Paris (France) (AFP) – Jeep maker Stellantis warned Friday that it would take a 22 billion euro hit after a slower takeup of electric vehicles than it expected, the latest sign that legacy automakers are struggling to navigate the shift away from combustion engines. The admission of a “significant overestimation” of demand for EVs comes as authorities in the US and Europe have eased strict emissions targets after years of demanding cleaner vehicles.
US auto giants Ford and General Motors also recently announced multibillion-dollar write-downs as they pull back on EV operations, sparked in large part by President Donald Trump’s scrapping of hefty US subsidies for electric cars. But the colossal $26 billion write-down at Stellantis also comes after months of management turmoil that saw the ousting of former chief Carlos Tavares in late 2024 over his contested premium pricing policy. He was replaced in July by Antonio Filosa, an Italian and Fiat veteran who immediately embarked on a management shake-up and a vow to restore profitability after a 70 percent plunge in 2024 net profit to 5.5 billion euros.
But Filosa has not stopped the erosion of Stellantis’s stock price, which plunged nearly 23 percent Friday to 6.32 euros — and has lost roughly three-fourths of its value since March 2024. “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,” Filosa said in a statement. “They also reflect the impact of previous poor operational execution, the effects of which are being progressively addressed by our new team,” he said. Filosa will host a conference call with investors at 2:00 pm (1300 GMT) on Friday.
– ‘Freedom of choice’ –
Stellantis, whose 14 brands also include Fiat and Peugeot as well as Ram trucks, Dodge, Chrysler and Maserati, has been slammed in particular by falling sales in its key North American market. It was born of the 2021 merger of France’s PSA with its US-Italian rival Fiat Chrysler, creating the world’s fourth-biggest automaker. “Even though a ‘reset’ was widely expected…the scope of today’s announcements are beyond even the most cautious expectations,” said analysts at investment bank Oddo BhF, adding they had anticipated a 7 billion euro write-down.
In its statement, Stellantis said reducing its EV focus would offer clients “freedom of choice, including for those customers whose lifestyles and working requirements make the company’s growing range of hybrid and advanced internal combustion engine vehicles the right solution”. As recently as October it announced plans to invest $13 billion in US plants over the next four years, widely seen as a response to Trump’s tariffs on imported autos and parts. Later that month it posted a 13 percent rise in third-quarter revenues, citing improved business in the United States. “We have gone deep into every corner of our business and are making the necessary changes, mobilising all the passion and ingenuity we have within Stellantis,” Filosa said in the statement.
© 2024 AFP
