Stellantis Hits $26.5B Writedown in EV Setback
Stellantis revealed on Friday that it would incur charges amounting to 22.2 billion euros ($26.5 billion) as it reduces its electric-vehicle aspirations, significantly impacting its shares as conventional automakers face the consequences of miscalculating the transition to cleaner transportation. The move represents the largest in a sequence of writedowns, encompassing Ford and General Motors, as certain automakers retreat from EVs due to the Trump administration’s rollback of subsidies and demand that has fallen short of expectations. Stellantis’ Milan-listed shares plummeted by as much as 30%, reaching their lowest point since the group’s formation in 2021, following the merger of Fiat Chrysler and Peugeot maker PSA. The decline indicates that the writedown has surpassed the company’s market value. Western automakers are confronted with their most significant challenge since the car’s inception over a century ago: balancing investments between electric vehicles and petrol models while navigating the rapid ascent of Chinese competitors and increasing trade barriers. Stellantis faces significant vulnerability due to its reliance on high-margin Jeep and Ram pickup truck sales in the US, a market where the demand for EVs remains notably low.
Under the leadership of former CEO Carlos Tavares, who was ousted in late 2024 following a significant decline in US sales, Stellantis set ambitious targets for its electric vehicle strategy, aiming for fully electric cars to constitute 100% of its European sales and 50% of its US sales by the year 2030. Across the industry, fully electric vehicles represented 19.5% of European sales last year, marking an increase of nearly 30%, yet still falling short of anticipated figures. They constituted merely 7.7% of new car sales in the United States. CEO Antonio Filosa remarked that those assumptions were “over optimistic.” He stated “What we are announcing today is an important strategic reset of our business model … to put our customer preferences back at the centre of what we do, globally and in each region.” Despite Stellantis’s pivot towards introducing additional fossil-fuel models in the US, Filosa maintained that the company was still “investing in electrification”. Russ Mould remarked that the writedown indicated Stellantis “got it wrong on how quickly the world would transition from combustion engines to electric power”. However, he noted that the success of Chinese competitors “begs the question as to whether Stellantis’ frustration over its EV sales is linked to market issues or that drivers simply don’t like its vehicles.”
Fabio Caldato stated that higher-than-expected charges had become more likely following the impairments. “Further encouraging data is needed to restore full investor confidence in Stellantis,” he stated. The charges, recorded in the results for the second half of 2025, also indicate quality issues that Filosa attributed to cost reductions implemented under Tavares. He stated that they had compelled Stellantis to employ 2,000 engineers worldwide. The charges encompass adjustments to the group’s EV supply chain, updated assumptions regarding warranty provisions stemming from subpar product quality, and previously disclosed job reductions in Europe. Approximately 6.5 billion euros of the writedowns pertain to cash payments anticipated to be distributed over a four-year period starting in 2026.”Whilst an impairment was very much expected, the magnitude and larger cash-out component… is a key negative,” analysts stated in a note. Filosa started to reduce the Fiat to Jeep maker’s electric vehicle aspirations last year. In line with that transition, the Italian-French-American consortium on Thursday reached an agreement to divest its 49% interest in a battery joint venture in Canada to its South Korean partner, LG Energy Solution. Analyst Pedro Pacheco cautioned that Stellantis and others might risk retracting too much. “There is an overreaction in terms of the strategic pivoting,” he said. “They must… execute their actions correctly, as their survival could hinge on this.”
Stellantis has revised its outlook, now anticipating a preliminary net loss ranging from 19 billion to 21 billion euros for the second half of fiscal 2025, and has announced that it will not be issuing a dividend this year. It anticipates an industrial cash burn ranging from 1.4 to 1.6 billion euros in the latter half of the year. For 2026, Stellantis anticipates a mid-single-digit rise in net revenue and a low-single-digit adjusted operating income margin. It anticipates positive industrial free cash flows in 2027. The company is set to unveil its final second-half and full-year 2025 results on February 26.
