No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Shares in Stellantis crashed on Friday, after the European car maker announced it would take a 22bn charge as it scales back its expansion into electric vehicles.
The owner of Fiat, Vauxhall, Jeep and Peugeot, among others, said that the 22.2bn charge would push it into the red, prompting it to cancel dividend payments in the current year.
Stellantis expects second-half net revenues to come in between 78bn and 80bn. That will be an improvement on the first half, when revenues slid 13% to 74.8bn. But the second-half net loss is now forecast to come in between 19bn and 21bn.
As at 0900 GMT, the Milan-listed stock has tumbled 21%.
However, Stellantis insisted the changes were necessary after over-estimating the pace of energy transition. It said that while it it would continue to be at the forefront of EV development, that would now be "governed by demand, rather than command".
Recently-installed chief executive Antonio Filosa continued: "The reset we have announced today is part of a decisive process we started in 2025, to once again make our customers and their preferences our guiding star.
"The charges announced today largely reflect the cost of over-estimating the pace of the energy transition that distanced us from many car buyers' real world needs, means and desires.
"They also reflect the impact of previous poor operational execution, the effects of which are being progressively addressed by our new team."
Prior to taking on the top job in June, Italian-born Filosa - who joined Fiat Group in 1999 as a trainee - headed up Stellantis operations in North America.
Car makers enthusiastically embraced the EV market, encouraged by generally widespread governmental support. However, in recent years they have struggled with the level of investment involved, changing climate regulations and slower-than-expected consumer uptake.
European demand remains buoyant. But in the US, sales have slumped after the current administration threw its weight behind the oil industry and withdrew tax credits for EVs.
The 22bn charge includes 2.1bn to resize Stellantis' EV supply chain and 14.7bn to re-align product plans with both customer demand and new emission regulations in the US. Products that are not expected to achieve profitable scale will be cancelled, including the planned Ram 1500 battery EV.
Stellantis has also agreed to sell its 49% stake in Canadian battery firm NextStar Energy to South Korea's LG Energy Solution, its founding joint venture partner, as part of the reset.
The Amsterdam-based firm is due to publish results for the year to 31 December 2025 on 26 February.