Stellantis shares fell 23.7% on Friday following the automaker's disclosure of a substantial €22.2 billion charge related to scaling back its electric vehicle ambitions. The company also reported a preliminary net loss of up to €21 billion for the second half of 2025 and canceled its dividend for the year.
Battery Plant Projects Shelved
The Automotive Cells Company (ACC) joint venture, in which Stellantis holds a stake, informed unions over the weekend that it will not proceed with planned battery gigafactories in Termoli, Italy, and Kaiserslautern, Germany. Both sites have been idle since May 2024. This decision represents a setback for Europe's strategy to build a domestic battery supply chain.
CEO Antonio Filosa described the move as "an important strategic reset," acknowledging that previous expectations for EV adoption were "over optimistic." The company emphasized it remains committed to maintaining flexibility, continuing hybrid and combustion engine production while keeping the EV option open should demand rebound.
Broader Industry Challenges
Stellantis is not alone in facing EV transition difficulties. Automakers worldwide are reassessing their electric vehicle investments as demand softens, subsidy landscapes shift, and competitive pressure—particularly from Chinese manufacturers—intensifies. Investment director Russ Mould of AJ Bell noted the write-down highlights how Stellantis "got it wrong" on the pace of the EV transition.
The company faces a delicate balancing act: scaling back too aggressively risks leaving it unprepared for a potential surge in EV demand, while maintaining current spending levels could strain its balance sheet if demand remains subdued. Stellantis's reliance on profitable North American truck sales also leaves it vulnerable to economic fluctuations in that region.
Investors are now focused on the company's February 26 earnings report, where management will provide detailed guidance on 2026 revenue, margins, and cash flow. The market will be watching closely for specifics on the scope of the battery and EV strategy overhaul and its financial implications.
