On Wednesday morning, the automotive sector index was performing fairly well. Stellantis gained 2%, while Mercedes and Volkswagen each rose 1%. What do they have in common? The publication of sluggish quarterly results and the withdrawal of their annual forecasts. Manufacturers are mired in a tariff storm from Washington. But all it took was a decree from Donald Trump, softening – slightly – the shock of his own taxes, to put a smile back on investors' faces.
Forecasts thrown out of the window
European car manufacturers have no visibility for the rest of the year. Stellantis and Mercedes have simply withdrawn their 2025 forecasts. Volkswagen, for its part, has guided towards a margin just at the lower end of the previously announced range. The day before, Volvo Car threw in the towel for the next two years.
The backdrop is the same anxiety: the impact of tariffs on imported parts imposed by the Trump administration. These measures are disrupting global production chains and driving up manufacturing costs in an already tense environment marked by the transition to electric vehicles and competition from China.
The White House hears the cry for help
Faced with discontent in the sector, Donald Trump has pulled a partial concession out of his hat. On Tuesday, he signed an executive order allowing car manufacturers producing in the United States to benefit from tax credits on certain imported parts. This is a way of temporarily calming the situation and avoiding social unrest in the Midwest, the historic stronghold of the auto industry.
"The president's leadership allows for more investment in the US economy," said Mary Barra, CEO of GM. Jim Farley of Ford echoed her sentiments. It's likely that the statements had been prepared well in advance of the president's visit to Michigan, the birthplace of Detroit and an ideal political showcase.
But behind the smiles, the concern remains palpable. GM has suspended its own forecasts despite solid results. A conference with analysts has even been postponed until the situation becomes clearer. It seems that even the American giants no longer know how to interpret the signals coming from Washington.
The stockmarket follows the emotion
What is striking about this picture is the growing disconnect between economic performance and market reaction. Industry is faltering, margins are shrinking, visibility is disappearing... but stock prices are rising. Because in a post-truth society, a statement or a decree can turn everything upside down. Because investors are now betting on politicians' intentions rather than on quarterly figures.
We could laugh about it if it weren't so revealing of the prevailing feverishness. The automotive sector, a pillar of European industry, finds itself dancing to the unpredictable tune of the US president. Manufacturers are suspending their forecasts, but the markets are already anticipating the next U-turn.
This feverishness is reflected in the very disparate performances of carmakers on the stock market since the beginning of the year. These performances depend on an explosive mix of commercial momentum, supply chain structure, assembly site location, ability to bow to pressure from Washington, and a whole range of other variables. Stellantis (-33%) comes in last, while Volkswagen is curiously in pole position (+11%). Another example is that the market values Ford (+2.5%) more than General Motors (-12%). There is also a wide gap between Renault (+1.5%) and Tesla (-28%). In such a context, it is hardly surprising that the automotive sector's valuation multiple is among the lowest on the stock market: the median P/E ratio for the sector in 2026 is 5.35x, excluding Tesla (106x) and Ferrari (40x). Investors have no reason to pay more for such a lack of visibility.
