The parent company of Jeep, Chrysler, Dodge, and Ram just dropped one of the biggest financial bombshells in auto industry history. Stellantis announced a $26 billion charge tied to scaling back its electric vehicle ambitions after badly overestimating how quickly buyers would make the switch. The fallout has been swift, and investors aren’t happy.
- The charge of $26.2 billion is the largest yet by any global automaker in connection with EV write-downs.
- Stellantis stock tumbled as much as 25% on the day of the announcement, closing down nearly 24%.
- CEO Antonio Filosa confirmed a plan to invest $13 billion in the United States, including a return to popular gasoline-powered models.
What Happened and Why It’s So Expensive
CEO Antonio Filosa put it bluntly, saying the charges “largely reflect the cost of over-estimating the pace of the energy transition.” Under former CEO Carlos Tavares, the automaker had set ambitious EV goals, aiming for EVs to make up 100% of European sales and 50% of U.S. sales by 2030. That bet didn’t pay off.
The bulk of the writedown, around $17.3 billion, relates to realigning product plans with customer preferences and new US emissions regulations. This includes $3.4 billion in write-offs for cancelled products and $7.1 billion in platform impairments due to sharply lower volume and profitability expectations. An additional $2.5 billion stems from resizing the EV supply chain, including rationalizing battery manufacturing capacity.
The company also booked $6.4 billion in other charges, with $4.8 billion tied to increased warranty provisions following quality issues and $1.5 billion for restructuring costs related to workforce reductions in Europe. EVs weren’t the only problem, either. Poor product quality and cost-cutting under the previous leadership piled on.
How Stellantis Compares to Ford and GM
Stellantis isn’t alone in eating the cost of misreading the EV market, but the bill is by far the largest. GM took $7.6 billion in charges for 2025, Ford announced $19.5 billion in EV write-downs, and Volkswagen Group took a $6 billion hit mostly from scaling back its EV plans.
As the auto industry pivots from earlier EV growth plans to slowing demand, global automakers have recorded a total of around $55 billion in losses, according to Reuters. Haig Partners managing director John Murphy called the EV reversal “the single biggest capital allocation mistake in the history of the automotive industry.”
The demand shortfall for battery-powered models came from factors including high prices, range anxiety, and government pullbacks on incentives and emissions regulations, particularly in the United States. Whether you’re looking at a new SUV for sale at a dealership or browsing online, it’s clear that most shoppers are still gravitating toward gas and hybrid options.
Stellantis Pivots Back to Gas and V8 Power
New CEO Filosa is charting a very different course. Stellantis is pinning its hopes on a return to V-8 engines for popular products like Ram pickups and Dodge muscle cars, while canceling plans for an all-electric Ram pickup, killing plug-in hybrid Jeep and Chrysler models, and reducing EV production.
And early demand for these gas-powered products is strong. Filosa cited strong demand for the Ram 1500 pickup with the Hemi V8 engine, which saw “10,000 orders” on day one and 60,000 to date. The new Dodge Charger ICE is already “sold out in orders for our model year 2026 production.”
Stellantis saw a 43 percent rise in North America shipments to dealers in the fourth quarter of 2025, reaching 422,000 vehicles. Those numbers suggest the pivot toward what buyers actually want is already starting to work.
To shore up its finances, Stellantis has suspended its dividend for 2026 and plans to raise up to $5.9 billion by issuing hybrid bonds. The company also said it would sell its 49 percent stake in a Canadian gigafactory battery site to its partner LG Energy Solution.
Can Stellantis Actually Recover?
The writedown is now actually larger than the company’s market value, which tells you just how badly the stock has been punished. The stock has lost roughly 80 percent of its value since March 2024.
Still, not everyone is writing Stellantis off. UBS analysts said the negative share-price reaction was expected given the “magnitude” of the charges and soft 2026 guidance, but added that new management’s “decisive” clean-up and solid regional market fundamentals leave the stock attractive as a potential U.S. “comeback” play.
Stellantis is forecasting a mid-single-digit increase in net revenue for 2026 and projects positive industrial free cash flows in 2027. The company plans to provide full details of its new strategy at a May investor day in Auburn Hills.
The takeaway for the whole auto industry is pretty clear. Customers, not government mandates, are going to set the pace for electrification. Stellantis said reducing its EV focus would offer clients “freedom of choice,” including hybrid and internal combustion engine vehicles for customers whose needs make those the right fit. That sounds a lot like listening to the market instead of trying to force it.