Stellantis plunges on €22.2B write-down, suspends dividend
CEO admits overestimating EV demand; sells battery JV stake as automaker resets strategy
Stellantis shares fell 6.7% on Friday after the automaker announced a staggering €22.2 billion ($25.9 billion) write-down and suspended its annual dividend for 2026, marking one of the most dramatic strategic reversals in the automotive industry's electric vehicle transition.
The Dutch-Italian automaker, formed from the merger of Fiat Chrysler and PSA Group, said it would record approximately €22.2 billion in charges for the second half of 2025, including €6.5 billion in cash payments expected over the next four years. The announcement triggered a sharp sell-off, with shares trading at $9.54 in New York, contributing to a year-to-date decline of more than 25%. The write-down represents roughly 75% of the company's $29.5 billion market capitalization.
"The charges largely reflect the cost of over-estimating the pace of the energy transition," said CEO Antonio Filosa in a statement acknowledging that the company had "distanced ourselves from many car buyers' real-world needs, means, and desires." He also cited "the impact of previous poor operational execution," which the new management team is now addressing.
The massive impairment breaks down into three primary categories: €14.7 billion for realigning product plans with diminished electric vehicle expectations and new US emissions regulations; €2.1 billion for resizing the EV supply chain; and €5.4 billion for operational changes including workforce reductions. The company expects a preliminary net loss of €19-€21 billion for the second half of 2025.
In a related strategic shift, Stellantis agreed to sell its 49% stake in NextStar Energy, the battery joint venture established with LG Energy Solution in 2022, to its partner. The JV has attracted more than $5 billion CAD in investment and was building Canada's first large-scale battery manufacturing facility in Windsor, Ontario. Stellantis will remain a customer of the plant, which will now operate under LG Energy Solution's full ownership.
The automaker is fundamentally rethinking its powertrain strategy, moving away from an all-in electric vehicle approach toward what executives termed "freedom of choice." The company said it will accelerate the rollout of electric and hybrid vehicles while continuing to offer advanced internal combustion engines for customers whose "lifestyles and working requirements" are better suited to traditional powertrains.
"The pace of development needs to be governed by demand, rather than command," the company said in its press release outlining the strategic reset.
Analysts expressed concern about the magnitude of the charges and what they reveal about Stellantis's previous strategic planning. JPMorgan analysts described the write-down as "eye-watering" and noted that it raises questions about the automaker's electric vehicle investments made over the past several years.
The dividend suspension represents a significant blow to income investors, particularly as Stellantis had been known for its attractive yield. The company had paid $0.68 per share annually, yielding approximately 6.8% before Friday's announcement. The suspension comes despite the company previously emphasizing its commitment to shareholder returns.
Despite the dramatic reset, some analysts see value in the stock at current levels. Stellantis trades at a forward price-to-earnings ratio of 5.39 and a price-to-book ratio of 0.33, suggesting the market may be pricing in significant pessimism. Of nine analysts covering the stock, four rate it a buy or strong buy with an average target price of $12.47, representing roughly 31% upside from current levels.
The strategic overhaul reflects growing pressure across the automotive industry as major manufacturers confront slowing electric vehicle adoption rates, rising competition from Chinese manufacturers, and substantial capital requirements that have strained profitability. Ford and General Motors have also scaled back their electric vehicle targets in recent months, though neither has announced charges approaching Stellantis's magnitude.
Stellantis's challenges are particularly acute given its extensive portfolio of brands across Europe and North America, including Jeep, Ram, Fiat, Peugeot, and Citroën. The company's presence in price-sensitive European markets has made it more vulnerable to slowing EV demand, as consumers in those regions have been slower to transition to electric vehicles despite generous government incentives.
The company said it expects to close the "execution gaps" in 2026 and build on "early signs of renewed growth." However, with a projected net loss for 2025 and no dividend payments on the horizon, investors will need to see tangible evidence that the strategic reset is delivering results before confidence returns to the stock.