Industry wake-up call: Stellantis (STLA.US) can't hold on either, announcing a 22 billion write-down, signaling a rapid deceleration in electrification.

Due to high costs and weak sales of electric vehicles, Stellantis NV (STLA.US) will undergo a comprehensive restructuring of its business, resulting in a charge of approximately 22 billion euros (around 26 billion US dollars). This write-down includes around 6.5 billion euros in cash outlays, similar to actions taken by Ford Motor Company (F.US), General Motors Company (GM.US), and other car manufacturers. The company stated on Friday that this decision is part of its new strategic plan set to be released in May. The above-mentioned costs will be included in the second half of 2025, off the profit sheet. This significant expenditure is mainly due to management acknowledging that they had previously overestimated the speed of the global transition to electric vehicles, leading to a serious disconnect between the company's strategy and the actual market demand, consumer purchasing power, and infrastructure status. Stellantis CEO Antonio Filosa admitted that the company must engage in this financial "surgery" to correct its past aggressive expansion in electrification to address the inventory backlog and profit erosion resulting from the current slowdown in demand for pure electric vehicles. This reset plan will have a profound impact on the group's performance. Stellantis anticipates that, as a result of this charge, they will record a net loss of 19 to 21 billion euros in the second half of 2025, leading the company to decide to suspend shareholder dividends for 2026. While a large portion of the total 22 billion euros charge includes non-cash impairments, around 6.5 billion euros in cash outlays will still be incurred over the next four years. Furthermore, to alleviate financial pressure and streamline the supply chain, the group has decided to transfer its entire 49% stake in the Canadian NextStar Energy battery joint venture project to partner LG Energy and rationalize battery production planning on a global scale, involving around 2.1 billion euros. Additionally, the statement also includes the termination of the joint venture with Korean battery manufacturer LG Energy in Canada. In 2022, the automaker announced plans to jointly invest over 5 billion Canadian dollars (around 3.7 billion US dollars) with LG Energy to build Canada's first large-scale electric vehicle battery manufacturing plant in Windsor, Ontario. On the strategic transformation front, Stellantis is accelerating its shift from an "all-electric" vision to a "multi-energy balance" strategy. The company has made it clear that it will no longer blindly pursue a single electrification target and will prioritize profitability and consumer choice, which means that some low-profit or unscalable pure electric projects have been canceled or indefinitely postponed. In their place, the group will increase investment in internal combustion engine technology and hybrid power products, even reintroducing traditional high-power engines in key models. Since taking over as CEO in June last year, Antonio Filosa has been leading a thorough reform of this car manufacturer with 14 brands to regain market share, while reducing the costs of electric vehicle strategies and lowering the tariffs imposed by the US. Stellantis has ceased the sale of purely electric models in the US, including the RAM 1500 pickup, and has postponed Alfa Romeo's electric car project in Europe. Stellantis is not alone in accounting for adjustment costs due to lower-than-expected demand for electric vehicles. In December last year, Ford announced a charge of 19.5 billion US dollars for the restructuring of its electric vehicle business; competitor General Motors Company's write-down has expanded to 7.6 billion US dollars; Porsche AG revised its performance expectations downwards four times last year as it adjusts its electric vehicle strategy. The company also simultaneously disclosed its operating performance for the second half of 2025: both net revenue and industrial free cash flow improved compared to the first half, with overall performance meeting market expectations. However, due to one-time factors such as contract warranty estimate adjustments and some special items, actual performance still exhibits some volatility. Specifically, the operating profit margin in the second half of the year is recorded below the previously guided low single-digit range (1%-3%).