Stellantis takes $26.5 bn writedown in latest EV pullback, shares tank

Stellantis announced 22.2 billion euros ($26.5 billion) of charges on Friday as it scales back its electric-vehicle ambitions, hammering its shares as traditional automakers pay the price of misjudging the switch to cleaner driving.

 

The move is the biggest in a series of writedowns, including at Ford and General Motors, as some automakers pull back from EVs in response to the Trump administration rolling back subsidies and weaker-than-expected demand.

 

Stellantis' Milan-listed shares slumped as much as 30% to their lowest since the group's 2021 creation with the merger of Fiat Chrysler and Peugeot maker PSA. The drop means the writedown is now larger than the company's market value.

 

 

Western automakers face their biggest challenge since the invention of the car over a century ago: juggling investment between EVs and petrol models while contending with fast-rising Chinese rivals and higher trade barriers.

 

Stellantis is particularly exposed because it leans heavily on high-margin Jeep and Ram pickup truck sales in the US, where demand for EVs is especially subdued.

 

Under former CEO Carlos Tavares, forced out in late 2024 after US sales collapsed, Stellantis had aimed for fully electric cars to make up 100% of its European sales and 50% of US sales by 2030.

 

Industrywide, fully electric vehicles accounted for 19.5% of European sales last year, up nearly 30% but well short of expectations. They made up just 7.7% of US new car sales.

 

On a call with reporters, CEO Antonio Filosa, who took over last summer, said those assumptions were "over optimistic." "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," he said.

 

Although Stellantis has shifted to launching more fossil-fuel models in the US, Filosa insisted it was still "investing in electrification".

 

Russ Mould, investment director at AJ Bell, said the writedown showed Stellantis "got it wrong on how quickly the world would transition from combustion engines to electric power".

 

But he added that the success of Chinese rivals "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."

 

Stellantis to make cash payments over four years 

 

Fabio Caldato, portfolio manager at AcomeA SGR, which owns Stellantis shares, said higher-than-expected charges had become more likely after the impairments by GM and Ford.

 

"Further encouraging data is needed to restore full investor confidence in Stellantis," he told Reuters.

 

The charges, booked in second-half 2025 results, also reflect quality problems that Filosa blamed on cost cuts under Tavares. He said they had forced Stellantis to hire 2,000 engineers globally.

 

The charges also include reductions to the group's EV supply chain, revised assumptions for warranty provisions due to poor product quality, and previously announced job cuts in Europe.

 

About 6.5 billion euros of the writedowns relate to cash payments expected to be spread over four years from 2026.

 

"Whilst an impairment was very much expected, the magnitude and larger cash-out component... is a key negative," Citi analysts said in a note.

 

Scaling back EV ambitions

 

Filosa began scaling back the Fiat to Jeep maker's EV ambitions last year.

 

As part of that shift, the Italian-French-American group on Thursday agreed to sell its 49% stake in a battery joint venture in Canada to South Korean partner LG Energy Solution .

 

Gartner analyst Pedro Pacheco warned that Stellantis and others risked pulling back too far.

 

"There is an overreaction in terms of the strategic pivoting," he said. "They need to... do things right because their survival might depend on this."

 

Stellantis now expects a preliminary net loss of between 19 billion and 21 billion euros in the second half of fiscal 2025 and won't pay a dividend this year.

 

It expects industrial cash burn of between 1.4-1.6 billion euros in the second half.

 

For 2026, Stellantis forecast a mid-single-digit increase in net revenue and a low-single-digit adjusted operating income margin. It expects positive industrial free cash flows in 2027.

 

The company will release final second-half and full-year 2025 results on February 26.