Stellantis $26 billion hit overhauling its business

Shares of automaker Stellantis plunged 27% in European trading on Friday, after the company said it expects to take a 22-billion-euro ($26 billion) hit from a business reset and hinted at a pull-back from its electrification push.

By 12:57 p.m. in Milan, the company’s Italian shares were 27% lower. In premarket trading on Wall Street, the transatlantic firm’s New York-listed stock plummeted 26.5%.

Other French auto stocks also fell Friday morning, with Valeo and Forvia both down more than 1.2% and Renault sliding 2%.

“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,” said Stellantis CEO Antonio Filosa 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.”

Going forward, Stellantis said it would remain at the forefront of EV development, but said its own electrification journey would continue at “a pace that needs to be governed by demand rather than command.”

Stellantis also pre-released some figures for the fourth quarter on Friday, saying it anticipates a net loss for 2025. In recognition of that net loss, it has suspended its dividend for 2026 and plans to raise up to 5 billion euros by issuing hybrid bonds.

For 2026, the auto giant is targeting a mid-single-digit percentage increase in net revenue and a low-single-digit increase in its adjusted operating income margin.

The company said its dividend pause and bond issuance would help preserve its balance sheet, and outlined the actions it had taken last year as part of its reset strategy.

These included announcing “the largest investment in Stellantis’ U.S. history” — totalling $13 billion over four years — as well as launching 10 new products, canceling products that could not achieve profit at scale, and restructuring its global manufacturing and quality management capabilities.

Under the U.S. investment drive, the transatlantic automaker has said it will add 5,000 jobs to its American workforce.

While these moves had resulted in costs of 22.2 billion euros, the company said they had collectively delivered a return to positive volume growth in 2025.

In the second half of the year, Stellantis’ U.S. market share rose to 7.9%, while the company said it retained its overall second-place market share position in the enlarged Europe.

Stellantis’ writedown follows multibillion-dollar hits at rivals Ford and GM, which recently announced their own hits worth $19.5 billion and $7.1 billion, respectively — both being related to EV pullbacks.

Given the “magnitude of the kitchen sinking” and the soft 2026 guidance, UBS analysts said the negative share-price reaction was expected. They added, however, that new management’s “decisive” clean-up and solid regional market fundamentals leave the stock attractive as a potential U.S. “comeback” play.

Friday’s writedown announcement came alongside news that Stellantis will offload its stake in NextStar Energy, a joint venture with LG Energy Solution that built and operated a Canadian battery manufacturing facility. LG Energy Solution will take over Stellantis’ 49% stake, the firms said on Friday morning.

The joint venture was part of Stellantis’ broader electrification strategy. In 2022, former CEO Carlos Tavares set a goal for 100% of sales in Europe and 50% of sales in the U.S. to be battery electric vehicles by the end of the decade.

The company is set to present an updated long-term strategy at its Capital Markets Day in May.

Stellantis’ stock has been under pressure for some time, with its Italian shares slumping nearly 25% last year and 40.5% the previous year. Shares are currently down more than 13% since the beginning of 2026.

Filosa previously dubbed 2026 the “year of execution” for the embattled automaker, which has been grappling with falling sales, leadership changes and disappointing earnings for several years. In July, the company said it expected to take a tariffs hit of around 1.5 billion euros in 2025, as it reported a first-half net loss of 2.3 billion euros.

In a Friday note, Russ Mould, investment director at AJ Bell, said Stellantis had placed a “miscalculated bet” on electric vehicles – but said the broader picture on EV adoption raised questions about Stellantis’ marketability.

“The long-held argument about why many drivers won’t go electric yet are concerns about price, access to charging infrastructure, and how long a battery will last during their journey,” he said.

“However, prices are coming down, more chargers are being installed, and battery range is improving. The success of companies like BYD suggests there are plenty of people willing to take the leap. That begs the question as to whether Stellantis’ frustration over its EV sales is linked to market issues or that drivers simply don’t like its vehicles.”

Stellantis is scheduled to publish its 2025 earnings in full on Feb. 26.