Citigroup: Tariffs Result in Worst Start to the Year for European Automotive Industry

The Citibank analysts wrote that it is hard to imagine a worse start to 2026 for EU car manufacturers than now. On Monday, automotive stocks fell as US President Trump announced a 10% new import tariff on major European car-producing countries. Assuming these tariffs are implemented, car import tariffs will increase from 15% to 25%. Citibank stated that this could result in an additional cost of 500 million to 1 billion euros for German car manufacturers annually, or if the tariffs increase to 25% by June 1st, the annual cost could increase to 1.2 to 2 billion euros. Citibank added that the damage could be greater for the volatility and "investability" of the European car industry. Manufacturers may now have to be more cautious in issuing performance forecasts to avoid a repeat of profit warnings and uncertainties in 2025. In terms of profitability, the companies with the highest risk exposure are Porsche, Volkswagen, Mercedes-Benz, and BMW.