Shares of Stellantis, a major global automaker, dropped 20% in European trading recently. This sharp decline follows the company’s announcement of a massive €22 billion ($26 billion) expense related to its shift towards electric and hybrid vehicles.
Right after the market opened, Stellantis shares listed in Milan fell by 18.7%. Other French car manufacturers felt the impact too. Valeo and Forvia each slipped by over 1.2%, while Renault lost about 2%.
In its latest update, Stellantis also projected a net loss for 2025. To manage this downturn, the company paused its dividend for 2026 and plans to raise up to €5 billion through hybrid bonds. Despite the challenges, Stellantis aims for moderate growth in 2026, targeting a mid-single-digit rise in net revenue and a slight increase in operating income margins.
Ceiling this situation, Stellantis CEO Antonio Filosa explained that the charges reflect the company’s miscalculation of the energy transition pace. He emphasized the need to align better with customer needs and deal with past operational issues.
Last year, Stellantis made significant investments to reshape its strategy. This included the largest investment in its U.S. history, amounting to $13 billion over four years. The company also plans to launch ten new car models, cancel unprofitable projects, and restructure its manufacturing processes. As a result, Stellantis will add 5,000 jobs in the U.S. market.
Over the past two years, Stellantis stocks have been on a downward path. The Italian shares fell nearly 25% last year and have dropped over 13% since the start of 2026.
Filosa has termed 2026 as the “year of execution” for Stellantis, indicating a focus on improving operational performance. With these strategies in place, Stellantis will fully release its 2025 earnings on February 26, giving a clearer picture of its financial health and future direction.
For broader context, the automotive industry is in a significant transition, with many companies grappling with how to shift sustainably from traditional gas-powered vehicles to electric models. A recent survey revealed that 54% of consumers remain concerned about the affordability and accessibility of these new technologies. Industry experts predict that the next few years will be crucial for automakers adapting to these changes.
For more detailed insights, you can check reports from trusted sources such as Reuters and CNBC.
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