Stellantis, the European carmaker behind Vauxhall, Citroën and Fiat, has taken a €22bn hit after admitting it overestimated the pace of electric vehicle adoption and reversing its push towards an all-electric future.
The Franco-Italian automotive group said the strategic U-turn would result in €22bn of future losses, write-offs and cancellation costs linked to electric models that will no longer be brought to market. Around €6.5bn of that charge will involve cash leaving the business.
The announcement triggered a sharp market reaction, with Stellantis shares briefly suspended before plunging more than 20 per cent once trading resumed. By mid-morning in London, the stock was down 21 per cent at €6.40, its lowest level in five years. The company also confirmed it would scrap its dividend.
Stellantis said its future strategy would now be driven by “demand, not command”, signalling a clear shift away from regulatory-led electrification targets towards customer preferences. The move also aligns with a broader change in tone in the US market under President Donald Trump, where carmakers are increasingly pivoting back to internal combustion engines.
The group, formed from the merger of Peugeot-Citroën, Fiat-Chrysler and Opel-Vauxhall, has faced internal tensions over strategy in recent years. Those divisions culminated in the departure of former chief executive Carlos Tavares 15 months ago. His successor, Antonio Filosa, has now delivered a blunt assessment of the previous approach.
Announcing the charges, Filosa said Stellantis would prioritise new petrol and hybrid models after misjudging the speed of the energy transition and losing touch with customers’ real-world needs.
“The charges announced today largely reflect the cost of over-estimating the pace of the energy transition,” Filosa said. “That miscalculation distanced us from many car buyers’ needs, means and preferences, and was compounded by poor operational execution.”
As part of the reset, Stellantis will invest $13bn over the next four years to expand production in the United States, creating more than 5,000 jobs and increasing capacity utilisation at its American plants. Iconic petrol models will make a comeback, including the HEMI V8 engine for the Ram 1500 pick-up and the return of the Jeep Cherokee, a gasoline bestseller that was dropped three years ago.
The company has also cancelled the Ram 1500 REV, an all-electric pick-up that had been due to enter production later this year, citing the need to align product plans with customer demand and changes in US regulation.
In a pointed critique of its former management structure, Stellantis said it would re-empower regional teams, giving them greater autonomy to make decisions based on local market knowledge rather than centralised mandates.
Although its UK manufacturing footprint has shrunk significantly, Stellantis remains the owner of the Vauxhall brand, with limited electric van production continuing at Ellesmere Port.
The move mirrors similar retreats by Ford and General Motors and underscores a broader reassessment by western carmakers as EV demand softens and political support for aggressive electrification weakens. Stellantis will publish its full-year 2025 results on 26 February.
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Vauxhall owner takes €22bn hit after electric car u-turn