Stellantis shares suffered a historic collapse, plunging more than 25% in a single session on Friday, marking its worst trading day since the 2021 merger of Fiat Chrysler and PSA Group. The crash was triggered by the company's disclosure of a massive €22.2 billion ($26.5 billion) impairment charge tied to a full reset of its electric vehicle (EV) business strategy.
The colossal charge, which alone exceeds Stellantis's entire market capitalization, sent shockwaves through the European auto sector. By 10:30 a.m. local time in Milan, Stellantis stock was down 22.9%, while its New York-listed shares crashed 20.8% in premarket trading. The fallout extended to peers, with Renault dropping 2%, and suppliers Valeo and Forvia both losing over 1.2%.
CEO Antonio Filosa stated the writedown "largely reflect[s] the cost of over-estimating the pace of the energy transition that distanced us from many car buyers’ real-world needs, means and desires." He attributed part of the failure to poor execution by previous leadership, issues now being "progressively addressed by our new Team."
In response to the financial blow, Stellantis is taking drastic measures: suspending its 2026 dividend entirely, attempting to raise up to €5 billion through hybrid bonds to stabilize its balance sheet, and confirming it expects a net loss for 2025. The company is also exiting a key Canadian battery joint venture, NextStar Energy, with partner LG Energy Solution taking full control of the facility.
The €22.2 billion reset includes €14.7 billion for scrapping failed product plans and adjusting to U.S. emissions regulations, plus €2.1 billion for resizing an overbuilt EV supply chain. This scale of writedown far surpasses those of its Detroit rivals; Ford and GM recently recorded charges of $19.5 billion and $7.1 billion, respectively, for their own EV missteps.
Analysts point to deeper issues plaguing Stellantis beyond a failed EV strategy. Under former CEO Carlos Tavares, the company pursued a "margin over volume" approach, pushing Jeep and Ram truck prices to record highs (often exceeding $70,000) and alienating its core middle-class buyer base. Compounding this, significant inventory bloat—with Jeep's supply sitting at a staggering 90-day supply at the end of 2025, nearly double the industry average—forces the company to use "massive incentives" and fire-sale pricing, destroying brand equity and profit margins.
Unlike GM and Ford, which have successfully pivoted to "hybrid-first" strategies resonating with U.S. buyers, Stellantis is only now frantically re-introducing gas-powered models. The company also lacks a high-margin software-focused business unit like Ford's "Pro" division.
This crisis comes as Stellantis prepares to unveil a new long-term plan at its Capital Markets Day in May. The stock has been in a prolonged decline, with Italian shares falling 25% in 2025 and 40.5% the year before. So far in 2026, shares are down another 13%. Filosa called 2026 the "year of execution," but the immediate challenge appears to be survival.
