Stellantis’ scrapped plans for an electric heavy-duty Ram truck has sparked a $25 million legal fight between two major auto parts suppliers.

Valeo North America Inc. and its French and German subsidiaries are suing American Axle & Manufacturing Inc. for its alleged refusal to cover sunk costs for an EV program sourced and eventually canceled by Stellantis, according to the lawsuit, filed in January in Oakland County Circuit Court in Michigan.

Valeo, whose North American base is in suburban Detroit, spent tens of millions of dollars to develop electric motors and inverters for American Axle e-beams that were to go into model year 2027 heavy-duty Ram trucks, Valeo said in the lawsuit. Negotiations between the two suppliers started in 2022, but the program was terminated a year ago.

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“From the outset, starting from sourcing and nomination, through AAM’s termination of the program in April 2024, Valeo worked diligently in coordination with AAM to bring the program to fruition,” according to the lawsuit filed by Honigman attorney Andrew Pauwels on behalf of Valeo.

American Axle attorneys filed a motion to dismiss the case last month, arguing that the suppliers never had an enforceable contract and therefore no breach of contract occurred.

Detroit-based American Axle, through a spokesman and attorneys, declined to comment. Pauwels and Valeo did not respond to requests for comment.

The case is just the latest electrification-related dispute to boil over in the supply chain. Many auto suppliers, from small family-owned plants to the world’s largest parts makers, are still reeling from the EV volume bust.

Just as automakers were under immense pressure a couple of years ago to lead the EV charge, suppliers were compelled to win contracts for those programs. EVs were seen as the key to long-term sustainable business, but when demand unexpectedly slowed, many suppliers were left holding the bag.

That resulted in a host of monetary disputes among parts manufacturers and automakers. Most, but not all, have remained out of the public eye. Bosch, the world’s largest auto supplier, sued startup Rivian last year after the automaker axed its e-motor supply deal, though the case has since been settled out of court.

In early 2023, American Axle entered an “integrated, comprehensive agreement” calling for Valeo to design and manufacture e-motors, inverters and software modules, the lawsuit says. After 13 months, however, American Axle canceled the program and allegedly refused to reimburse Valeo.

Stellantis’ plan to electrify a heavy-duty truck has not been previously reported.

The lawsuit does not specify what type of HD truck it had targeted to be battery-powered. Its gas and diesel heavy-duty offerings include the 2500 and 3500 pickups and chassis cab, marketed for commercial use.

Stellantis declined to comment.

American Axle is Ram’s “strategic driveline supplier through 2030,” securing contracts to supply its heavy-duty pickup trucks with axles and driveshafts, according to a 2021 news release from the supplier. The business exceeds “several billion dollars” over the lifetime of the award.

The Valeo lawsuit highlights a remarkable reversal by Stellantis.

Three years ago, the automaker was confident enough in EVs to source parts for an electric heavy-duty vehicle — a segment that even at the time was seen as difficult to electrify. Now, Stellantis has hit the brakes on electric light-duty pickups, too, delaying production of the all-electric Ram REV until next year and pulling forward the hybrid Ramcharger at Sterling Heights Assembly Plant.

Competitors Ford Motor Co. and General Motors are also nursing an electric pickup headache turned nightmare for some suppliers. Volumes of Ford’s F-150 Lightning have fallen dramatically below projections, while GM has twice delayed the launch of its Orion Assembly plant dedicated to electric Silverados and Sierras, due largely to lack of demand.

It has left plenty of suppliers with stranded capital and fears about return on investment.

The Valeo lawsuit against American Axle, assigned to Judge Michael Warren, would culminate in a trial by jury next year if the dispute is not settled.