Stellantis N.V. Q1 FY2025 Earnings Call

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.

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. 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.

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 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 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 evolve. 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 largely by product with 10 all-new products planned in 2025 as well as full-year benefits from those 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 #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 downtimes. 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 shipments declined primarily due to product transition gaps, in particular, from the ICE Fiat 500, which remains on hiatus until very late 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. 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. The 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 divergences 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 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 valuing 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 and 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. 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 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.

Our first question comes from José Asumendi from JPMorgan.

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 are ongoing, 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. 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?

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. 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. We've been modeling lots of different scenarios, 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 we might have an opportunity to take some market 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. 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 provides some mitigation to the tariffs, but also shows their recognition of the time 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. 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 over time. Now in terms of pricing, as I can tell you, in general, not just in automotive, but in general, tariffs, of course, are inherently inflationary. 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.

The next question comes from the line of Thomas Besson from Kepler Cheuvreux.

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.

Sure, sure. As we talked 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. When we look at the rollout of the various branded vehicles on the STLA-Mid platform, when we look at the sister cars rolling out on the STLA Smart car platform, a lot of those which started on the smart car, for instance, with the C3, ëC3 late last year, have now rolled out early this year with vehicles like the C3 Aircross, Fiat Grande Panda, etc., 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. To answer your question directly, we've already seen market share improvement in Europe, right? We're up 190 basis points sequentially already. We've made great strides on our BEV mix. 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. For North America, 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 and 3500 medium- and heavy-duty trucks are just coming into the market in the last, say, 4 to 5 weeks. So it's still pretty early there. The other significant launches that we think about later in the year for us will be the Cherokee replacement, which I'd mentioned was kind of late third quarter or early fourth quarter. We have 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. 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. Right now, we are very focused on improving our retail share in North America. Fleet is not particularly profitable and is a much lower priority for the team in North America at this point. We'll see some developments there. Latin America is still #1, growing the volumes. Even though from a revenue standpoint we have some FX headwinds, I think we are still very well positioned in Latin America. The other market that is very important to consider is Middle East and Africa, where, as I mentioned, year-over-year comparisons are tough given some of the import restrictions. We need to continue working on our localization to bring those year-over-year comparables back into alignment and to effectively service our customers. But we have a very strong story there. So hopefully, that covers it, Thomas. Thank you.

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?

Yes. No, it's an excellent question. It's something that we're working very hard on. We're thinking about how quickly we can make those changes to mitigate any tariff impacts. The 3.75 benefit on MSRP of U.S.-produced vehicles is helpful, but it's for a transitionary period. We're working to shift some production where we're dual sourced. We have full-size truck production in Mexico, but also in Michigan to shift some production to the extent that we can. We are looking at opportunities with suppliers to increase the content in the short term, specifically targeting parts sourced from areas that are not USMCA-compliant that are coming from high-tariff countries outside of Canada and Mexico. So there are many opportunities, and we're hard at work to take advantage of them. Each has a different time line, and we will have to modulate as the policy itself evolves. But those are some of the considerations we're focused on. Hopefully, that's helpful.

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

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?

Yes, Philippe, it's a great question. You're right. 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. When that happens, many companies extend the life of their vehicles rather than investing and upgrading. That's a challenge for us because we are the #1 player in that segment. We're very strong, and 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 many of those customers. We're trying to help them work through those issues and doing things on the financial side to support their investment. But right now, that macro uncertainty is holding back the segment as a whole. However, our share there is still very strong.

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 the rules be changed so that you don't have a timing problem on LCV compliance? Will that lead you to take a provision in 2025 specifically?

No. I mean, I think there are ongoing dialogues in Europe around that topic because you're right, it's very challenging given the demand for these BEV powertrains. We've introduced 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. We do have a few strategies regarding product. I can't really disclose those today, but we are trying to address it from both fronts: understanding the situation with regulators and perhaps exploring some adjustments on the passenger car side, while also enhancing our product offerings. Hopefully, we can provide more clarification on that front later this year.

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

I want to dig into some more detail on Europe. You were quite optimistic in your tone on development of the European business. 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 was down 6% versus global minus 3%. What was the impact in Europe? And then in total, can you still expect margins in H2 Europe to be stronger than in H1?

Look, clearly, we knew that pricing in the first half in North America was going to be a tough comparison period. We took about 4% of pricing adjustments in the second half last year while maintaining kind of the same pricing. We knew the year-over-year comparisons were going to be tough in North America. Europe is a different situation. We took a lot of the price adjustments during the first half. The year-over-year comparison is a little more favorable. We took about 2% last year in Q1 this year, but it's certainly not as bad a comparison as what we look at in year-over-year in North America. I hesitated to predict forward pricing because it's always very challenging, but I don't see significant price deterioration. From my perspective, I think the biggest threat to serious price discipline or the lack thereof in Europe was that under the regulatory regime, competitors with a less prepared product portfolio may have panicked, looking at penalties they might face and that pricing discipline could have collapsed late in the year. With the new 3-year compliance scheme that's been introduced in Europe, we’ve largely averted that possibility, which I think is good for the industry as a whole. We're making nice gains with our new B and C segment vehicles that are well-engineered and competitively priced. Customers are responding positively, and I think we’ll see more momentum as these vehicles really hit their stride in Q2 and Q3. Thanks for the question.

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

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 compliant. Could I push you to kind of give us a range of 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 view over the next 2, 3 years? How much of that can you shift into a USMCA-compliant situation?

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 and trim mix, but as a ballpark number, I think that's a good estimate. The 20% that is non-USMCA compliant is what is subject to tariffs. What is interesting about this announcement from President Trump is that they've tried to mitigate some impacts, recognizing that supply chains will take time to adjust. They want to avoid harming profitability in the industry at a time when we are transitioning our operations. While not all of our vehicles are at the 85% compliance level, we are very active in working to improve the situation. Some suppliers with excess capacity in the U.S. can switch relatively quickly; others will take longer. There are various timelines involved, but we have strategies to enhance compliance. Hopefully, that answers your question, Daniel. Thank you.

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 in the cars that are USMCA compliant and being imported into the U.S.?

We have publicly stated that the range is 30% to 50% in terms of U.S. content that matters for those vehicles. This is another opportunity where we could increase that U.S. content by working with our supply base to mitigate some of the impact in the near term. It's a very different calculation and setup compared to the cars assembled in the U.S.

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

Kind of a follow-up to the last one. And thanks for breaking out that 3.75% math. I think that's something many of us have been pouring over, with a lot of confusion there. 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 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.

That's not a strategy we're focused on pursuing because that would be a fairly short-term benefit. I think the administration has been generous by basing it on MSRP rather than the cost of the vehicle. This recognizes that we're not fully at the 85%, and some of the content parts coming from China might be at a higher rate than the 25% used in their calculation. They've provided us with some flexibility, which we appreciate. However, it's important for us to work with our supply base as we did 5 years ago when the USMCA came in, optimizing and adjusting as needed. As I mentioned, we'll need to make hard assessments once we gain stability and understand everything involved, detailing exactly what moves to make regarding our footprint, employment, and capital investment.

Great. And a quick follow-up. 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 could advantage Stellantis? You have the U.S. footprint after you've done a lot of these changes; potentially it could give you an advantage over some of the foreign importers into the U.S. Is that the right way to look at it? Certainly, some folks are considering what if there's a new administration in 4 years? Do you see this as potentially positive for you long term?

It's a great question, and time will tell. We believe the administration's intent is to strengthen the U.S. manufacturing base, and we consider ourselves the home team. To the extent that the administration supports U.S. manufacturing, we hope that could have long-term benefits for us. However, in the near term, this is disruptive and creates much uncertainty, which we're navigating.

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

One question for me regarding the cash generation of the business or the cash burn. You already said that in the first half, one shouldn't really expect positive free cash flow. Given the North American working capital is sensitive to swings in production, do you have any visibility on what we should expect for the end of the first half? 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?

Yes, Patrick. As I mentioned, we decided to remove guidance, so I don’t want to provide any guidance in this uncertain environment. Industrial free cash flow will depend significantly on production levels during the last 6 to 8 weeks of the half. While we took production downtime in early January to improve our order bank, we have a healthy amount of orders coming in now. If we can run our plants effectively in the last few weeks, that should help cash flow, but beyond that, I cannot provide further guidance.

If I could follow up on the investment side of things, do you see any significant variance in what you're going to spend this year depending on what happens on the tariff front? Or would the quick fixes you might be doing to boost U.S. production not significantly impact your CapEx spending this year?

Given the uncertainty, you won't see a lot of CapEx decisions related to tariff exposure in the first half. I suspect that applies across the industry. Most of us are waiting for more clarity. We do expect CapEx spending to moderate a bit this year as we finalize some of the launches we've discussed. Industrializations in Europe were heavy in the second half last year, and while some activities are occurring this year, we are navigating through that heavy spending associated with the new platforms.

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

I just got one question around two specific cars. Am I right in thinking that the new Jeep Cherokee and the Ram Classic replacement were both scheduled to be produced in Mexico? 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 the Cherokee felt like it was going to be a very big contributor to our strategy?

Yes, you are correct on the Cherokee replacement. The Ram Classic replacement is a decontented trim of the DT light-duty pickup, which is heavily industrialized in Michigan, so that would be less impacted. We plan to move forward with those products. The tariff impact is yet to be seen as the policy is still evolving, and we'll clarify more as things settle down.

In the absence of tariffs, would the guidance still be the same?

Yes, go away.

The last question comes from the line of Martino De Ambroggi from Equita.

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? One of your mitigants might be to put more pressure on suppliers as Carlos was very vocal on this.

Yes. As I mentioned, roughly 80% of the parts in U.S.-assembled vehicles are USMCA compliant. The content coming from China into the U.S. is not very significant; a lot of that non-USMCA-compliant content is from Mexico, Canada, and Europe. I would characterize our approach not as putting pressure on suppliers, but understanding the full supply chain and collaborating on solutions. Many suppliers support multiple OEMs in the U.S., making it a multiparty conversation. Some suppliers may switch relatively easily, while others face challenges. It's important to address timelines for adjustments, so we’re actively working with suppliers. We also want to continue our dialogue with the administration regarding reasonable timelines and policies that support our collaborative approach.

Any issues regarding semiconductors specifically?

No, not that I'm aware of regarding semiconductors specifically. The administration is also taking actions to relieve some double impacts that could exist. You may have seen announcements regarding aluminum, steel, and I suspect semiconductors will come as well. We want to avoid stacking tariffs on top of tariffs.

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

I want to thank everyone for their interest in Stellantis and spending time with us today. I appreciate all the thoughtful questions. This is an evolving situation, so I'm sure this won't be the last time we discuss the issues facing the industry in general and Stellantis in particular. Thank you for your interest in our company.

Thank you for joining today's call. You may now disconnect your lines.