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Stellantis announced Friday that it will ask for $26.5 billion if the automaker makes cuts electric vehicle (EV) production, joining other manufacturers who took a financial hit after misjudging consumer demand for electric vehicles.
Stellantis – the parent company of brands such as Chrysler, Jeep, Cleverness and Ram – became the latest automaker to take the lead. The $26.5 billion levy is larger than those imposed by Ford and General Motors in the wake of the end of federal EV subsidies.
The automaker had set ambitious EV goals under its former CEO, Carlos Tavares, who aimed for EVs to make up 100% of European sales and 50% of US sales by 2030. Tavares was forced out in 2024 after U.S. sales plummeted, where Stellantis is exposed due to its reliance on high-margin Jeep and Ram pickup sales.
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A fully electric vehicle from model year 2026, the Fiat 500e. (Stellantis)
Across the automotive industry, fully electric vehicles represented 19.5% of European sales last year and just 7.7% of new car sales in the US.
CEO Antonio Filosawho took the helm at Stellantis last summer, said on a call with reporters that the company’s previous assumptions about electric vehicle demand were “too optimistic” and outlined: “What we are announcing today is a major strategic reset of our business model… to put our customer preferences back at the heart of what we do, globally and in every region.”
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| STLA | STELLANTIS NV | 7.17 | -2.36 |
-24.75% |
Stellantis’ indictmentbooked in the company’s results for the second half of 2025 also reflected quality issues that Filosa blamed on cost cuts that took place under Tavares, which he said led the automaker to hire 2,000 engineers worldwide.
The costs also include reductions in the company’s EV supply chain, revised warranty provision assumptions due to poor product quality, as well as previously announced job losses in Europe.
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Stellantis is a multinational automaker with brands ranging from Fiat and Maserati to Chrysler, Jeep and Dodge. (Geoff Robins/AFP via Getty Images)
Ross Mould, investment director at AJ Bell, said the downgrade showed Stellantis “was wrong about how quickly the world would transition from combustion engines to electric power.”
Mold added that the success of Chinese EV makers like BYD “raises the question of whether Stellantis’ frustration with EV sales is related to market issues or whether drivers simply don’t like the cars.”
Stellantis Shares fell on the news, with the company’s New York-traded shares falling more than 22% during Friday’s trading session.
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The multinational car manufacturer – which also includes American, French and Italian car brands – saw its shares traded in Milan fall by more than 23%.
Stellantis forecasts mid-single-digit net sales growth through 2026, along with a low-single-digit adjusted operating income margin. It expects positive industrial free cash flows in 2027. The company will also not pay a dividend this year.
Reuters contributed to this report.
