The Auto World Has Undergone a Big Reset
The global auto industry is undergoing a major shake-up. Newcomers are challenging the status quo, while legacy automotive companies struggle to remain profitable. Some marques are even fighting to stay relevant and ahead of the competition. The road ahead is not smooth. From shock exits to US tariffs to bold comebacks, billion-dollar pivots to identity crises. LUXUO lists down what is causing the auto world’s latest reset.
The Loom Of US Tariffs
Trump’s tariffs are upending the global auto industry doing business in the US. Image: Newsweek.
As early as April 2025, United States will impose a 25% tariff on all imported cars and parts. This is to boost domestic manufacturing. The move has had a significant impact on foreign automakers. German brands like Mercedes-Benz and BMW have seen their costs increase by up to USD 11,894 for each vehicle. Toyota, Honda and other Japanese automakers expect to lose billions of dollars. Toyota estimates USD 1.2 billion for the months of April and May. Tariffs led to an increase of 2.5 percent in US car prices for April, exceeding the usual monthly rise. Automakers such as Mercedes and Volvo are shifting production to US plants to reduce 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
Brands under the Stellantis Group are under financial duress. Image: Stellantis Media
In 2024, Stellantis, the giant automaker that includes Jeep, Peugeot, and Fiat, faced several challenges. The company’s net income fell 70 percent due to operational challenges and a decline of 12 percent in vehicle shipments during the transition to electric vehicles. Comparatively, revenues fell by 17 percent and reached EUR 156.9 Billion. Stellantis’ market share in North America dropped from 9.6 to 8 percent, compared to last year. Sales in the United States also decreased by 16 percent. Due to the fierce competition of Chinese producers and declining European demands, Stellantis’ cost-cutting tactics led to a 15 per cent decline in global EV sales. This totaled 314,500 units. Stellantis’ cost cutting tactics, including layoffs of nearly 900 American employees — including 370 workers in Indiana — exacerbated these problems. Stellantis continues to invest in its electric future despite these obstacles. It has upgraded its Michigan plants for USD $400 million, allowing them to produce new cars. The company recently formed a joint-venture with Leapmotor, a Chinese firm, to enhance its EV offerings in Europe and worldwide. 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
Maserati MC20. Image: Ceobizworld.com
Under Stellantis, Maserati, the Italian luxury automaker, experienced a difficult 2024. Worldwide sales fell 57 percent, to 11,300 cars, from 26,600 vehicles in 2023. This steep decline was accompanied by an operating loss of EUR 82 millions, down from a profit of EUR 121 millions the previous year. Sales in the United States dropped 37 percent, to 4,819 cars. In Italy, sales fell 42 percent, to 2,242 vehicles. The production at Maserati’s Italian factories fell by 64 percent, including a 79-percent decline at the Modena plant, where the MC20 is manufactured. According to Carlos Tavares (ex-CEO Stellantis), “we haven’t done a lot to establish Maserati a pure luxury brand.” he blamed this difficulty on poor branding and marketing. Maserati hired Giovanni Perosino in January as its chief marketing officer to help revive the reputation of the brand. Stellantis is committed to Maserati despite these obstacles and plans to launch additional electric models, including the MC20 Folgore, in the next few years. 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
The Nissan and Honda merger was a failure from the start. Image: AP Reuters.
Nissan has been experiencing some of its toughest times in recent history. With a net loss JPY 676 Billion (USD 4.55 Billion) for the fiscal period ending March 2025 – a huge departure from the JPY 101,3 billion profit last year – Nissan has experienced one of its worst periods ever. The main reasons for the decline are a drop in worldwide sales, notably a 14.3 per cent decline in China and a shrinking US share, now at 5.8 %, down from 7.7 pct five years ago. Nissan dealerships reported losses in early 2024. Profits dropped by 70%. Negotiations began in late 2024 to increase EV’s competitiveness. Nissan, however, declined Honda’s proposal to become a subordinate, citing its autonomy and loyalty to its partnership Renault. Nissan has cut 20,000 jobs and shut down seven factories to reduce financial losses. It is also accelerating the development new models, such as the plug in hybrid Rogue SUV. However, Nissan faces a challenging and uncertain future due to its limited EV products and mounting competition.
Porsche EV Faces Plummeting Sales in China
Porsche Taycan are not moving the needle in sales in China. Image: Reuters.
Porsche has faced a major obstacle in China when it comes to its plans to manufacture EVs. The automaker’s sales in China dropped by 28 percent when deliveries fell to 56,887 from 79,283 units the year before. 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 are also being criticized for not having the latest technological features that Chinese consumers now expect. Porsche will reduce its dealership network in China from 138 locations to 100 by the end 2026. The business also invests in improving its online channels and offering services to tech-savvy customers. 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
BYD car sales have overtaken Tesla globally. Image: Ecostisias.
BYD, a Chinese company, is a serious competitor of Tesla in the EV sector. Tesla delivered 1.79 million battery-electric vehicles (BEVS), a slight drop from the year before. BYD, on the other hand, sold more than 4,25 million new energy cars, an increase of 41 percent from the previous year. This included 1,76 million battery electric vehicles (BEVS) and 2,48 million plug in hybrids. BYD has a 34,1 percent market share in China, which is the largest EV marketplace in the world, while Tesla only holds 6 percent. BYD’s success is attributed to the diverse lineup of its vehicles, which include both luxury and affordable models. It also has a substantial presence on both domestic and international markets. Tesla, on the other hand, saw a drop of 13 percent in its worldwide deliveries in the first quarter 2025. This was accompanied by a decrease in sales in major markets, including Europe and China. Musk’s actions, once viewed as visionary, now threaten to undermine consumer trust and brand equity. Tesla’s once unassailable market lead is now vulnerable to cracks. Add to that its limited model updates, safety concerns about its Autopilot system and a failure of meaningful localisation for Asian markets, and it becomes apparent. 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
Mercedes-Benz EV division is having a hard time selling their cars globally. Image: Reuters.
Sales of battery-electric cars fell by 23 percent in 2024 to 185.100 units, which is a serious challenge for Mercedes-Benz EV. The decline in sales was most noticeable in Europe, where it fell by 3 percent. In China, they decreased by 7 percent. Mercedes-Benz faces pressure from the EU to meet strict CO2 emission standards due to the decline in EVs sales. If sales don’t improve, Mercedes-Benz could face expensive penalties. Mercedes-Benz updated its strategy in order to address these concerns. It aims to launch 17 battery-electric vehicles and 19 new gasoline or diesel models by 2027. This shift reflects a less aggressive approach to complete electrification, and a more balance between electric vehicles and combustion engines. The company’s financial results also showed these challenges, with net earnings dropping 28.4 percent from EUR 10,409 billion 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
The new VW ID.1 is hoping to push the sales of its EV on the global stage. Image: Yahoo Autos.
Volkswagen faces increasing challenges in China, its largest market. As it strives to maintain its financial stability despite intense competition and changing consumer preferences, Volkswagen is struggling in China. The company’s deliveries in China declined by 9.5 per cent in 2024. This contributed to a global decline of 2.3 per cent to 9.03 millions units. This decline played a major role in the decrease of 30.6 percent, from EUR 17,8 billion to EUR 12,4 billion. Volkswagen ID sold more than 130,000 units in China in 2024. This represents a 23.8% increase year-over-year, which solidified the ID’s status as China’s top-selling joint-venture EV despite this setback. Volkswagen will introduce 30 new models to China by 2027. This includes 20 New Energy Vehicles. Volkswagen’s strategic plan to combat falling sales is to target key growth categories. 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
The Jaguar Type 00 model was part of the rebrand in late 2024. Jaguar’s (Continuous) Identity Crisis
The Jaguar Type 00 model was part of the rebrand in late 2024.
Jaguar is undergoing a rebranding crisis, which has affected its identity. The Panthera initiative of the British luxury automaker included a radical rebranding that was announced in late 2024. Its goal is to become a fully electric premium brand by 2020. This change was inspired by the founder’s original goal, which included a new design language, a bold motto, and a new logo. However, the reaction to this makeover has been negative. The new Jaguar identity, they claim, alienates long-standing customers by abandoning the brand’s heritage of performance and elegance. The promotional materials have caused controversy, especially because they don’t feature cars. Instead, they use abstract images. Even internal designers have expressed concerns. A leaked letter shows that there is uncertainty about the proposed direction. Jaguar is committed to its electrification plan despite the obstacles, and plans to launch its Type 00 – its first all electric car – in 2025. This model will determine whether the rebranding will be successful in reinterpreting Jaguar’s image for a younger generation.
