:max_bytes(150000):strip_icc()/GettyImages-2257461141-df18421af8944a51b9bf65254591c45c.jpg "Stellantis Shares Are Tumbling to Their Lowest Point in Over 5 Years. Here’s Why")
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Key Takeaways
- Stellantis shares sank sharply Friday morning after the company announced a “reset” of its electric vehicle business.
- The company expects to post a net loss for 2025 and will take on about $26 billion in charges for the second half of 2025 as it pivots to focus less on EVs.
Another big automaker is making major changes to its electric vehicle strategy. Investors aren’t cheering the move.
Shares of Stellantis (STLA) plunged 25% Friday morning to their lowest point since April 2020, after the automaker announced several changes as part of a “reset” of its business to better meet consumer demand.
The maker of Jeep, Chrysler, Dodge, and other car brands said it expects to take a charge of about 22 billion euros ($26 billion) for the second half of 2025, largely due to an overhaul of its electric vehicle strategy. Ford (F) and General Motors (GM) each made similar announcements in recent months, with plans to take on big charges as they pivot to focus less on all electric vehicles and more on hybrids and traditional internal combustion engine cars.
Why This News is Important
EV demand in the U.S. has taken a hit since federal tax credits for EVs expired late last year, and several automakers have said they plan to focus less on EVs in the U.S. market as consumers are looking for more affordable options.
“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,” Stellantis CEO Antonio Filosa said, adding that the charges also “reflect the impact of previous poor operational execution,” which he said the company is fixing since he took over in mid-2025.
Stellantis said that it expects to record a net loss for 2025, which led the company to suspend its dividend for 2026 and approve the sale of up to 5 billion euros in hybrid bonds. Revenue and adjusted operating income are expected to improve in 2026, with larger gains coming the second half of the year, Stellantis said.
As part of the realignment of its EV strategy, Stellantis said that it will sell its 49% stake in NextStar Energy, a battery manufacturing joint venture in Canada, to its 51% partner, LG Energy Solution. Stellantis said it still plans to be a leader in the EV space, but said its strategy will continue “at a pace that needs to be governed by demand rather than command.”
With Friday’s losses, the automaker’s stock has lost about a third of its value since the start of the year and nearly half in the last 12 months.
