Stellantis Shifts Gears: The Future of the U.S.–Canada Auto Industry

On October 14, 2025, Stellantis, the Dutch-headquartered automaker whose brands include Jeep, Dodge, Chrysler, and Ram, announced that it would invest $13 billion into the United States, focusing on four states with existing facilities: Illinois, Ohio, Michigan, and Indiana. (Stellantis). Stellantis plans to expand the facilities’ capabilities to produce new products for the company by growing U.S. production by 50%, launching five new vehicles along with 19 product actions, and adding more than 5,000 jobs across the four states. Id. Stellantis calls the investment the largest in its 100-year history. Id. This post will examine the logistics of the plan, its controversy within Canada, and its signaling of wider macroeconomic shifts.

On March 26, 2025, President Trump imposed a 25% tariff on all automobiles qualifying for preferential tariff treatment under the United States-Mexico-Canada Agreement. (The White House). The tariff includes heavy-duty trucks such as Ram 2500 and 3500 models. (Stellantis; Joseph Pisani, WSJ). In October 2025, Stellantis’s CEO, Antonio Filosa, stated that Stellantis’s American investment plan was the result of discussions with the Trump administration after the U.S. imposed tariffs on Canada. (Vjosa Isai, NYT). Since President Trump’s tariff announcement, Canada’s efforts to reach a trade plan with the U.S. and mitigate tariffs have been fruitless. Id.  Stellantis, crunching its numbers, figured that its tariff impact would be $1.5 billion in one year if it continued operations in Canada and did not respond to the U.S tariff policy. (Ryan Felton, WSJ). Stellantis could either continue operating in Canada and brace for this financial impact or move across the border. Id. Stellantis chose the latter. (Stellantis).

However, in preparation for its new investment in the U.S., Stellantis abandoned plans to reopen a factory closed since 2023 in Brampton, Ontario. (Vjosa Isai, NYT). Stellantis originally closed the Brampton plant to prepare for a new production line and maintained that the Brampton plant closure would be temporary. (CBC). Canadian Prime Minister Mark Carney stated that Stellantis would have “exposure . . . if they were not to follow through with those commitments for Brampton.” (Ian Bickis, The Canadian Press). Lana Payne, the National President of Unifor, a Canadian trade union, held a solidarity rally attended by hundreds of Stellantis employees and admonished Stellantis’s plan, stating “[i]f you’re going to sell in this country, you’re going to build in this country.” (CTV). Canada’s Minister for Industry, Mélanie Joly, shared her memorandum to Antonio Filosa on X to signal her support for Canada’s auto workers. (Mélanie Joly, X). In the memorandum, Joly took two approaches to rebuke Stellantis’s plan: first, she reminded Filosa that Canada helped Stellantis in 2009 from falling into bankruptcy; second, she warned Filosa that if Stellantis does not fulfill its obligations to the Canadian people, legal action may be exercised. Id.

As to the first approach, Joly’s bankruptcy comment refers to In re Chrysler LLC, where the New York Southern Bankruptcy Court approved a restructuring of Chrysler with four key equity holders: the United Auto Workers voluntary employees’ beneficiary association (VEBA) with 55% equity, Fiat with 20%, the United States with 8%, and Canada with 2%. (In re Chrysler LLC). This ruling permitted Fiat to acquire “up to an additional 31% . . . under certain circumstances.” Id. This allowed Fiat to later acquire most of Chrysler’s assets. (Michael J. de la Merced, NYT) A few years later, Fiat merged with Chrysler to form FCA. (Fiat). In 2021, Stellantis acquired FCA. (Stellantis).

The second approach reminded Filosa of Stellantis’s legally binding agreements with the Strategic Innovation Fund (“the Fund”), where the company agreed to receive investments from the Fund if it operated within Canada. (Mélanie Joly, X). Created in 2017, the Fund is an investment fund of the Canadian Government charged with fostering innovation and R&D. (Home, ISED). If a business applies for and successfully obtains money from the Fund, the business must sign a Contribution Agreement. Id. The Contribution Agreement outlines, among other considerations, “funding terms and conditions, consequences of the agreement terms not being met, and obligations of both the recipient and the Government of Canada.” (Terms and Agreements, ISED). Indeed, on May 2, 2022, the Canadian government announced that the Fund would invest $529 million into Stellantis to support plants in Windsor and Brampton, Ontario. (P.M. Canada). The Province of Ontario also supported Stellantis by investing $513 million. Id. By accepting money from the Fund, Stellantis is bound by this Contribution Agreement, and Joly’s warning suggests that Canada and Ontario could sue. (Mélanie Joly, X).

Stellantis is not the only automaker shifting away from vehicle production in Canada, signaling a wider trend within the auto industry. (Vjosa Isai, NYT). In May, Honda moved their CR-V production from Ontario to the U.S. Id. In October, General Motors stopped production of Brightdrop vans, a type of electric delivery driver vehicle, in Ingersoll, Ontario. (Unifor). This move is a sign of a larger movement within the American automobile market. (Ryan Felton and Sharon Terlep, WSJ). During President Biden’s presidency, the Ford Motor Company, General Motors, and Stellantis paid nearly $10 billion on regulatory credits and fuel-economy rule-violation fines. Id. President Trump pushed to deregulate the internal combustion engine to make it easier for automakers to manufacture the engines. (Scott Patterson, WSJ). This deregulation means that American automakers can double down on the internal combustion engine and lower the priority of electric vehicles, culminating in an attractive scene in the U.S. where automakers can make engines while limiting the tariff costs. (Ryan Felton and Sharon Terlep, WSJ).

However, such an agreement grows less likely. (Zi-Ann Lum, Politico). During the World Series matchup between the Toronto Blue Jays and the L.A. Dodgers, the Government of Ontario aired an advertisement using the voice and words of Former President Ronald Reagan from a radio broadcast to argue against tariffs. (Toronto Sun, YouTube). In retaliation, President Trump terminated trade talks with Canada and raised tariffs by 10%. (Zi-Ann Lum, Politico; Alexander Bolton, The Hill). President Trump also accused Canada of attempting to influence the United States Supreme Court, which heard oral arguments regarding U.S. tariffs on November 5. (Donald J. Trump, TruthSocial). The Ontario Government later pulled the advertisement, but the damage was already done. (Zi-Ann Lum, Politico).

Stellantis’s plan is the culmination of changing trade policies, tariffs, government regulation, and deregulation in the auto industry. While Stellantis created this plan to skirt American tariffs, the company could face legal consequences if it fails to honor the Agreement with Canada. (Mélanie Joly, X). Stellantis’s actions illustrate a broader trend of shifting market dynamics within the auto industry. Under President Trump’s policies, the auto industry seems to be shifting toward domestic production and away from cross-border cooperation.