Auto Tariffs Are Coming Down: 3 Stocks to Benefit Soon

Key Points

• Trade tariffs affecting automobiles have been lowered between the United States and the European Union, creating an opportunity gap.
• Three stocks could benefit from this lowering and even from the fact that tariffs are new this year.
• Institutions are buying ahead of any Wall Street reaction to the news, clearing up the signal.

As tariff negotiations continue, most investors will likely refresh their Twitter feeds daily to see what President Trump is shifting to next. While this is great for traders who make up most of the stock market's caffeine intake, some simply don’t have the time (or stomach) to handle this market roller coaster.

Thinking two or three steps ahead is a safer way to navigate this storm. 

Turnover in the market and retail participation are both at all-time highs for this cycle (meaning there is zero patience currently). This also means that those willing to wait and land on a fundamental path will likely be rewarded for their originality while escaping the thick of the weeds.

Three stocks in the automotive sector have the right components for this to be the case in the coming months, especially as President Trump just lowered auto tariffs between the United States and the European Union, these are Stellantis NYSE: STLA, Ford Motor Co. NYSE: F, and even Advance Auto Parts Inc. NYSE: AAP, and investors are about to find out why they could rock portfolios in the coming months.

Big Buyers Pressure Stellantis Analysts

The prevailing view on these auto stocks is that tariffs would ruin their business and squeeze their margins, so much so that Wall Street analysts have become complacent with this consensus view. Which is why Stellantis stock carries a consensus view of Hold, though more recent ratings look a lot more bearish.

Michael Jacks from Bank of America says Stellantis is a Neutral valued at $11.7, which is still higher than today’s price. But that’s not what actually matters. What matters is that his previous target was set for $16.5, a considerably lower gap in this July 2025 opinion.

However, other players have taken an opposing view, such as institutional buyers from Amundi. These allocators boosted their Stellantis holdings by 41% as of mid-August 2025, bringing their entire position to a high of $1.1 billion today or 3.6% ownership of the entire company.

That new institutional buying may be a sign that these individuals have noticed the potential benefits of lowering these tariffs. This directly boosts the company's future earnings per share (EPS) potential and, therefore, its valuation.

Ford’s Assembly Pivot Is Key

Don't worry, you're not the only one dealing with the uncertainty this trade war has brought to the economy. Ford’s management decided enough was enough and took it upon themselves to make the right pivots to avoid any future mishaps. 

The first step? Modernize the assembly process like Henry Ford did.

Going back to its roots, Ford is now looking to lower the price of their vehicles by directly lowering the cost of making them, and keeping the process within the United States (therefore qualifying for new tax credits and no tariffs).

Ford's proposition is valuable in a future where tariffs are higher than they were a couple of years ago.

Valuable, though not easy, which is why analysts are refusing to look that far into the future. Today’s consensus view is of a Reduce calling for 10.6% downside in a $10.5 per share valuation.

This is where true profits are made, as investors are willing to bet against the crowd and take on the pain, as long as they trust their initial thesis.

Investors could look to Marshall Wace LLP as a role model, which just started a $212.3 million position in Ford stock as of mid-August 2025, making them the largest institutional holder as of the latest quarter. This early positioning, aligned with the announcement of an upgraded assembly, is undeniable evidence that the dots are being connected moving forward.

If All Else Fails, Choose Advance Auto Parts

Advance Auto Parts' stock has rallied by 24.7% over the past quarter, following a dismal performance earlier, and this should be enough evidence for investors to understand what the market is thinking right now. If the assumptions and views are set for tariffs ruining the automotive space, then it’s clear that the view favors Advance Auto Parts.

With this in mind, investors should recognize why that is. If new cars, which aren’t assembled in the United States and therefore subject to tariffs, will cost more, then it would make sense for consumers to keep their current vehicles or even start opting for used ones.

This should fundamentally drive demand for the parts offered by Advance Auto Parts. Besides the price action, investors can also note a very real shift in the sentiment. State Street, an institutional player, built up a $111.9 million stake to own 4% of the company as of mid-August 2025.

While State Street was buying, 12.3% of the company’s short interest vanished as well, a clear sign for investors to take home regarding where the sentiment balance is shifting right now for Advance Auto Parts stock.