Stellantis (STLA) N.V. is taking a hit in shift away from EVs
European automaker Stellantis N.V. (STLA) said that it is taking a hit of €22.2 billion (about USD $26 billion) as it shifts its business away from electric vehicles as part of a larger 'reset' of its business.
The company, which includes brands such as Chrysler, Jeep and Ram, began shifting away from EVs last year as sales began to decline, particularly in the US after the Trump administration ended federal tax credits that had led to lower prices on electric vehicles.
Stellantis is shifting to larger, gas-powered vehicles in North America and will also focus on hybrid models.
The reset of its business will lead to the "cancellation of products that will be unable to achieve profitable scale" the company said. This includes ending the previously announced production of the Ram 1500 BEV, it's latest EV pickup truck model.
Stellantis said that it was "recognizing both the need to align with customer demand and the changes to US regulatory frameworks."
"The reset we have announced today is part of the decisive process we started in 2025, to once again make our customers and their preferences our guiding star," Stellantis CEO Antonio Filosa said in a statement.
"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."
Filosa, who was named CEO of the company in June, added that the changes being undertaken "also reflect the impact of previous poor operational execution, the effects of which are being progressively addressed by our new Team.”
Stellantis said the charges from its business reset included €14.7 billion (about USD $17.5 billion) that is covering the cost of ending the work it had already started on the electric vehicles it was developing for the United States, as well as the lower sales it experienced from its most recently introduced EVs.
It will additionally make cash payments of approximately €5.8 billion (about USD $6.9 billion) over the next four years, relating to both cancelled products as well as other ongoing electric products "whose volumes are now expected to be considerably below prior projections."
The company is also setting aside €2.1 billion (about USD $2.5 billion) to cover the cost of scaling back its battery production plans.
A broader shift away from EVs
On Tuesday, Bloomberg reported that Stellantis is looking to exit the battery partnership that it formed with Samsung in the United States. According to Bloomberg, no final decision on the potential divestment has been made, but that ending the partnership "could be costly for Stellantis and a lengthy process."
Stellantis had also been building a battery plant in Windsor, Ontario, but announced on Friday that it had sold its stake to LG Energy Solutions, one of its partners, for just $100.
The automaker still plans to buy EV batteries from the factory.
As part of a re-organizational initiative, Stellantis said that it is establishing a "re-empowerment of regional teams, freeing them to make decisions based on their direct knowledge of the preferences of the customers they serve."
The company's stock has sunk 32.3% to start the year.
Stellantis isn't the only automaker that has begun shifting away from EV production as regulatory headwinds increase.
Ford Motor Company (F) announced in December that it will be taking about a $19.5 billion writedown in what was a dramatic shift away from its unprofitable electric vehicle business.
The automaker said that the massive special item charges would mostly occur in the fourth quarter, with the remainder in 2026 and 2027. The charges are related to killing off production of its electric F-150 truck as it refocuses on hybrid and extended range EV vehicles.
Ford had long been struggling to turn its EV fleet into a profitable business, losing $13 billion since 2023.
But not too long ago, the automaker had ambitious plans for its electric vehicles, saying in 2021 that it would be ramping up its investments in EVs to $30 billion by 2025.
Of course, these plans were laid out during the Biden administration, which passed the federal tax credits in order to help boost sales of EVs in an effort to combat climate change.
General Motors Company (GM) also took an $8.8 billion write down last year as it shifted production away from electric vehicles.