Automotive News: Michelin Shares Plunge 11% on Gloomy 2025 Outlook, USA Tariffs

Ouch—that’s the sound of Michelin’s stock slamming into reverse. Shares of the French tire giant cratered as much as 11% in Paris on Tuesday, the sharpest intraday drop since the early COVID chaos, after the company gutted its 2025 forecasts and flagged a steeper-than-expected sales nosedive in North America.

–by Mark Cipolloni–

The grim revision? Michelin now sees operating income landing between €2.6 billion and €3 billion—well shy of the prior €3.4 billion target. Blame it on sputtering demand in agriculture, construction, and trucking, sectors that have been wheezing under broader economic headwinds. Over in North America, third-quarter sales skidded nearly 10%, squeezed further by a limp dollar and tariff squeezes that eroded margins.

It’s a perfect storm: Tariffs are hammering tire-market competitiveness just as European automakers grapple with a sales slump back home, fueled by cutthroat Chinese rivals. Stateside, the drama’s ramping up with the fallout from subprime auto lender Tricolor Holdings’ recent collapse, signaling early tremors in the U.S. lending landscape. Echoing the pain, UBS sounded the alarm weeks back that consumer fragility is creeping from low-income households into the middle class.

Citi analyst Ross MacDonald didn’t mince words, dubbing the update “worse than feared.” He cautioned that tariff turbulence, bargain-basement trade-downs, and limp end-market demand could drag well into Q1 2026, keeping the pressure on.

Michelin also dialed back its free cash flow guidance before M&A to €1.5 billion–€1.8 billion, from €1.7 billion, pinning the shortfall on that pesky currency slide.

Full third-quarter numbers drop next Wednesday, but today’s preview was poison for the stock—marking the worst single-day tumble in over five years. Rival Continental AG caught the skid too, dipping in Frankfurt.

Year to date, Michelin’s shares are down 17.55%, and Wall Street’s top minds aren’t spotting a quick rebound yet. They’ve already trimmed price targets amid the North American nightmare, leaving investors gripping the wheel through choppy times ahead.