Stellantis ( STLA ) reported a hefty €22 billion ($25.94 billion) charge as it restructures its electric vehicle business.
Stellantis said it would pay 6.5 billion euros ($7.7 billion) in cash over the next four years, with charges totaling 14.7 billion euros ($17.34 billion) based on the company’s second-half 2025 results. However, these charges will not impact Stellantis’ adjusted operating income.
“The charges announced today largely reflect the costs of overestimating the speed of the energy transition, which distances us from the realistic needs, means and desires of many car buyers,” Stellantis CEO Antonio Filosa said in a statement. “They also reflect the impact of poor execution from previous operations, the impact of which our new team is gradually addressing.”
Stellantis shares plunged 25% on Friday and closed down nearly 24%.
“These charges come at a cost and a realignment is very much needed,” Filosa added on a conference call with analysts. “This is a strategic and far-reaching reset.”
Strantis said the cash payments over the next four years were related to the cancellation of certain products as well as some ongoing electric vehicle products, “whose sales are now expected to be significantly lower than previously forecast”.
The largest portion of the charges are related to realigning production plans in line with customer preferences and the impact of new U.S. emissions regulations enacted by the Trump administration, which reflect “significantly lower expectations for all-electric vehicle products.”
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These include write-offs from product cancellations and impairments on certain electric vehicle platforms, the company said.
Other costs include changes to the EV supply chain, such as batteries; other non-EV costs, such as warranty terms; and a reduction in the European workforce.
Due to the losses, Stellantis said it would not pay dividends and its board of directors has authorized the issuance of 5 billion euros ($5.9 billion) of non-convertible bonds to shore up its financing.
General Motors (GM)’s electric vehicle business suffered a cumulative loss of $6.6 billion in December, and Ford (F) also suffered a loss of $19.5 billion in the same month, followed by Stellantis’ massive write-offs.
Looking ahead to 2026, Stellantis expects revenue to grow by mid-single digits and AOI margins to grow by low single digits. The company will release full financial results on February 26.
Pras Subramanian is Yahoo Finance’s chief automotive reporter. You can follow him X etc. Instagram.
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