Stellantis plunges 7% after €22bn charges and dividend suspension
Auto giant scales back EV ambitions under 'freedom of choice' strategy as it posts massive H2 2025 loss
Stellantis shares plunged 6.7% on Friday after the automaker announced approximately €22.2 billion in charges and suspended its 2026 dividend, marking a dramatic strategic reversal under new leadership as the company grapples with fading electric vehicle demand and quality issues.
The stock dropped to $9.54 in New York trading, extending a decline that has seen the shares fall from the low-€20s in early 2024 to single digits. The Amsterdam-based company reported a preliminary net loss of €19 billion to €21 billion for the second half of 2025, with adjusted operating income of between negative €1.2 billion and €1.5 billion.
The massive charges reflect what Stellantis termed a "business reset" designed to realign production with customer preferences that have shifted away from pure electric vehicles. The breakdown includes €14.7 billion for product plan re-alignment, driven by significantly reduced expectations for battery electric vehicles. Of that amount, €2.9 billion covers write-offs for cancelled products and €6 billion for platform impairments due to lower projected volumes and profitability for BEVs.
"We are resetting our business to meet customer preferences and to support profitable growth," the company stated in its official announcement. The new approach, dubbed "freedom of choice," abandons the aggressive electrification targets of the previous "Dare Forward 2030" plan in favor of offering customers a broader mix of electric vehicles, hybrids, and advanced internal combustion engines.
An additional €5.4 billion in charges relates to operational changes, including a €4.1 billion increase in warranty provisions. The company cited "increased cost inflation, quality issues from new powertrains, and a deterioration in quality from past operational choices" as drivers behind the warranty adjustment. Another €2.1 billion in charges covers the resizing of the electric vehicle supply chain, including rationalization of battery manufacturing capacity.
The dividend suspension for 2026 comes as no surprise to analysts following the company's deteriorating financial position. Morgan Stanley downgraded Stellantis from Overweight to Equalweight on February 3, describing the automaker as "the European company lagging behind on investments, product pipeline." Despite the downgrade, a consensus of four analysts maintained a Buy rating as of February 5.
Stellantis is taking steps to strengthen its balance sheet, authorizing the issuance of up to €5 billion in non-convertible subordinated perpetual hybrid bonds. The company reported industrial available liquidity of approximately €46 billion at year-end 2025, providing some cushion as it works through the restructuring.
The company's 2026 guidance projects a mid-single-digit percentage increase in net revenues and a low-single-digit adjusted operating income margin, which includes approximately €1.6 billion in net tariff expenses. Stellantis expects to improve industrial free cash flows year-over-year and anticipates positive industrial free cash flow in 2027.
There are early signs that the strategic shift is gaining traction. The company reported an 11% year-over-year increase in second-half 2025 consolidated shipment volume to 2.8 million units, with North America shipments surging 39%. Customer order intake in Enlarged Europe also increased. Additionally, initial quality metrics have improved, with reported issues decreasing more than 50% in North America and over 30% in Enlarged Europe since early 2025.
The product cancellations include the Ram 1500 BEV, as the company eliminates vehicles unable to achieve profitable scale. Stellantis is investing $13 billion over the next four years in the United States, introducing new vehicles and re-empowering regional teams to better respond to local market conditions.
CEO Antonio Filosa is expected to unveil the company's long-term strategic vision at an Investor Day event on May 21, 2026. The presentation will be closely watched for details on how Stellantis plans to navigate the increasingly competitive landscape while balancing regulatory pressure for electrification with consumer demand for more affordable vehicle options.