Stellantis shares fall on Peugeot EV delays from battery plant issues
Production setbacks threaten electric vehicle rollout at $28.6bn automaker amid critical transition period
Stellantis NV, the $28.6bn automaker formed from the merger of Fiat Chrysler and PSA Group, faces fresh headwinds after battery plant operational problems triggered production delays for key Peugeot electric vehicle models, according to a report from Bloomberg. The manufacturing setbacks threaten to disrupt the company's ambitious electric vehicle rollout during a critical period of industry transformation.
The production delays come at a particularly challenging moment for Stellantis, which has been striving to accelerate its electrification strategy across its portfolio of 14 automotive brands. The Amsterdam-based company has invested heavily in battery production capacity, viewing vertical integration as essential to maintaining competitiveness in the rapidly evolving electric vehicle market. Battery supply chain reliability has become increasingly crucial as traditional automakers race to catch up with Tesla and Chinese competitors in the EV transition.
Stellantis currently trades at $10.21 per share, giving the company a market capitalization of approximately $28.6bn. The stock has struggled in recent months, trading well below its 52-week high of $13.12 reached earlier in the fiscal year. Analysts maintain a consensus target price of $12.47, suggesting room for recovery if the company can resolve its production challenges and execute its EV strategy successfully.
The automaker's financial metrics reveal mounting pressure on its core business. Stellantis reported trailing twelve-month revenue of $146.1bn, but quarterly revenue growth has declined 12.7% year-over-year, while earnings per share have fallen 45.5% over the same period. The company posted a loss of $0.91 per share in its most recent quarter, with negative profit margins of 1.6% reflecting broader operational challenges beyond the battery plant issues.
The Peugeot brand, one of Stellantis's flagship European marques, represents a crucial component of the company's electrification strategy. Delays in Peugeot EV models could impact the automaker's ability to meet increasingly stringent European Union emissions regulations and capture market share in the continent's competitive electric vehicle segment. Peugeot has traditionally been one of PSA Group's strongest performers, and any disruption to its product launch cadence carries significant commercial implications.
Stellantis's forward price-to-earnings ratio of 5.29 suggests the market has already priced in substantial execution risk, though the low valuation also reflects potential upside if management can navigate current operational challenges. The company maintains a dividend yield of 6.9%, which could provide some support to the share price even as investors await clarity on the battery plant situation and its impact on production schedules.
The broader automotive industry faces intensifying pressure as electric vehicle adoption accelerates globally. Legacy automakers are simultaneously investing billions in new technology while managing declining demand for internal combustion engine vehicles. Battery production capacity has emerged as a critical bottleneck, with companies like Volkswagen, General Motors, and Ford all pursuing similar vertical integration strategies to secure supply for their EV ambitions.
Investors will be watching for management commentary on when the battery plant issues might be resolved and what financial impact the production delays could have on 2026 earnings guidance. Stellantis has not yet provided revised production timelines or updated financial forecasts related to the operational problems, leaving analysts to estimate the potential revenue impact based on the duration and severity of the disruptions.
The Peugeot model delays underscore the execution risks facing traditional automakers as they transform their manufacturing operations and supply chains for the electric era. While Stellantis has the financial resources and brand portfolio to weather near-term setbacks, repeated production issues could erode market share and investor confidence during a period when competition in the electric vehicle segment is intensifying rapidly.