Stellantis Takes €22 Billion Hit as It Retreats From EV Push

Stellantis announced Friday that it will take approximately €22.2 billion in charges during the second half of 2025 as it fundamentally reshapes its business strategy. The move marks a significant retreat from the company's previous push into electric vehicles, with about €6.5 billion expected to be paid out in cash over the next four years. The charges reflect a stark reassessment of market demand and the company's own operational missteps over recent years.

The European-American automaker, which owns brands including Jeep, Ram, Peugeot, and Fiat, said the reset was necessary to align its product plans with what customers actually want to buy rather than what the company had previously expected them to purchase. The charges include billions in writedowns for cancelled electric vehicle products and impaired manufacturing platforms that no longer make financial sense.

Background

Stellantis was formed in 2021 through the merger of Fiat Chrysler Automobiles and the PSA Group. In the years following, the company aggressively pursued electrification, betting heavily that customers would rapidly shift away from traditional combustion engines toward battery-powered vehicles. Like many automakers, Stellantis invested billions in electric vehicle development, battery manufacturing capacity, and new platforms designed specifically for EVs.

However, the transition has moved slower than anticipated. Customers in many markets, particularly in the United States, have shown far less enthusiasm for electric vehicles than the industry expected. High prices, charging infrastructure concerns, and changing consumer preferences have dampened demand. Meanwhile, Stellantis faced additional problems from what the company describes as poor operational execution and quality issues that damaged its reputation with buyers.

The company's previous leadership made strategic decisions that now appear misaligned with market reality. New management, led by CEO Antonio Filosa, has undertaken a comprehensive review of the company's direction and is making sweeping changes to correct course.

Key Details

The €22.2 billion in charges breaks down into three main categories. The largest portion, approximately €14.7 billion, relates to realigning product plans with what customers actually want and new emission regulations in the United States. This includes €2.9 billion in writeoffs for cancelled products and €6 billion in impairment charges for manufacturing platforms that can no longer be justified economically. The company is also setting aside €5.8 billion for projected cash payments over four years related to cancelled electric vehicles and other EV products whose expected sales volumes have collapsed.

Another €2.1 billion in charges stems from resizing the company's electric vehicle supply chain. This includes rationalizing battery manufacturing capacity, with about €700 million in cash payments expected over the coming years. The final €5.4 billion relates to other operational changes, including €4.1 billion to adjust warranty provisions after acknowledging higher inflation costs and quality problems from previous operational decisions.

Stellantis also announced it will not pay dividends in 2026, preserving cash as the company works through its restructuring. The company maintained approximately €46 billion in available liquidity at the end of 2025 and authorized the issuance of up to €5 billion in hybrid bonds to strengthen its balance sheet.

The CEO's Assessment

"The charges announced today largely reflect the cost of over-estimating the pace of the energy transition that distanced us from many car buyers' real-world needs, means and desires. They also reflect the impact of previous poor operational execution, the effects of which are being progressively addressed by our new team." — Antonio Filosa, CEO

Filosa indicated that the company has made most of the difficult decisions needed to correct its direction, particularly regarding product plans and portfolio alignment with market demand.

What This Means

Stellantis is not alone in facing this reckoning. Other major automakers including Ford and General Motors have also taken large charges related to electric vehicle strategies that proved overly optimistic. The industry is learning that the transition to electrification will be messier and slower than many executives predicted just a few years ago.

For Stellantis, the reset means a shift in philosophy. Rather than pushing customers toward electric vehicles, the company is now emphasizing bringing back products customers actually want, including the return of the iconic Hemi engine for some models. The company has also reorganized to give regional teams more decision-making power based on their direct knowledge of local customer preferences.

On the positive side, Stellantis reported that second-half 2025 shipments rose 11 percent year-over-year to 2.8 million vehicles. The company saw increased customer and dealer orders and improvements in initial quality metrics. In the United States, Stellantis announced a €13 billion investment plan over four years and said it is adding more than 5,000 jobs while increasing manufacturing capacity utilization.

For 2026, the company is projecting mid-single digit percentage growth in net revenues and low-single digit adjusted operating income margins. Industrial free cash flow is expected to improve year-over-year, though the company will face approximately €2 billion in payments related to the 2025 charges.

Stellantis plans to present a full new strategic plan at an investor day on May 21. The company's leadership is betting that by acknowledging past mistakes, taking massive charges now, and refocusing on customer preferences rather than industry trends, it can return to sustainable profitable growth.