The car manufacturer Stellantis $STLAM (-23,63 %) is pulling the emergency brake on electric cars in response to high costs and a lack of demand. Investors are shocked by the news.
I'm really not a fan of automotive shares, but if they don't cut the already heavily reduced dividend even further, they are currently offering a dividend yield of over 11%. But if they do cut the dividend completely, as suggested, then good night. A reason to take a closer look at the company?
Stellantis is significantly slowing down its electrical ambitions and writing off around 22 billion euros. The Group announced this on Friday. The background to this is a change of course due to high costs and weak sales figures for electric vehicles.
Almost 15 billion of this will go towards the reversal of electric cars on the important US market. As a result of the electric car subsidy canceled by US President Donald Trump and changes to emissions regulations, the company is eliminating Stellantis models and will probably earn less money with the technical platforms in future.
In addition, cash payments of around 6.5 billion euros are expected to be made over the next four years. The management therefore does not intend to pay a dividend to shareholders this year. The company also intends to raise fresh money of up to five billion euros by issuing new bonds.
The Stellantis share, which is traded on the Paris stock exchange, fell by almost 30 percent at its peak on Friday. This is the biggest single-day slump in the history of the car company, which was founded in 2021. The market capitalization was thus at times less than 17 billion euros.
Stellantis CEO Antonio Filosa explained: "The charges announced today largely reflect the costs that have arisen from overestimating the pace of the energy transition and which have distanced us from the real needs, opportunities and desires of many car buyers." They also showed the effects of "previous poor operational implementation", the consequences of which should now be gradually remedied.
Stellantis is now talking about a "reset" ahead of the presentation of its new strategic plan in May. For the second half of 2025, the Group is expecting a preliminary loss of 19 to 21 billion euros. Turnover is expected to be between 78 and 80 billion euros, in line with analysts' expectations.
End of ambitious battery project
In terms of adjusted operating profit, management expects a loss of 1.2 to 1.5 billion euros and cash outflows of 1.4 to 1.6 billion euros. Stellantis plans to publish its full annual figures on February 26.
At the same time, Stellantis announced the end of its joint venture with LG Energy in Canada on Friday. Nextstar was regarded as a flagship project for the production of lithium batteries, which was driven forward by former Group CEO Carlos Tavares. So far, more than five billion Canadian dollars (around 3.4 billion euros) have been invested in the site. Stellantis will now sell its 49 percent stake.
USB analyst Patrick Hummel described the 22 billion euro write-down as "negative" for the moment. But: "It could be the clarifying event we have been waiting for." He emphasized that the decisive factor is that the 6.5 billion euros in cash payments will be spread over four years.
"From a balance sheet perspective, annual cash outflows of EUR 1.6 billion can be absorbed," writes Hummel. It is true that the write-downs are significantly higher than the five to ten billion euros that were generally expected. "But it is more important that the cash portion is roughly in line with expectations."
Group CEO Filosa had den Job im vergangenen Sommer übernommenafter the long-standing CEO Carlos Tavares stepped down at the end of 2024. There were reportedly strategic differences between Tavares, who was considered a tough reorganizer, and the Board of Directors of Stellantis. In the meantime, Chairman of the Board of Directors John Elkann managed the 14-brand group before Filosa took over.
Group CEO sees signs of improvement
Tavares had announced in 2022 that the automotive group would be fully electrified in Europe by 2030, but had to gradually abandon this line. In the USA Stellantis, which includes brands such as Jeep and Dodge, was to grow primarily electrically.
In reality, however, the Stellantis brands in North America continued to lose market share and sales. Filosa, who lives in America himself, is now trying to turn the business around in this important market by focusing more on large classic combustion engines such as the Ram 1500 pick-up and the Jeep Cherokee, which were all discontinued under Tavares.
However, according to the press release, Filosa is already seeing signs of improvement: the necessary changes to the product range have already met with a positive response from customers. "In 2026, we will continue to focus on closing previous gaps in implementation in order to give further impetus to these first signs of renewed growth," said the Italian.
In the second half of 2025, Stellantis achieved consolidated sales of 2.8 million cars, an increase of 277,000 units or eleven percent compared to the previous year. Growth was led by North America, where deliveries rose by 39 percent.
Analyst Hummel also sees reason for hope for the current year: "The high depreciation and amortization in the second half of 2025 could have a positive effect of over one billion euros on the adjusted operating result due to lower future depreciation and amortization."
Source: Text (excerpts) and picture Handelsblatt from 06.02.2026
