New Jeep Cherokee set to lead Stellantis’ U.S. sales turnaround

LOS ANGELES – Stellantis is counting on the return of the Jeep Cherokee to help lead a U.S. turnaround for the SUV brand and embattled automaker.

The Cherokee returns after a three-year hiatus, rejoining the compact and midsize vehicle markets, which represent the largest segments in the U.S. It also marks Jeep’s first traditional hybrid model and its most fuel-efficient, gas-powered vehicle ever in the U.S.

“This is a critical vehicle for us,” Richard Cox, Jeep senior vice president of brand operations, told CNBC during a media event for the 2026 Cherokee. “I think this expands our reach with this level of powertrain, with this level of fuel efficiency and capability.”

The vehicle is currently arriving in U.S. dealerships as arguably the most important U.S. launch for the automaker this year. Stellantis is attempting to regain market share after significant losses in recent years.

The automaker has set a target to increase retail sales by roughly 25% in 2026 to 1.15 million vehicles, driven by updated and new models as well as pricing and product realignments to move vehicles off dealer lots.

“It’s a huge part of our growth,” Cox said regarding the new Cherokee. “It positions us well in ’26.”

Last year, Jeep narrowly reported its first annual sales increase – up less than 1% – since 2018, when the brand achieved sales of more than 973,200 units. That compares with sales of 593,401 Jeeps in 2025, a 39% decline over the seven-year period.

The 1% annual sales growth for Jeep wasn’t enough to lift Stellantis’ overall U.S. sales into the black for the year, though. The parent company reported a 3% decline in U.S. sales in 2025 – marking its seventh consecutive fall amid a failed push into all-electric vehicles and significant cost cutting and price increases under former CEO Carlos Tavares.

Sean Hogan, a Los Angeles-area dealer who’s leading Stellantis’ franchised national dealer council, believes the 25% target increase in U.S. sales is achievable with the company’s new leadership and product slate.

“We’ve been missing Cherokee. It’s huge to us. It’s huge to Jeep, and I think they nailed it,” said Hogan, vice president of Sierra Auto Group. “It’s key for us to getting the machine turned back on to start the volume that’s going to be flowing again and generate the capacity in our dealerships. It’s bringing in new customers.”

Jeep believes it has a winner with the Cherokee, even more so than the last generation of the vehicle that peaked at nearly 240,000 units sold in 2018.

The company declined to discuss production expectations, but it likely won’t be able to achieve similar sales numbers until the company adds U.S. output capabilities. Plans to expand production at an Illinois plant are expected as early as next year.

The Cherokee is currently only being produced at a plant in Toluca, Mexico, that also manufactures a smaller Jeep Compass SUV and Jeep Wagoneer S EV, and is slated to produce the upcoming Jeep Recon EV as soon as the second quarter.

Stellantis’ Toluca plant is estimated to have the capacity to produce 303,000 vehicles annually, according to AutoForecast Solutions.

The auto intelligence and forecasting firm expects Jeep’s U.S. sales this year to increase roughly 10% to 650,000 units, led by the Cherokee, according to Sam Fiorani, AFS vice president of global forecasting.

Jeep CEO Bob Broderdorf told CNBC in December that Cherokee is the priority for the brand amid slowing EV sales.

“Once Cherokee is done and has a good run rate, then we can start on Recon,” he said. “Recon, I’m not in a hurry. I want to get the quality right of Cherokee, and then as soon as we’re confident, OK, turn on the Recon.”

Broderdorf has been leading a turnaround strategy for Jeep since being named CEO in February. Those efforts have included significantly reducing prices and model complexity and shifting away from the brand’s all-electric plans as part of a broader pullback by Stellantis that will cost the company $26 billion.

The 2026 Cherokee is a traditional hybrid – a technology pioneered by the Toyota Prius – that does not require a plug, but does use a small battery and electric motors to assist fuel economy.

Jeep has historically been known for its large, boxy gas-guzzling SUVs, but the Cherokee is expected to achieve 37 combined miles per gallon, including 35 mpg on the highway and 39 mpg in the city.

“Those are very competitive numbers,” said Mike Cockell, director of Jeep Cherokee nameplate. “It’s a vehicle that must do it all for the customer, and we feel we’re able to do it all. It’s like a Swiss army knife.”

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

“Electrification trends are pretty flat. Hybrid trends are absolutely growing,” Cox said. “So, I think it 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 features standard four-wheel drive, relatively large interior screens, and 140 standard and available safety and security features.

Starting pricing for the Cherokee ranges from roughly $37,000 to $46,000, according to Stellantis. The bestselling model is expected to be the $39,995 Cherokee Laredo, which Stellantis says is projected to represent 36% of the vehicle’s sales.

The pricing positions the midsize vehicle to be competitive in its own segment as well as against compact SUVs such as the Toyota RAV4 and Honda CR-V.

Jeep officials say those two brands served as benchmarks for the updated Cherokee.

‘We have a number of customers that have either defected or they’ve moved into something else because we didn’t have a product offering for them. So, this is our chance to get them back into the family, and I think do some conquesting as well,” Cox said.