Stellantis Unveils Major Business Overhaul as EV Bets Trigger $26 Billion Hit
Stellantis, the global automaker behind brands such as Jeep and Chrysler, has announced a major strategic overhaul after its aggressive push into electric vehicles failed to deliver the expected returns, prompting massive financial charges and a sharp sell-off in its shares.
The company said on Friday it will record more than $26 billion in charges, largely tied to write-downs, canceled electric vehicle projects, and cash costs associated with scaling back its EV supply chain. The announcement rattled investors, sending Stellantis shares down by as much as 30% in early trading.
The move places Stellantis alongside other major US carmakers, including Ford and General Motors, which have also recently pulled back on costly EV expansion plans amid softer-than-expected demand.
For several years, automakers accelerated investments in electric vehicles in response to stringent emissions rules introduced under the Biden administration, as well as expectations that more US states would follow California in banning the sale of new gasoline-powered cars within the next decade.
However, the policy environment has shifted. The Trump administration has rolled back key emissions regulations, reduced financial incentives for EV adoption, and challenged states’ authority to impose stricter environmental standards, altering the economic outlook for electric vehicles.
Stellantis Chief Executive Officer Antonio Filosa said the charges – totaling €22.2 billion – reflect a miscalculation of how quickly consumers would transition away from combustion engines.
“These adjustments largely reflect the cost of overestimating the pace of the energy transition,” Filosa said.
In a statement, the company emphasized a more market-driven approach to electrification, noting that the shift toward EVs should be shaped by consumer demand rather than regulatory pressure. Stellantis said it remains committed to offering a wide range of powertrain options, including hybrids and advanced internal combustion engines, to meet varying customer needs.
The largest portion of the charges, €14.7 billion, relates to revising product plans to better align with customer preferences and updated emissions rules in the United States, underlining the company’s more cautious outlook for EV demand.
Although Stellantis is scheduled to release its full 2025 earnings report on February 26, the company disclosed on Friday that it recorded a net loss for the year. As a result, it said it will not pay an annual dividend in 2026.
Despite the setback, Filosa struck an optimistic tone for the year ahead, telling analysts on an earnings call that Stellantis expects to remain profitable throughout 2026.
Policy Shifts Add to EV Uncertainty
Developments in Europe have further complicated the transition to cleaner vehicles. The European Union had planned to prohibit the sale of new combustion-engine cars by 2035. But in December, following lobbying from automakers, EU officials revised the plan so that the ban will apply to only 90% of new vehicles, allowing limited sales of plug-in hybrids and combustion-engine cars beyond that date.
EV adoption in Europe has lagged industry expectations, partly due to uneven charging infrastructure and persistent consumer concerns over cost and range.
The environmental case for electric vehicles also remains complex. While EVs produce no tailpipe emissions, their manufacturing – particularly battery production – is more carbon-intensive. Studies suggest fully electric vehicles generate around 40% more emissions during production compared with gas-powered or hybrid cars.
Over their full lifetimes, however, EVs generally outperform traditional vehicles on emissions, producing roughly 40% less carbon pollution than gasoline-powered cars once usage is factored in.
As automakers reassess their strategies, Stellantis’ reset highlights the growing tension between regulatory ambition, market demand, and the economic realities of the global auto industry.
