Paris (France) (AFP) – Jeep maker Stellantis warned Friday that it would take a 22 billion euro hit after a slower take up of electric vehicles than it expected, heaping pressure on its new chief executive to navigate a chaotic transition 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 EVs, sparked by President Donald Trump’s scrapping of hefty subsidies. 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 over his contested premium pricing policy. He was replaced last July by Antonio Filosa, an Italian veteran of Fiat who immediately embarked on a management shake-up with a vow to restore profitability after a 70 percent plunge in 2024 net profit, to 5.5 billion euros.
“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. The surprisingly big write-down will drive Stellantis into the red when it unveils 2025 earnings on February 26, and no dividend will be paid the year. Investors punished the group’s shares, down nearly 26 percent at 6.09 euros in afternoon trading in Paris. The stock has lost roughly 80 percent of its value since March 2024.
– ‘We went bigger’ – Filosa said 75 percent of the financial hit stemmed from being “over-optimistic” on the adoption of electric vehicles, mainly in North America. “We went bigger in EVs than many others and we stayed longer on this assumption,” he told a press briefing Friday. But he also blamed cost-cutting decisions that hampered the carmaker’s ability to change course. “For instance, to cut costs we decided to eliminate thousands of engineers, especially in North America. Those were the ones that are needed to improve,” he said. Since his arrival around two thousand engineers have been hired, Filosa said, “and we are still recruiting a lot of field professionals.”
Filosa also confirmed a plan to invest $13 billion in the United States announced last October, citing strong demand for new petrol-powered models like a Ram 1500 pickup with a huge Hemi V8 engine, which had “Day one, 10,000 orders” and 60,000 to date, Filosa said. Likewise for a new Dodge Charger ICE, for which “we are sold out in orders for our model year 2026 production,” he said. Overall, Stellantis saw a 43 percent rise in North America shipments to dealers in the fourth quarter of 2025, to 422,000 vehicles. But shipments in Europe were down four percent in the quarter to 667,000 vehicles, the company said Friday.
“We are number two in this very important electric market in Europe,” Filosa said, saying the problem is “not the technology itself, which is very good.” “I don’t see any danger for Stellantis. I’m very optimistic for our future.”
– ‘Freedom of choice’ – As part of the strategic “reset,” Stellantis also said Friday that it would sell its 49 percent stake in a Canadian gigafactory battery site to its partner LG Energy, where over five billion Canadian dollars has already been invested. The Stellantis, whose 14 brands also include Fiat and Peugeot as well as Chrysler and Maserati, 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 wariest of expectations,” said analysts at investment bank Oddo BhF said, 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.”
© 2024 AFP
