Stellantis' $26 billion write-down adds to a mountain of EV losses
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Stellantis revived the canceled Hemi V8 engine in its Ram pickups. Photo: Stellantis
The price of misjudging the switch to electric vehicles swelled again Friday as Jeep-maker Stellantis announced 22.2 billion euros ($26.2 billion) in charges, the largest yet by any global automaker.
Why it matters: The auto industry is saddled with billions of dollars in stranded investments inspired by clean vehicle policies that got ahead of consumer demand.
- The EV reversal is "the single biggest capital allocation mistake in the history of the automotive industry," Haig Partners managing director John Murphy told CNBC recently, predicting at least $100 billion in write-downs on EV investments.
Driving the news: Stellantis, parent of Chrysler, Fiat and 12 other brands in the U.S. and Europe, announced on Friday what it called a "strategic reset" of its business.
- The $22.6 billion in special charges includes $7.7 billion in cash payments over the next four years.
- The write-downs cover the cost of canceling EVs and compensating suppliers, as well as what CEO Antonio Filosa called "poor operational execution" by his predecessor, Carlos Tavares.
- Stellantis also said it was selling its 49% interest in a new EV battery plant in Canada, just over the border from Detroit, to its joint-venture partner, LG Energy Solutions.
- Stellantis shares plunged as much as 29% in trading in Milan, as the charges significantly exceeded analyst projections after the company reaffirmed its guidance in December. In trading before the open of the U.S. market on Friday, its shares were down 24%.
The big picture: It's just the latest in a series of huge write-offs by global automakers as they adjust to the realities of slower-than-expected EV demand.
- GM took $7.6 billion in charges for 2025, and said more are likely in 2026.
- Ford announced $19.5 billion in EV write-downs, some of which will occur in 2026 and 2027.
- Volkswagen Group took a $6 billion hit, mostly from scaling back its EV plans for Porsche.
Zoom in: Filosa said the strategic reset, which is already under way with actions taken in 2025, will position Stellantis to grow again.
- The company reversed product decisions made under the former CEO, Tavares, and is now investing in new products where it doesn't compete, such as mid-size pickup trucks.
- It reintroduced the discontinued Jeep Cherokee SUV as a hybrid, for example, and brought back the popular Hemi V-8 engine in its Ram pickups.
- It's also investing in innovative technologies, such as extended-range electric powertrains for large pickups and SUVs.
- In all, Stellantis is investing $13 billion in new products for North America.
What they're saying: "We are investing a lot to grow. This is our No. 1 mission, growing volumes with our iconic brands in the two major regions where we operate, North America and Europe," Filosa told reporters.
The bottom line: In a global market that's stagnant, where Chinese competitors are coming on strong, that's going to be a tall order.
