Stellantis Announces Major €22 Billion Writedown in Electric Vehicle Strategy Shift
In a significant reversal of its electric vehicle ambitions, global automaker Stellantis NV is taking €22 billion (approximately US$26 billion) in charges to overhaul its EV strategy. This represents one of the largest such writedowns in the automotive industry and triggered a dramatic 24 percent plunge in the company's shares, wiping over €5 billion from its market value.
Ontario Battery Plant Venture Abandoned
The company simultaneously announced its departure from a joint venture with South Korean battery manufacturer LG Energy Solution Ltd. in Canada. This venture, announced in 2022 with plans for over $5 billion in investment, was intended to establish the first large-scale electric vehicle battery manufacturing facility in Windsor, Ontario. LG Energy Solution will now acquire Stellantis's stake in the project.
Leadership Blames Previous Strategic Missteps
Current CEO Antonio Filosa, who assumed leadership in June, attributed the costly reversal to his predecessor Carlos Tavares's aggressive push into electric vehicles without adequate response to shifting market conditions. "The moves largely reflect the cost of over-estimating the pace of the energy transition," Filosa stated. He emphasized that the reset demonstrates "the impact of previous poor operational execution" that his new team is working to address.
Industry-Wide EV Challenges
Stellantis joins several major automakers facing similar challenges with electric vehicle adoption. The industry has been grappling with:
- Sluggish consumer demand for electric vehicles
- Changing regulatory landscapes, including reduced incentives in the United States
- Softening sales mandates in the European Union
- Increasing competition from Chinese automotive brands
- Consumer resistance to higher vehicle prices
These factors have forced multiple manufacturers to reconsider their electric vehicle timelines and investments. Ford Motor Company announced US$19.5 billion in charges related to its EV operations restructuring in December, while General Motors has recorded US$7.6 billion in writedowns. Porsche AG similarly reduced its outlook multiple times last year as it scaled back electric vehicle ambitions.
Strategic Reorientation Toward Combustion Engines
The substantial charges cover costs associated with cancelling planned electric vehicle models and compensating suppliers affected by the strategic shift. This financial reset enables Stellantis to redirect resources toward combustion engine vehicles as the company seeks to regain market position. The announcement comes as Filosa attempts to navigate additional challenges including rising tariffs under U.S. trade policies.
Stellantis had previously committed to selling only electric vehicles in Europe and achieving 50 percent EV sales in the United States by 2030 under Tavares's leadership. These targets were abandoned shortly after his departure in late 2024, reflecting the company's broader adjustment to market realities.
Financial Implications and Market Reaction
The €22 billion charge significantly exceeded analyst expectations and will impact the second half of the 2025 financial year, though it won't affect adjusted operating income. As a consequence of these substantial writedowns, Stellantis will not distribute a dividend to shareholders this year.
The company's shares experienced their most severe single-day decline on record in Milan trading, reflecting investor concerns about the scale of the strategic reversal and its implications for future profitability in an increasingly competitive automotive landscape.
