Stellantis Takes a €22 Billion Hit After Overestimating Electric Vehicle Sales
In a significant write-down, Stellantis has admitted to overestimating the pace of electric vehicle (EV) adoption and is now facing a €22 billion charge. The European-based carmaker, which owns marques including Peugeot, Fiat, Jeep, and Citroën, said that the move was part of a reset of its business, following "poor operational execution".
The news sent shares plummeting, with a 25% drop in Milan on Friday, wiping nearly €6 billion off its market value. This slump has also led to a near-half-year low since 2021. Stellantis said it would not pay dividends to shareholders next year.
Stellantis took this hit after acknowledging that its battery electric vehicles (BEVs) were not gaining traction in the US, where demand for EVs collapsed following the Trump administration's withdrawal of consumer tax credits and plans to remove regulations on car emissions. The company had previously set ambitious targets, including 100% of sales in Europe and 50% in the US, to be made up of BEVs by the end of the decade.
However, Stellantis now acknowledges that its pace was too fast for market demand. It has cancelled several projects, including an electric truck it claimed would "push boundaries". The company is instead refocusing on aligning with customer demand and adapting to changes in US regulatory frameworks.
This latest move is not without precedent, as rivals Ford and General Motors have also faced similar challenges in their EV ambitions. Stellantis will continue to develop its EV offerings but now recognizes that the pace of adoption must be "governed by demand rather than command".
Analysts predict that further restructuring may be necessary, including factory closures and capacity reductions. While this latest announcement does not include factory closures, it is believed that some form of cost-cutting is still on the cards.
As Stellantis sets out to restructure its business, investors will be watching closely as the company prepares for a capital markets day in May to present an update on its long-term strategy. With the success of companies like China's BYD suggesting there are willing customers for EVs, it remains to be seen whether Stellantis can adapt and succeed in this rapidly changing market.
In a significant write-down, Stellantis has admitted to overestimating the pace of electric vehicle (EV) adoption and is now facing a €22 billion charge. The European-based carmaker, which owns marques including Peugeot, Fiat, Jeep, and Citroën, said that the move was part of a reset of its business, following "poor operational execution".
The news sent shares plummeting, with a 25% drop in Milan on Friday, wiping nearly €6 billion off its market value. This slump has also led to a near-half-year low since 2021. Stellantis said it would not pay dividends to shareholders next year.
Stellantis took this hit after acknowledging that its battery electric vehicles (BEVs) were not gaining traction in the US, where demand for EVs collapsed following the Trump administration's withdrawal of consumer tax credits and plans to remove regulations on car emissions. The company had previously set ambitious targets, including 100% of sales in Europe and 50% in the US, to be made up of BEVs by the end of the decade.
However, Stellantis now acknowledges that its pace was too fast for market demand. It has cancelled several projects, including an electric truck it claimed would "push boundaries". The company is instead refocusing on aligning with customer demand and adapting to changes in US regulatory frameworks.
This latest move is not without precedent, as rivals Ford and General Motors have also faced similar challenges in their EV ambitions. Stellantis will continue to develop its EV offerings but now recognizes that the pace of adoption must be "governed by demand rather than command".
Analysts predict that further restructuring may be necessary, including factory closures and capacity reductions. While this latest announcement does not include factory closures, it is believed that some form of cost-cutting is still on the cards.
As Stellantis sets out to restructure its business, investors will be watching closely as the company prepares for a capital markets day in May to present an update on its long-term strategy. With the success of companies like China's BYD suggesting there are willing customers for EVs, it remains to be seen whether Stellantis can adapt and succeed in this rapidly changing market.
. The European-based carmaker's overestimation of EV adoption pace, particularly in the US market, was likely driven by a combination of factors, including unrealistic expectations and poor operational execution 
.
. The news serves as a cautionary tale for companies looking to rapidly transition their portfolios, highlighting the importance of aligning with market demand rather than pushing an unrealistic agenda 
.
. With several rivals, including Ford and General Motors, already navigating similar challenges, the competition is likely to remain fierce 
. As the EV market continues to evolve, it remains to be seen whether Stellantis can successfully restructure its business and emerge as a leader in this rapidly changing landscape 
.
I feel bad for Stellantis, they really overestimated the demand for electric vehicles. I'm not surprised though, I mean, even Elon Musk was saying that EVs aren't going to take over the world anytime soon 
. But seriously, this is a big blow and it's going to be interesting to see how they restructure their business. Factory closures or capacity reductions are definitely on the cards 
. Maybe it's time to rethink our expectations and just focus on making great products that people want to buy? 
just heard about stellantis' €22 billion hit... i mean who wouldn't overestimate electric vehicle sales? 
but seriously, this is huge news and a major wake-up call for the car industry. it's clear that demand wasn't as high as they thought. 
and now they're canceling projects and refocusing on customer demand... hopefully that means they'll be more realistic about their targets in the future 
what's most important is adapting to changes in market demand and regulatory frameworks.
they got hit so hard because of their own expectations 
but like, at least they're being honest about it 
the us market is super tricky rn, and i get why they underestimated demand 
. I mean, €22 billion is a lot of cash just because some company overestimated demand? It's like they thought everyone would just magically switch to EVs overnight. Newsflash: people aren't that interested in electric cars... yet 
.
, but I'm starting to think we're moving too fast here. I mean, Stellantis just took a €22 billion hit because they overestimated EV sales? That's like trying to guess how many ice creams you'll sell at the fairground on a hot summer day. You can't force demand, mate! 
They should've taken a page out of Tesla's book and been more realistic from the start.
It's like they thought everyone would just magically switch to EVs overnight. Newsflash: we're not made of batteries and wires! 
, I don't get why they're not just releasing a 4K video on YouTube yet... 
. Anyway, it's all about adapting to the market demand and not trying too hard, you know?
. newsflash stellantis: you can't just make stuff and expect people to buy it if there aren't any buyers... 