Half-year loss exceeds 150 billion yuan, the world's fourth-largest automaker suddenly defaults, stock price plummets over 20%!

The world’s fourth-largest automaker, suddenly facing a crisis!

On February 6th, local time, the global fourth-largest automaker Stellantis Group (STLA.US) saw its US stock price plummet after the market opened, dropping over 26% intraday and closing down 23.79%. Previously, its stock price in the French market (STLAP.PA) plunged nearly 30%, ending the day down 25.24%.

Provision of over 180 billion yuan in massive transformation expenses

CEO: Overestimating the pace of energy transition

On February 6th, local time, Stellantis announced a provision of $26 billion (approximately €22.2 billion, 180.4 billion RMB) for massive transformation expenses.

Stellantis stated that business restructuring led to an estimated €22.2 billion expense in the second half of 2025, including about €6.5 billion in cash payments, expected to be completed within the next four years.

The €22.2 billion is mainly divided into three parts: €14.7 billion for product plan adjustments based on customer preferences and new US emission regulations, mainly reflecting a significant reduction in expectations for pure electric vehicles. €2.1 billion relates to scaling adjustments in the electric vehicle supply chain, involving rationalization measures for battery manufacturing capacity. The remaining €5.4 billion involves other operational changes, including €4.1 billion due to inflation and quality deterioration leading to contract warranty estimate adjustments, and €1.3 billion for other costs related to layoffs in expanded European regions.

Stellantis CEO Antonio Filosa stated in a release that the massive expenses are mainly due to the company overestimating the pace of energy transition, which led to product layouts diverging from actual consumer needs, purchasing power, and market willingness. It also reflects past operational execution issues, which the new management team is gradually addressing.

Filosa emphasized that Stellantis will continue to stay at the forefront of electric vehicle development, but the pace of electrification will be “market demand-driven rather than subjective planning,” and the company will no longer pursue aggressive transformation goals.

Public information shows that Stellantis Group was formed by the merger of the French PSA Group and the Italian-American Fiat Chrysler Group (FCA), and owns 14 brands including Jeep, Maserati, Peugeot, and Citroën. As the fourth-largest automaker globally, Stellantis achieved revenue of $204.91 billion in 2024, ranking 28th on the Fortune Global 500.

Pre-loss of over 155 billion yuan in the second half of last year

Electrification business shrinking, increasing investment in the US

Additionally, Stellantis’s operating performance has also taken a hit.

According to its preliminary data released early, it is estimated that losses in the second half of 2025 will reach €19 billion to €21 billion (approximately RMB 15.5 billion to RMB 17.2 billion).

In light of this loss, Stellantis has decided to suspend dividends for 2026 and plans to raise up to €5 billion through hybrid bond issuance to maintain its balance sheet. Stellantis expects an overall adjusted operating profit margin for 2026 to be in the low single digits.

Stellantis has canceled products that cannot achieve profitable scale, including the previously planned Ram 1500 electric pickup. The company states this is to meet customer demand and also due to changes in US regulatory frameworks.

Furthermore, Stellantis announced another strategic contraction: the company will sell its 49% stake in NextStar Energy, a Canadian battery company jointly owned with LG Energy Solution Korea, fully exiting the project.

Notably, while shrinking its electric vehicle business, Stellantis is increasing its investment in the US market. The company announced the launch of its largest-ever investment plan in the US, with a total investment of $13 billion (about RMB 9 billion) over the next four years, creating 5,000 new jobs domestically. This investment will focus on product development and capacity upgrades that meet US market demands, helping the company consolidate its market share.

Data shows that in the second half of 2025, Stellantis (STLA) increased its market share in the US to 7.9%, and maintained the overall second position in the expanded European market. The company’s overall sales in 2025 also recovered to positive growth, providing confidence for this strategic adjustment.

(Source: Daily Economic News)