New Jeep Cherokee expected to drive Stellantis’ U.S. sales recovery

Los Angeles – Stellantis hopes the return of the Jeep Cherokee will help guide the SUV brand and the struggling automaker’s turnaround in the United States.

The Cherokee returns after a three-year hiatus and re-enters the small and midsize car market, representing the largest segment in the U.S. It is also Jeep’s first traditional hybrid model and the most fuel-efficient gasoline-powered vehicle in U.S. history.

“This is a very important vehicle for us,” Richard Cox, Jeep’s senior vice president of brand operations, told CNBC at a media event for the 2026 Cherokee. “I think this opens up the range for this level of powertrain, this level of fuel efficiency and capability.”

The vehicle is now arriving at U.S. dealerships in perhaps the automaker’s most significant U.S. launch of the year. Stellantis is aiming to regain market share after suffering significant losses in recent years.

The company has set a goal of increasing retail sales by about 25% to 1.15 million units in 2026, driven by updated and new models, as well as pricing and product realignment to move vehicles out of dealerships.

“This is a big part of our growth,” Cox said of the new Cherokee. “We’re in a good position in ’26.”

Last year, Jeep barely reported its first annual sales increase (an increase of less than 1%) since 2018, when the brand sold more than 973,200 units. By comparison, Jeep sales in 2025 were 593,401 units, a 39% decline over seven years.

But Jeep’s 1% annual sales increase wasn’t enough to bring Stellantis’ overall U.S. sales into the black that year. The parent company reported a 3% decline in U.S. sales in 2025, the seventh straight year of declines due to a failed push toward all-electric vehicles under former CEO Carlos Tavares, and massive cost cuts and price hikes.

Sean Hogan, a Los Angeles-area dealer who heads the Stellantis Franchise National Dealer Council, believes that with the company’s new leadership and product lineup, the goal of increasing U.S. sales by 25% is achievable.

“The loss of Cherokee is huge for us. It’s huge for Jeep as well. I think they did a great job with it,” said Sierra Auto Group Vice President Hogan. “The important thing for us is to turn on the machines and increase the volume again and increase the production capacity of our dealerships, which is bringing in new customers.”

Jeep believes the Cherokee has a winner over the previous generation Cherokee, which sold about 240,000 units in 2018.

The company declined to discuss its production outlook, but it likely won’t be able to achieve similar sales numbers until it adds production capacity in the United States. Plans to expand production at the Illinois factory are expected as early as next year.

The Cherokee is currently only produced at the plant in Toluca, Mexico, which also produces the small Jeep Compass SUV and Jeep Wagoneer S EV, and is expected to produce the next Jeep Recon EV as early as the second quarter.

According to AutoForecast Solutions, Stellantis’ Toluca plant is estimated to have the capacity to produce 303,000 vehicles per year.

The auto information and forecasting company expects U.S. sales of Jeep to increase about 10% to 650,000 units this year, led by the Cherokee, said Sam Fiorani, AFS vice president of global forecasting.

Jeep CEO Bob Broderdorf told CNBC in December that the Cherokee was a priority for the brand as EV sales slumped.

“Once Cherokee is completed and we have good availability, we can start on Recon,” he said. “Scouts, I’m in no hurry. I want to get the quality of the Cherokee right. And as soon as I’m confident, OK, I’ll activate the scouts.”

Broderdorf has been leading Jeep’s turnaround strategy since being named CEO in February. These efforts include significantly reducing prices and model complexity, and moving away from the brand’s all-electric vehicle plans as part of a broader exit by Stellantis that will cost $26 billion.

The 2026 Cherokee is a traditional hybrid, a technology pioneered by the Toyota Prius, which doesn’t require a plug but uses a small battery and electric motor to improve fuel economy.

While Jeeps have historically been known as large, boxy SUVs that guzzle gas, the Cherokee is expected to achieve 37 miles per gallon combined, including 35 mpg on the highway and 39 mpg in the city.

“These are very competitive numbers,” said Mike Cockel, Jeep Cherokee nameplate director. “This is a vehicle that has to do everything for the customer, and we feel like we can do it all. It’s like a Swiss Army knife.”

The update is an attempt to make the vehicle more competitive against brands such as Toyota, as well as capitalize on the expected growth in hybrid vehicles.

“The electrification trend is pretty much flat, and the hybrid trend is definitely growing,” Cox said. “So I think this was a big move in the right direction.”

The Cherokee features a 1.6-liter turbocharged four-cylinder hybrid powertrain rated at 210 horsepower and 230 foot-pounds of torque. It has standard four-wheel drive, a relatively large interior screen, and 140 standard and available safety and security features.

Starting prices for the Cherokee range from approximately $37,000 to $46,000, according to Stellantis. The best-selling model is expected to be the $39,995 Cherokee Laredo, which Stellantis says is expected to account for 36% of sales.

This pricing makes the mid-size car unique not only in its segment. toyota RAV4 and honda CR-V.

Jeep officials say those two brands set the benchmark for the new Cherokee.

“We have a lot of customers who have defected or moved on to other products because we didn’t have a product for them. So I think this is an opportunity to bring them back into the family and conquer them as well,” Cox said.