Stellantis scales back EV plans with $27 billion charge

The automaker is pivoting its strategy by broadening its powertrain mix to match customer demand as EV demand falls short in the U.S.

On the Dash:

• Stellantis recorded about $27 billion (€22.2 billion) in charges tied to an EV strategy reset.
• The automaker is pivoting toward a broader mix of gas, hybrid, and electric vehicles.
• Liquidity preservation and quality improvements are central to its near-term recovery plan.

Stellantis is resetting its global product and investment strategy after announcing approximately $27 billion (€22.2 billion) in charges tied largely to scaling back its electric vehicle ambitions, a move that sent its shares sharply lower and underscores mounting pressure on legacy automakers navigating a slower-than-expected EV transition.

The charges, recorded in the second half of fiscal 2025, reflect a reassessment of demand assumptions, product plans, supply chain investments, and quality-related costs. Stellantis said about $7.7 billion (€6.5 billion) of the charges will result in cash payments spread over the next four years beginning in 2026. The company also suspended its 2026 dividend and authorized up to $5.9 billion (€5 billion) in hybrid bond issuance to preserve liquidity.

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The strategic reset follows weaker EV demand in the U.S., regulatory shifts that have reduced federal incentives, and intensifying competition from lower-cost Chinese automakers. Stellantis has been particularly exposed in North America, where it relies heavily on high-margin Jeep and Ram trucks and where EV adoption remains well below European levels. Fully electric vehicles accounted for just 7.7% of U.S. new-vehicle sales last year, compared with 19.5% in Europe.

Under CEO Antonio Filosa, who took over last summer, Stellantis has moved away from aggressive electrification targets set by prior leadership. Those earlier plans envisioned EVs accounting for half of U.S. sales and all of European sales by 2030. The company now says those assumptions were overly optimistic and has shifted toward offering a broader mix of internal combustion, hybrid, and electric models, more closely aligned with customer demand.

As part of the reset, Stellantis has canceled or delayed several battery-electric vehicle programs, including the previously planned Ram 1500 BEV, and has agreed to sell its 49% stake in a Canadian battery joint venture to LG Energy Solution. The charges also include reductions in EV supply chain capacity, higher warranty provisions tied to quality issues, and restructuring costs related to previously announced job cuts in Europe.

Despite the financial hit, Stellantis reported early signs of operational improvement. Shipment volumes rose 11% year over year in the second half of 2025, led by a 39% increase in North America. U.S. market share improved sequentially, and customer orders increased across several regions. The company also hired more than 2,000 engineers globally to address quality concerns stemming from earlier cost-cutting measures.

The automaker forecasts modest revenue growth and a low-single-digit operating margin in 2026, with a return to positive industrial free cash flow expected in 2027.