KEY POINTS
- Iveco’s annual operating profit plunged 28% to 654 million euros in 2025.
- The Italian truck maker faced lower demand and high costs for electric transition.
- The financial results arrive just weeks before the expected closing of the Tata acquisition.
Iveco Group reported a significant drop in its annual earnings on Thursday as the company nears a historic ownership change. The Italian vehicle manufacturer saw its adjusted operating profit fall by nearly a third over the past year. This decline highlights the cooling demand in the European heavy truck market and the massive financial burden of shifting toward zero-emission technology.
The 2025 financial figures come at a critical moment for the firm. India’s Tata Motors is currently in the final stages of acquiring Iveco in a multi-billion euro deal. Despite the drop in profit, Iveco’s net revenue remained relatively stable, dipping only 3% to 15.6 billion euros. Investors are now focused on how Tata will integrate the struggling European icon into its global commercial vehicle portfolio.
Management attributed the profit squeeze to several macroeconomic headwinds. Rising interest rates have discouraged logistics companies from renewing their fleets, leading to a 10% drop in order intake. Additionally, Iveco invested heavily in its e-mobility platform to meet strict European carbon mandates. These research and development costs have cut deep into margins at a time when sales volume is flagging.
The transition to new ownership is expected to conclude by the end of the first quarter. Analysts suggest that Tata Motors plans to use Iveco’s engineering expertise to expand its presence in high-end European markets. Meanwhile, Iveco will benefit from Tata’s massive supply chain and lower production costs. The partnership aims to create a more competitive global player capable of challenging industry giants like Volvo and Daimler.
Looking ahead, the outlook for the European trucking sector remains cautious. The industry is navigating a difficult “bridge” period where traditional diesel engine sales are slowing, but electric models remain too expensive for many buyers. Iveco’s leadership noted that the company is currently streamlining operations to prepare for the merger. They expect the combined entity to achieve significant synergies in hydrogen and battery-electric research.
The market reacted with volatility to the earnings release, as the profit miss was larger than most brokerage firms predicted. However, the pending takeover provides a safety net for the stock price. Most stakeholders view the Tata deal as the necessary lifeline for Iveco to survive the expensive technological shift currently disrupting the automotive world.
