary, citing autonomy and allegiance to its partnership with Renault. Nissan is cutting 20,000 jobs, shutting down seven facilities and accelerating the development of new models, such as the plug-in hybrid Rogue SUV, to mitigate financial losses. However, Nissan faces a challenging and uncertain future due to its limited electric vehicle (EV) products and mounting competition.
Porsche EV Faces Plummeting Sales in China
Porsche’s plans to produce electric vehicles (EVs) have encountered a significant obstacle in China. With deliveries dropping to 56,887 units from 79,283 the previous year, the automaker’s national sales declined by 28 percent in 2024. The decline was even more severe in the first quarter of 2025, when sales of 9,471 vehicles decreased by 42 percent year-over-year.
Due to growing competition from domestic companies like Xiaomi, whose SU7 Ultra offers comparable performance at a lower price point, sales of Porsche’s flagship electric vehicle, the Taycan, declined by 47 percent. Porsche cars have also come under scrutiny for lacking the cutting-edge technological features that Chinese buyers now demand. Porsche plans to respond by reducing its network of dealerships in China by over 30 percent, from 138 to approximately 100 locations by the end of 2026. Additionally, the business is investing in enhancing its online sales channels and introducing services tailored to tech-savvy consumers. These issues underscore the challenges faced by established luxury automakers in adapting to China’s competitive electric vehicle market and rapidly evolving consumer preferences.
Tesla’s Troubles
China’s BYD is a fierce competitor to Tesla’s hegemony in the electric vehicle (EV) market. 1.79 million battery electric vehicles (BEVS) were delivered by Tesla in 2024, a slight decrease from the previous year. In the meantime, BYD sold over 4.25 million new energy vehicles, a 41 percent increase from the prior year, comprising 1.76 million battery electric vehicles (BEVS) and 2.48 million plug-in hybrids. BYD gained a 34.1 percent share in China, the world’s largest electric vehicle (EV) market, while Tesla held only 6 percent. The success of BYD is attributed to its diverse range of vehicles, which includes both luxury and affordable options, as well as its substantial presence in both local and international markets. In contrast, Tesla experienced a 13 percent decrease in worldwide deliveries during the first quarter of 2025, accompanied by a decline in sales in key markets, including Europe and China.
The brand’s aspirational sheen has dulled, due in part to Elon Musk’s increasingly divisive public persona — from erratic behaviour on social media to political rhetoric that alienates key demographics. Musk’s actions, once seen as visionary, now risk undermining consumer trust and brand equity. Add to this Tesla’s limited model refreshes, safety concerns around its Autopilot system, and a failure to meaningfully localise for Asian markets, and the cracks in its once-unassailable lead become glaring. To maintain its position in the EV market, Tesla must adapt to shifting market conditions as BYD continues to invest in new technologies and expand its international presence.
Mercedes-Benz EV Division Faces Major Challenges
Global battery-electric car sales fell 23 percent to 185,100 units in 2024, posing serious challenges for Mercedes-Benz’s electric vehicle (EV) division. This decline was particularly noticeable in Europe, where sales decreased by 3 percent, and in China, where they dropped by 7 percent. Mercedes-Benz is under pressure to fulfill strict EU CO₂ emission limits because of the decline in EV sales; if sales don’t improve, there could be expensive penalties. Mercedes-Benz has updated its strategy to address these issues, aiming to launch 17 battery-electric cars and 19 new gasoline and diesel models by the end of 2027. This change reflects a less aggressive push toward complete electrification and a more balanced approach between electric vehicles and conventional combustion engines. These challenges were also evident in the company’s financial performance, as net earnings dropped 28.4 percent to EUR 10.409 billion. As the automotive industry evolves, Mercedes-Benz has announced plans to reduce costs further and reassess its mid-term profitability targets.
Volkswagen Fights Hard In The Chinese Market
As it works to preserve its financial stability in the face of intense competition and changing consumer tastes, Volkswagen is facing increasing difficulties in China, its biggest market. Deliveries of the company’s cars in China decreased by 9.5 percent in 2024, contributing to a 2.3 percent decline in the global total to 9.03 million units. The net profit decreased by 30.6 percent to EUR 12.4 billion from EUR 17.8 billion the previous year, with this decline playing a significant role. In 2024, Volkswagen’s ID series sold over 130,000 units in China, representing a 23.8 percent year-over-year increase that solidified its status as the nation’s best-selling joint venture electric vehicle (EV), despite these setbacks. Targeting key growth categories, Volkswagen plans to introduce 30 new models in China by the end of 2027, including 20 New Energy Vehicles (NEVS), as part of its strategic steps to combat declining sales. Along with ongoing restructuring efforts to strengthen its competitive advantage, the automaker is also investing in in-house assisted driving technology designed for Chinese consumers.
Jaguar’s (Continuous) Identity Crisis
Jaguar’s identity is in flux due to its branding dilemma. As part of its Panthera initiative, the British luxury carmaker announced a drastic rebranding in late 2024, intending to reposition itself as a wholly electric premium brand by 2026. Inspired by the original goal of founder Sir William Lyons, this change featured a new logo, a minimalist design language, and the daring motto “Copy Nothing.” However, there has been a significant adverse reaction to the makeover. Critics contend that by eschewing Jaguar’s performance and elegance background, the new identity alienates the company’s long-standing clientele. Particularly controversial have been the promotional materials’ lack of cars and emphasis on abstract imagery. Concerns have even been voiced by internal designers within the organisation; a leaked letter shows uncertainty on the proposed course. Jaguar remains committed to its electrification strategy despite these obstacles, and it plans to launch the Type 00, its first all-electric car, in 2025. Whether the rebrand will successfully reinterpret Jaguar’s identity for a new generation of consumers will depend on how well this model does.
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