Stellantis Faces $26.5 Billion Charge Due to Electric Vehicle Production Reductions
Valvoline CEO Lori Flees discusses the used car boom, decreased interest in electric vehicles and more on ‘The Claman Countdown.’
Stellantis has recently made headlines by announcing a staggering $26.5 billion charge as it scales back its electric vehicle (EV) production. This decision aligns the automaker with other manufacturers facing financial repercussions after misjudging consumer demand for EVs.
As the parent company of well-known brands such as Chrysler, Jeep, Dodge, and Ram, Stellantis’s recent charge surpasses those taken by Ford and General Motors following the cessation of federal EV subsidies.
Under the leadership of former CEO Carlos Tavares, Stellantis had ambitious goals, aiming for EVs to constitute 100% of European sales and 50% of U.S. sales by 2030. However, Tavares was ousted in 2024 after U.S. sales plummeted, largely due to the company’s heavy reliance on high-margin Jeep and Ram pickups.
GM TAKES $7B HIT AFTER SHIFTING EV STRATEGY DUE TO SLOWING DEMAND
A model year 2026 Fiat 500e all-electric vehicle. (Stellantis)
In the broader auto industry, fully electric vehicles accounted for 19.5% of European sales last year, while only 7.7% of new car sales in the U.S. were electric.
CEO Antonio Filosa, who took over at Stellantis last summer, acknowledged during a call with reporters that the company’s previous assumptions about EV demand were “over optimistic.” He emphasized the need for a strategic reset, stating, “What we are announcing today is an important strategic reset of our business model… to put our customer preferences back at the center of what we do, globally and in each region.”
FORD CUTS ELECTRIC F-150 LIGHTNING PRODUCTION, TAKES $19.5B CHARGE IN STRATEGIC SHIFT
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| STLA | STELLANTIS NV | 7.21 | -2.32 | -24.33% |
Stellantis’ charges were recorded in the company’s results for the second half of 2025 and also reflected quality issues. Filosa attributed these problems to cost-cutting measures implemented under Tavares, which necessitated the hiring of 2,000 engineers globally.
These charges also encompassed reductions in the company’s EV supply chain, adjustments to warranty provisions due to subpar product quality, and previously announced job cuts in Europe.
NEW VEHICLE SALES TO DECLINE MODERATELY IN 2026 AS AFFORDABILITY ISSUES WEIGH, FORECAST SAYS
Stellantis is a multinational automaker with brands ranging from Fiat and Maserati to Chrysler, Jeep and Dodge. (Geoff Robins/AFP via Getty Images)
Investment director Ross Mould from AJ Bell commented that the writedown indicates Stellantis “got it wrong on how quickly the world would transition from combustion engines to electric power.” He also noted that the success of Chinese EV-makers like BYD raises questions about whether Stellantis’s struggles with EV sales are due to market challenges or consumer preferences.
Stellantis shares plummeted following the announcement, with the company’s stock in New York dropping over 22% during Friday’s trading session.
The multinational automaker, which encompasses American, French, and Italian brands, saw its shares in Milan decline by more than 23%.
Looking ahead, Stellantis is projecting a mid-single-digit increase in net revenue for 2026, alongside a low-single-digit adjusted operating income margin. The company anticipates positive industrial free cash flows by 2027 and has announced that it will not pay a dividend this year.
Reuters contributed to this report.
Valvoline CEO Lori Flees discusses the used car boom, decreased interest in electric vehicles and more on ‘The Claman Countdown.’
Stellantis has recently made headlines by announcing a staggering $26.5 billion charge as it scales back its electric vehicle (EV) production. This decision aligns the automaker with other manufacturers facing financial repercussions after misjudging consumer demand for EVs.
As the parent company of well-known brands such as Chrysler, Jeep, Dodge, and Ram, Stellantis’s recent charge surpasses those taken by Ford and General Motors following the cessation of federal EV subsidies.
Under the leadership of former CEO Carlos Tavares, Stellantis had ambitious goals, aiming for EVs to constitute 100% of European sales and 50% of U.S. sales by 2030. However, Tavares was ousted in 2024 after U.S. sales plummeted, largely due to the company’s heavy reliance on high-margin Jeep and Ram pickups.
GM TAKES $7B HIT AFTER SHIFTING EV STRATEGY DUE TO SLOWING DEMAND
A model year 2026 Fiat 500e all-electric vehicle. (Stellantis)
In the broader auto industry, fully electric vehicles accounted for 19.5% of European sales last year, while only 7.7% of new car sales in the U.S. were electric.
CEO Antonio Filosa, who took over at Stellantis last summer, acknowledged during a call with reporters that the company’s previous assumptions about EV demand were “over optimistic.” He emphasized the need for a strategic reset, stating, “What we are announcing today is an important strategic reset of our business model… to put our customer preferences back at the center of what we do, globally and in each region.”
FORD CUTS ELECTRIC F-150 LIGHTNING PRODUCTION, TAKES $19.5B CHARGE IN STRATEGIC SHIFT
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| STLA | STELLANTIS NV | 7.21 | -2.32 | -24.33% |
Stellantis’ charges were recorded in the company’s results for the second half of 2025 and also reflected quality issues. Filosa attributed these problems to cost-cutting measures implemented under Tavares, which necessitated the hiring of 2,000 engineers globally.
These charges also encompassed reductions in the company’s EV supply chain, adjustments to warranty provisions due to subpar product quality, and previously announced job cuts in Europe.
NEW VEHICLE SALES TO DECLINE MODERATELY IN 2026 AS AFFORDABILITY ISSUES WEIGH, FORECAST SAYS
Stellantis is a multinational automaker with brands ranging from Fiat and Maserati to Chrysler, Jeep and Dodge. (Geoff Robins/AFP via Getty Images)
Investment director Ross Mould from AJ Bell commented that the writedown indicates Stellantis “got it wrong on how quickly the world would transition from combustion engines to electric power.” He also noted that the success of Chinese EV-makers like BYD raises questions about whether Stellantis’s struggles with EV sales are due to market challenges or consumer preferences.
Stellantis shares plummeted following the announcement, with the company’s stock in New York dropping over 22% during Friday’s trading session.
The multinational automaker, which encompasses American, French, and Italian brands, saw its shares in Milan decline by more than 23%.
Looking ahead, Stellantis is projecting a mid-single-digit increase in net revenue for 2026, alongside a low-single-digit adjusted operating income margin. The company anticipates positive industrial free cash flows by 2027 and has announced that it will not pay a dividend this year.
Reuters contributed to this report.
