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Stellantis shares suffered their worst single-day decline on record, plummeting 24% in Milan after the automaker announced €22 billion ($26 billion) in charges linked to reversing its electric vehicle strategy. The massive writedown wiped approximately €5.4 billion from the company’s market capitalization and far exceeded analyst expectations.
CEO Blames Predecessor for Strategic Missteps
Chief Executive Officer Antonio Filosa, who took the helm in June, attributed the charges to “over-estimating the pace of the energy transition,” directing responsibility toward his predecessor Carlos Tavares. The writedowns include nearly €6.5 billion in cash payments primarily to compensate suppliers as the manufacturer of Jeep SUVs and Fiat cars phases out several models and projects due to rising costs and shrinking market shares in Europe and the United States.
Filosa described the reset as demonstrating “the impact of previous poor operational execution, the effects of which are being progressively addressed by our new team.” Under Tavares’ leadership, the company had committed to selling only electric vehicles in Europe and reaching 50% EVs in the US by 2030, but revised these ambitious targets after his departure in late 2024.
Financial Impact and Strategic Restructuring
The charges will affect the second half of the 2025 financial year, with Stellantis expecting a net loss of up to €21 billion during this period. The company anticipates a low single-digit operating margin this year, including roughly €1.6 billion in tariff-related costs. To strengthen its financial position, Stellantis plans to raise up to €5 billion through bond issuance and will not pay a dividend this year.
The automaker is also exiting its joint venture with South Korean battery manufacturer LG Energy Solution in Canada. In 2022, Stellantis had committed to investing more than $3.7 billion with LG Energy to create the first large-scale EV battery plant in Windsor, Ontario, but LG is now purchasing Stellantis’ stake in the venture.
Industry-Wide EV Struggles
Stellantis joins other major automakers grappling with slower-than-expected electric vehicle adoption. Ford announced $19.5 billion in charges related to restructuring its EV operations in December, while General Motors’ writedowns reached $7.6 billion. Porsche revised its outlook downward four times last year while adjusting its EV strategy.
What’s Next
The company will release detailed full-year earnings on February 26. Filosa continues working to revamp the manufacturer to reclaim market share while scaling back EV ambitions and addressing increasing tariff costs, as the industry navigates buyer resistance to price hikes and quality concerns.
Sources: Koreatimes, Mint
