Jeep manufacturer Stellantis reveals a major overhaul of its operations along with significant financial write-downs. Stock prices plummet.

Stellantis Announces Major Business Overhaul Amid EV Setbacks

Visitors navigate a Jeep Rubicon through a challenging course at the Jeep display during the 2026 Detroit Auto Show in Michigan. (Bill Pugliano/Getty Images)

Massive Financial Write-Downs After EV Investments

Stellantis, the parent company of Jeep and Chrysler, has revealed a significant restructuring of its operations following disappointing returns on its substantial electric vehicle investments.

On Friday, the automaker disclosed it will incur charges exceeding $26 billion, primarily due to asset write-downs, canceled electric vehicle projects, and costs associated with scaling back its EV supply chain.

Stock Plunge and Industry-Wide Shifts

The news triggered a sharp decline in Stellantis (STLA) shares, which dropped over 28% in early trading on Friday.

This strategic pivot mirrors recent costly adjustments made by Ford and General Motors, as the American auto industry reevaluates its approach to electric vehicles.

Regulatory Changes and Market Realities

Many U.S. automakers ramped up their EV initiatives in response to strict environmental policies introduced by the Biden administration and anticipated bans on gasoline vehicles in several states. However, the Trump administration has since relaxed these emissions standards, reduced financial incentives for EVs, and is contesting states' rights to enforce stricter regulations.

Leadership Perspective and Future Direction

Stellantis CEO Antonio Filosa attributed the €22.2 billion ($26.2 billion) in charges to an overestimation of how quickly the energy transition would occur. The company emphasized in a statement that the move toward electric vehicles should be driven by consumer demand, not regulatory mandates.

“Stellantis remains dedicated to offering customers a range of choices, including hybrids and advanced internal combustion vehicles, to suit diverse needs and lifestyles,” the company stated.

Adjusting to Shifting EV Demand

Reflecting a more cautious outlook for electric vehicle sales, Stellantis noted that €14.7 billion of the charges are tied to aligning its product lineup with evolving customer preferences and new U.S. emissions rules.

Listed on exchanges in New York, Milan, and Paris, Stellantis is set to release its 2025 financial results on February 26. The company has already reported a net loss for the year and announced it will not issue a dividend for 2026.

European Policy Changes and Consumer Hesitancy

Recent regulatory developments in Europe have also cast doubt on the pace of the shift to cleaner vehicles. The European Union had aimed to prohibit new combustion engine vehicle sales by 2035, but after lobbying from automakers, the rule was softened to cover only 90% of new cars. This adjustment allows the remaining 10% to still be plug-in hybrids or traditional combustion vehicles.

Demand for electric vehicles in Europe has lagged behind automakers’ forecasts, partly due to inconsistent charging infrastructure across the continent.

Environmental Impact: Comparing Vehicle Life Cycles

Assessing a vehicle's total emissions is complex, as it requires considering its entire life cycle, including manufacturing processes.

• Production emissions for gas, hybrid, and electric vehicles are similar until battery manufacturing is factored in.
• Electric vehicles require large batteries made from materials that involve intensive mining, making their production about 40% more polluting than that of hybrids or gasoline cars, according to some studies.
• However, while gas-powered cars are the least polluting to manufacture, they produce the most emissions over their lifetime due to exhaust pollution. In contrast, EVs, though more carbon-intensive to build, generate about 40% less carbon emissions over their operational lifespan compared to gasoline vehicles.

Reporting by Chris Isidore, Lianne Kolirin, Ella Nilsen, and Lou Robinson.