Stellantis races with EU automotive sector after US backtrack on fuel standards

(Il Sole 24 Ore Radiocor) - Cars accelerated sharply on European stock exchanges after US President Donald Trump announced a halt to the 'green' energy standards introduced by his predecessor Joe Biden. Above all, the German big names in the sector shone, boosted also by the positive assessments of Bank of America analysts. In Frankfurt, the share of Porsche Automobil Holding Pref is leading the DAX 30 index. They are closely followed by Mercedes-Benz Group , Volkswagen and Bmw. Also advancing are Daimler Truck Hd and Traton. In Paris Renault topped the index CAC 40 and in Stockholm Volvo Car shines. In Milan rises Stellantis.

On Wednesday, in the presence of top executives of major US manufacturers, Trump announced a coupling of the stringent standards on fuel consumption and vehicle emissions introduced by his predecessor for environmental purposes. "Let's put an end to Biden's ridiculous standards, which had raised prices. "We're ending Biden's ridiculous standards, which had raised prices and created problems for automakers," the tycoon said, adding, "we're reviving the auto business. I think it's going to be bigger than ever. The new US legislation, decided in the name of re-industrialising the country and giving consumers freedom of choice, envisages average consumption of 34.5 miles per gallon by 2031, compared to the 50.4 miles prescribed by the previous administration and 39.1 miles previously. Also present at the White House were Ford CEO Jim Farley, GM number one Mary Barra, and Stellantis CEO Antonio Filosa, who welcomed Trump's move, commenting that a 'realignment with the market in the real world' is taking place.

Also triggering the purchases were positive comments from analysts at Bank of America, who are generally more confident about the European automotive sector outlook for 2026. According to BofA's experts, less regulatory pressure offers more flexibility. In the US, requirements to reduce pollutant emissions could even be eliminated altogether, they note. Europe would not go that far, but it is likely that vehicles with internal combustion engines will not be banned before 2040. The car holding company Porsche SE is recommended in particular because - analysts explain - the stock allows investors to benefit from Volkswagen and sports car manufacturer Porsche AG at a favourable price. For Mercedes, the worst seems to be over, at least for now, which is why BofA is withdrawing its 'Underperform' recommendation on the stock, which remains for Bmw, because it believes it is too early tobet on a turnaround.

At the same time, Citi analysts recommend caution on Stellantis, i.e., they have issued a 'Neutral' with a price target of EUR 9, while taking into account that the European auto sector could rebound after "a 600 basis point drop in market share in the US; a drop in earnings of about 90%; and a 70% drop in shares". The US bank's experts, however, also point out the risks Stellantis will have to contend with. Will the carmaker, they question, really be able to recover profits? They also point to the performance of US auto credit, which is deteriorating, and finally ask whether in the event of an actual recovery in the US auto sector Stellantis really has the strength of its brands and the technology to increase its registrations. Citi's conclusion is 'we continue to prefer Volkswagen and Porsche (+5.5%)'.

Also pushing Porsche AG are rumours that the company intends to strengthen its austerity policy and demand significant concessions from its employees. The Stuttgart-based carmaker is aiming for further cost savings as part of discussions with the trade unions on a new 'future package' that would mainly affect the main plant in Zuffenhausen and the development centre in Weissach, according to the 'Stuttgarter Nachrichten' and the 'Stuttgarter Zeitung'. Specifically, the plan provides for 'staff reductions in the administrative area' or 'outsourcing of certain services', as well as 'reducing the number of apprentices and offering guaranteed jobs under certain conditions'. In addition, 'adjustments' are planned with regard to working hours, as well as an 'increase in flexibility', according to a list consulted by the newspapers. The proposed savings measures also concern bonuses and seniority incentives.