Stellantis’ Business Reset
Stellantis is undergoing a significant transformation, announcing a ‘reset’ of its business model as it recalibrates its focus on electric vehicles (EVs). The company is moving away from an aggressive EV strategy and shifting towards offering consumers a variety of powertrain options.
Financial Fallout
- Stellantis expects to incur losses up to $24.8 billion in the latter half of 2025.
- The automaker has declared a $26.2 billion charge, primarily due to its pivot towards “freedom of choice” for consumers.
Strategic Changes in Product Offerings
Following the departure of former CEO Carlos Tavares, Stellantis has made notable product changes, including discontinuing plug-in hybrids in North America and scrapping the fully electric Ram 1500 REV. Instead, the company has revived traditional powertrains, including the 5.7-liter Hemi V8 and the supercharged 6.2-liter V8 for the TRX.
CEO Antonio Filosa’s Insights
CEO Antonio Filosa stated that this reset is part of a long-term strategy initiated in 2025, aiming to align more closely with customer preferences. He acknowledged that previous overestimations regarding the speed of the energy transition had distanced the brand from consumer needs.
Breaking Down The Numbers
Stellantis reported that $17.4 billion of the charge is attributed to realigning product plans with customer preferences and meeting new U.S. emission regulations. The company has also written off $3.4 billion related to canceled projects and is taking a $2.5 billion hit to resize its EV supply chain.
- Anticipated revenues for the second half of 2025 range from $92.2 to $94.6 billion.
- However, a net loss between $22.4 and $24.8 billion is expected.
Investor Reaction
The announcement has spooked investors, causing Stellantis’ stock to plunge by 23.69%, closing at $7.28 per share. To navigate this financial turbulence, the company plans to eliminate its annual dividend for 2026 and has authorized the issuance of up to $5.9 billion in bonds.
Positive Developments Amidst Challenges
In a silver lining, Stellantis reported an 11% increase in consolidated shipments during the second half, totaling 2.8 million units. Growth was noted in several markets, including North America, South America, Enlarged Europe, China, and the Middle East & Africa.
Quality Improvements and Future Products
Stellantis has also made strides in addressing quality issues, with a reported decrease of over 50% in reported vehicle problems in North America since early 2025. Looking ahead, the company is banking on new and updated models such as the Jeep Cherokee, Compass, and Recon, along with revamped versions of the Grand Cherokee and Grand Wagoneer to drive sales.
