The Biden Administration’s push to limit Chinese-made EV imports has disqualified some vehicles from automakers Stellantis (STLA) and Volkswagen (VWAGY) from receiving U.S. tax credits. Starting in 2025, EVs must have at least 60% of their battery components sourced from the U.S. or allied nations to qualify for a $3,750 or $7,500 credit. Unsurprisingly, cars with battery parts linked to China, Russia, North Korea, or Iran are ineligible. Stellantis shares also felt added pressure after Bloomberg reported a 37% drop in the company’s 2024 vehicle production in Italy, which totaled just 475,090 units.
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This decline was attributed to weak demand for EVs, along with cheap Chinese imports and operational cutbacks. Stellantis is facing pushback from unions and the Italian government as it cuts jobs and pauses operations at two plants in southern Italy to address overcapacity. The production slump highlights the company’s broader struggle to remain competitive as market dynamics continue to shift.
Stellantis Should Spin Off Its American Brands
And these struggles have led to recent criticism from U.S. senator-elect Bernie Moreno, who believes that Stellantis should spin off its American brands—Ram, Jeep, Dodge, and Chrysler—and return them to domestic ownership. In an interview with Bloomberg, Moreno, a former Ohio auto dealer, argued that the 2021 Fiat Chrysler-Stellantis merger shortchanged iconic U.S. brands and called the conglomerate a “terrible steward” of these nameplates.
Moreno’s stance aligns with President-elect Donald Trump’s automotive policies, which include rolling back EV tax credits and fuel economy regulations. He also criticized former Stellantis CEO Carlos Tavares for cutting U.S. jobs, claiming, “This guy fired all the Americans.”
Interestingly, Moreno’s push isn’t isolated, as Walter P. Chrysler’s great-grandson, Frank B. Rhodes Jr., circulated a petition earlier this year calling for Stellantis to sell its American brands. The U.S. Stellantis National Dealer Council has also expressed frustration over the perceived sidelining of these brands under European leadership.
Is STLA a Good Stock to Buy Now?
Turning to Wall Street, STLA stock has a Moderate Buy consensus rating based on seven Buys, 10 Holds, and two Sells assigned in the last three months. At $14.88 per share, the average Stellantis price target implies an upside potential of 18.8%. It is also worth noting that shares of the company have declined 40% over the past year.
