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 strategy, a move that sent shares into freefall and underscored how badly major automakers may have misread the pace of the EV transition. The charges, among the largest ever linked to an EV pullback, immediately rattled investors, wiped out shareholder value, and forced the company to scrap its dividend as pressure mounts across the global auto sector.
Stellantis’ Milan-listed shares plunged as much as 25% on Friday, falling to their lowest level since the group was formed in early 2021 through the merger of Fiat Chrysler and PSA.
The move follows similar, though smaller, writedowns by rivals including Ford and General Motors, as Western automakers retreat from battery-powered models amid weaker demand and policy shifts under the Trump administration.
Alongside tariffs, slower demand in China, and intensifying competition from lower-cost Chinese manufacturers, legacy carmakers are grappling with a slower-than-expected EV uptake — particularly in the United States, where subsidies have been rolled back and green technologies publicly dismissed.
“The Company has taken the vast majority of decisions required to correct direction, particularly related to aligning our product plans and portfolio with market demand,” Stellantis said in a statement. The group is set to present a new business plan in May.
Fabio Caldato, a portfolio manager at AcomeA SGR, which owns Stellantis shares, said the scale of the charges had become increasingly likely after recent impairments at U.S. rivals.
“Further encouraging data is needed to restore full investor confidence in Stellantis,” he said, adding that the lack of a clear recovery in the automotive semiconductor cycle could continue to limit sales momentum.
The charges, to be booked in the second half of 2025, are primarily linked to the re-alignment of product plans with customer preferences and U.S. emissions rules, “largely reflecting significantly reduced expectations for EV products,” the company said.
They also include costs tied to resizing Stellantis’ EV supply chain, revised warranty provisions linked to product quality issues, and previously announced job cuts in Europe.
Around 6.5 billion euros of the writedowns will involve cash payments spread over four years from 2026, the company added.
“While an impairment was expected, the magnitude — and the sizeable cash component — is a clear negative,” Citi analysts said in a note.
CEO Antonio Filosa began scaling back Stellantis’ EV ambitions last year after taking over from Carlos Tavares, whose aggressive electrification push coincided with prolonged sales declines in Europe and North America.
As part of that retrenchment, Stellantis has agreed to sell its 49% stake in a Canadian battery joint venture to LG Energy Solution.
The automaker now expects a preliminary net loss of 19–21 billion euros in the second half of fiscal 2025 and confirmed it will not pay a dividend this year. It also forecasts industrial cash burn of up to 1.6 billion euros in the period.
Stellantis plans to issue up to 5 billion euros in hybrid bonds, saying the measures will help preserve liquidity of roughly 46 billion euros at year-end.
The company will release final second-half and full-year 2025 results on February 26.
Key Issues Not Fully Addressed in Initial Coverage
Cash Exposure Versus Non-Cash Impairments
While the €22.2 billion ($26.5 billion) writedown has been widely reported, less attention has been paid to its composition. Around €6.5 billion represents actual cash outflows, expected to be spread over four years and largely linked to supplier commitments, restructuring actions, and operational adjustments.
The remaining charges are accounting impairments reflecting lower asset values and revised assumptions. This distinction is central to assessing near-term liquidity risk for Stellantis, rather than focusing solely on reported losses.
Implications for Manufacturing Footprint and Supply Chain
The charges are tied to a recalibration of EV-related production plans, supply-chain capacity, and warranty provisions. While the company has not disclosed specific closures or headcount reductions beyond previously announced measures, the scale of the writedown indicates elevated pressure on European manufacturing operations and battery-linked suppliers.
The impact is likely to be uneven across regions, particularly where EV investments were made ahead of confirmed demand.
Strategic and Governance Signalling to Investors
Beyond the immediate financial impact, the writedown carries broader implications for investor confidence. The suspension of the dividend, planned issuance of hybrid bonds, and delayed return to positive free cash flow suggest a longer recalibration of capital allocation priorities.
Markets appear to be reassessing not only the company’s EV strategy, but also the reliability of forward guidance, execution discipline, and management credibility following several years of aggressive investment assumptions.
