Stellantis CEO Antonio Filosa stated that the company will continue to operate as a unified entity, asserting that an integrated structure provides greater strength. This declaration was made during a media call on Friday, amidst calls from some market participants to spin off brands or split the company due to its underperformance.
The Italian CEO told reporters, "Stellantis is a robust global automaker with deeply rooted regional operations, which is our pride. Integration aligns with the company's fundamental interests, and we plan to maintain our unified operations for many years to come." His comments followed the company's announcement of a major business reorganization, which includes a €22 billion (approximately $26 billion) impairment charge.
The restructuring measures involve scaling back electrification plans and reintroducing V8 engines in vehicles for the U.S. market. Filosa described these actions as a "significant strategic reshaping" of the business model, with the core objective of recentering consumer preferences in global and regional operations. He acknowledged substantial market share losses in recent years and stated that the primary mission now is to achieve business growth.
Following the announcements, Stellantis shares plummeted more than 20% in both Milan and New York. The automaker's portfolio includes 14 brands, such as Jeep, Ram, and Chrysler in the U.S., as well as Fiat and Alfa Romeo, which have faced challenges in their home market. When questioned about potential adjustments to regional focus or brand consolidation, Filosa did not explicitly rule out such possibilities during Friday's interview.
"We will manage our brands with precision, focusing on aligning products and technologies with consumer needs and demands. The consumer is now at the heart of our strategic reset; this is our fundamental mission," Filosa said. He added that further details regarding the company's future plans will be disclosed at an Investor Day scheduled for May 21.
According to two dealers who attended meetings, Stellantis executives, just days before the public announcement, met with U.S. franchise dealers at the National Automobile Dealers Association annual convention. They communicated plans to drive sales growth across all the company's U.S. brands.
**Details of the $26 Billion Impairment** The €22 billion impairment charge is largely attributed to product plan adjustments, amounting to €14.7 billion (approximately $17.3 billion), aimed at aligning product development with U.S. consumer preferences and new emissions regulations. The remaining charges include €2.1 billion (about $2.5 billion) related to scaling down the electric vehicle supply chain, €4.1 billion (approximately $4.8 billion) for warranty costs, and €1.3 billion (around $1.5 billion) for restructuring European operations.
Concurrently, the company announced the cancellation of its 2026 dividend and plans to issue €5 billion (about $5.9 billion) in non-convertible hybrid bonds.
This move to impair EV-related assets mirrors similar actions and scaled-back EV plans recently undertaken by General Motors and Ford, which recorded charges of $19.5 billion and $7.6 billion, respectively. However, the impact on Ford and GM's stock prices was less severe. Stellantis's sharp decline is also attributed to its own longstanding strategic issues and the issuance of weaker-than-expected financial guidance.
Stellantis anticipates a net loss for 2025. For 2026, the automotive giant targets mid-single-digit percentage growth in net revenues and low-single-digit percentage growth in its adjusted operating profit margin.
Tom Narayan, an analyst at RBC Capital Markets, noted in a Friday investor report, "The market anticipated an impairment, but the magnitude far exceeds those of Ford and GM. We expect a significant stock decline today. We continue to believe Stellantis needs to demonstrate its value through tangible results. In the U.S. market, the company's products are perceived as overpriced, and there is a view that underinvestment in product development has led to substantial market share loss."
**Acknowledging Past Strategic Missteps** This is the first time Filosa, who succeeded Carlos Tavares as CEO last June, has so directly pointed to strategic errors by the previous management. Tavares was dismissed in December 2024 following disagreements with the Stellantis board. Reportedly, in a book published last year, he suggested that pressure from key stakeholders might necessitate a separation of the company's operations in France, Italy, and the U.S.
Stellantis was formed just over five years ago, on January 16, 2021, through the $52 billion merger of Fiat Chrysler Automobiles and PSA Group. This merger created the world's fourth-largest automaker by sales volume. However, recent years have seen the company grapple with significant operational challenges, attributed to heavy bets on pure electric vehicles, a focus on profitability over market share, and cost-cutting measures that allegedly came at the expense of product development.
Under Tavares's leadership, Stellantis's global sales declined from 6.5 million vehicles at its inception in 2021 to 5.7 million in 2024, a drop of 12.3%. Sales in the U.S. market fell approximately 27%, from their 2021 level to 1.3 million units in 2024. The company's U.S. sales ranking dropped from fourth to sixth place, with its market share shrinking from 11.6% to 8%. Data from S&P Global Mobility indicates that Stellantis's global market share decreased from 8.1% in 2020 to a projected 6.1% for 2025.