Stellantis Shock: $26.5 Billion EV Writedown Triggers Share Collapse and Dividend Freeze
Stellantis has unveiled a sweeping 22.2 billion euro ($26.5 billion) writedown tied to its electric-vehicle technique, a transfer that despatched shares into freefall and underscored how badly main automakers might have misinterpret the tempo of the EV transition. The fees, among the many largest ever linked to an EV pullback, instantly rattled buyers, worn out shareholder worth, and compelled the corporate to scrap its dividend as stress mounts throughout the worldwide auto sector.
Stellantis’ Milan-listed shares plunged as a lot as 25% on Friday, falling to their lowest stage because the group was fashioned in early 2021 by means of the merger of Fiat Chrysler and PSA.
The transfer follows comparable, although smaller, writedowns by rivals together with Ford and Common Motors, as Western automakers retreat from battery-powered fashions amid weaker demand and coverage shifts underneath the Trump administration.
Alongside tariffs, slower demand in China, and intensifying competitors from lower-cost Chinese language producers, legacy carmakers are grappling with a slower-than-expected EV uptake — significantly in the USA, the place subsidies have been rolled again and inexperienced applied sciences publicly dismissed.
“The Firm has taken the overwhelming majority of choices required to right course, significantly associated to aligning our product plans and portfolio with market demand,” Stellantis stated in a press release. The group is about to current a brand new marketing strategy in Could.
Fabio Caldato, a portfolio supervisor at AcomeA SGR, which owns Stellantis shares, stated the dimensions of the costs had turn into more and more seemingly after latest impairments at U.S. rivals.
“Additional encouraging knowledge is required to revive full investor confidence in Stellantis,” he stated, including that the shortage of a transparent restoration within the automotive semiconductor cycle may proceed to restrict gross sales momentum.
The fees, to be booked within the second half of 2025, are primarily linked to the re-alignment of product plans with buyer preferences and U.S. emissions guidelines, “largely reflecting considerably decreased expectations for EV merchandise,” the corporate stated.
In addition they embody prices tied to resizing Stellantis’ EV provide chain, revised guarantee provisions linked to product high quality points, and beforehand introduced job cuts in Europe.
Round 6.5 billion euros of the writedowns will contain money funds unfold over 4 years from 2026, the corporate added.
“Whereas an impairment was anticipated, the magnitude — and the sizeable money element — is a transparent damaging,” Citi analysts stated in a word.
CEO Antonio Filosa started scaling again Stellantis’ EV ambitions final yr after taking on from Carlos Tavares, whose aggressive electrification push coincided with extended gross sales declines in Europe and North America.
As a part of that retrenchment, Stellantis has agreed to promote its 49% stake in a Canadian battery three way partnership to LG Vitality Resolution.
The automaker now expects a preliminary web lack of 19–21 billion euros within the second half of fiscal 2025 and confirmed it can not pay a dividend this yr. It additionally forecasts industrial money burn of as much as 1.6 billion euros within the interval.
Stellantis plans to challenge as much as 5 billion euros in hybrid bonds, saying the measures will assist protect liquidity of roughly 46 billion euros at year-end.
The corporate will launch closing second-half and full-year 2025 outcomes on February 26.
Key Points Not Absolutely Addressed in Preliminary Protection
Money Publicity Versus Non-Money Impairments
Whereas the €22.2 billion ($26.5 billion) writedown has been extensively reported, much less consideration has been paid to its composition. Round €6.5 billion represents precise money outflows, anticipated to be unfold over 4 years and largely linked to provider commitments, restructuring actions, and operational changes.
The remaining expenses are accounting impairments reflecting decrease asset values and revised assumptions. This distinction is central to assessing near-term liquidity threat for Stellantis, reasonably than focusing solely on reported losses.
Implications for Manufacturing Footprint and Provide Chain
The fees are tied to a recalibration of EV-related manufacturing plans, supply-chain capability, and guarantee provisions. Whereas the corporate has not disclosed particular closures or headcount reductions past beforehand introduced measures, the dimensions of the writedown signifies elevated stress on European manufacturing operations and battery-linked suppliers.
The affect is more likely to be uneven throughout areas, significantly the place EV investments had been made forward of confirmed demand.
Strategic and Governance Signalling to Traders
Past the speedy monetary affect, the writedown carries broader implications for investor confidence. The suspension of the dividend, deliberate issuance of hybrid bonds, and delayed return to constructive free money circulation recommend an extended recalibration of capital allocation priorities.
Markets seem like reassessing not solely the corporate’s EV technique, but additionally the reliability of ahead steerage, execution self-discipline, and administration credibility following a number of years of aggressive funding assumptions.
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