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Stellantis, the automaker behind Jeep, announced a significant shift in its electric vehicle (EV) strategy, resulting in a steep decline in its stock price. On Friday, shares fell as much as 25% in Milan trading, and similarly in the US premarket. The company revealed a €22 billion (approximately $26.5 billion) charge tied to its reduced commitments in the EV sector.
Details of the Charge
The massive charge stems from a “reset” of Stellantis’ business model. The company admitted to overestimating the pace of the energy transition, which led to a disconnect from real customer demands. CEO Antonio Filosa, who took over in June 2025, emphasized the need to adjust the company’s strategies.
Breakdown of Financial Losses
- Product Plan Changes: €14.7 billion
- Write-offs for Canceled Products: €2.9 billion
- Platform Impairment: €6.0 billion
- Cash Payments (over four years): €5.8 billion
- EV Supply Chain Resizing: €2.1 billion
- Other Operational Changes: €5.4 billion
Out of the total charge, €5.8 billion is expected to be cash payments over the next four years. These payments relate to canceled products and ongoing battery electric vehicle (BEV) models that will now have reduced production volumes.
Future Outlook and Measures
To maintain a strong financial position, Stellantis has received board approval to issue up to €5 billion in nonconvertible subordinated perpetual hybrid bonds. This initiative aims to preserve liquidity as the company strives to achieve positive free cash flow.
Despite the tumultuous transition, Stellantis managed to report a positive volume growth, delivering 1.5 million vehicles in Q4 2025, marking a 9% increase year-over-year. The company will provide further insights during a call scheduled for 8 a.m. ET, ahead of its full-year report to be released on February 26.
Dividend and Strategic Developments
In a move to conserve resources, Stellantis will not distribute an annual dividend in 2026. Additionally, the company has decided to sell its 49% stake in NextStar Energy, a battery manufacturer, to LG Energy Solution, marking another shift in its operational focus.
