World’s Fourth-Largest Automaker Pays a Price for Its Aggressive Moves

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On the road to transformation for traditional automakers, the price of underestimating difficulties can be so steep that it can wipe out the value of three mid-sized carmakers in a single day.

Stellantis, the world’s fourth-largest automotive group, recently suffered a stock price plunge in the capital markets. Its U.S.-listed shares sank more than 23% in one day, erasing tens of billions of dollars in market value—roughly the combined worth of several sizable auto companies. Panic quickly spread to Europe; its shares in France at one point tumbled nearly 30%.

Some news reports said Stellantis had “mistakenly believed in its own pricing power.” In a post-mortem reflection, Stellantis CEO Antonio Filosa also conceded that “we overestimated the pace of the energy transition.” The aggressive all-electric targets set earlier have been refuted by hard data: the EV market in North America cooled sharply at one point, with sales halving quarter-on-quarter; European consumers, too, voted with their feet—driven by charging anxiety and high prices—and turned to hybrids or even gasoline cars instead.

Stellantis’s violent shock has sounded the most piercing alarm bell yet for every traditional giant attempting to reinvent itself.

Many people are puzzled: how could an auto titan that owns 14 well-known brands—Jeep, Maserati, Peugeot, Citroën, and others—fall so hard in a single day? In fact, Stellantis’s share-price rout had been telegraphed for some time.

Consider a set of numbers: over the past three months, Stellantis’s share price slid from around $10 to roughly $7, a drop of more than 30%; in January 2026 alone, it fell 12%; and from its record high in March 2024, the company’s market capitalization had cumulatively shed more than €50 billion—equivalent to losing more than twice its current total market value. In other words, the one-day plunge was a concentrated blowout after a long period of sustained pressure.

What set off this wave of panic mainly came down to three things. First, Stellantis announced a massive €22.2 billion (about RMB 180.4 billion) charge—an amount roughly equal to the company’s entire current market capitalization—aimed at covering losses from having taken the wrong path in its earlier electrification transition. Of that total, €14.7 billion was used to adjust products to comply with new U.S. emissions regulations and to correct missteps in its earlier all-electric product rollout; €2.1 billion was used to overhaul the EV supply chain; and another €5.4 billion went toward layoffs, warranty costs, and more.

Second, a major strategic retrenchment. The company directly sold its 49% stake in the Canadian battery project it ran as a joint venture with LG Energy Solution, fully exiting a battery plant that had once carried high expectations. It also scrapped plans for several all-electric models that weren’t selling and weren’t profitable, including the Ram 1500 all-electric pickup. Put simply, nearly all of its previous big-bet electrification moves were essentially “cut and stopped.”

Third, management’s “self-contradictions” completely drained investor trust. CEO Antonio Filosa admitted that day that the company had previously overestimated the pace of electrification, and that the all-electric products it launched simply didn’t match consumers’ needs or purchasing power. But what few expected was that just two months earlier (early December 2025), the same CEO had struck an upbeat tone, saying performance would improve steadily and that the electrification transition was progressing smoothly. This kind of about-face—“changing faster than turning a page”—sent investors into a full-blown panic: if even management has no clear read on the company’s future, how can anyone keep holding the stock?

It’s worth noting that Ford and GM, which also pulled back their electrification businesses, had previously taken huge impairment charges as well, yet their share-price declines were nowhere near as dramatic as Stellantis’s. That suggests the market’s core concern has moved beyond mere “business adjustments.”

As Bernstein analyst Stephen Reitman noted in a report, compared with the extent of the share-price swings after Ford and GM announced similar EV-related asset write-downs, Stellantis’s latest move shows that “there remains a huge gap for Stellantis management to bridge in rebuilding market trust.”

By contrast, Ford’s and GM’s adjustments were seen as pragmatic responses to market realities, while Stellantis’s actions were interpreted as a wholesale repudiation of its past aggressive strategy. Coupled with management’s previously overly optimistic guidance, this severely depleted investors’ confidence in its ability to judge and execute its future strategy.

Too Eager in “Chasing the Trend”

Stellantis’ current predicament is, at its core, a setback born of “wanting results too fast.”

The initial problem stemmed from the aggressive targets set by the previous CEO. In order to catch up with automakers like Tesla and BYD, the former leadership set itself an “impossible mission”: by 2030, make battery-electric vehicles account for 100% of sales in Europe and 50% in the U.S. The goal sounded ambitious, but it was completely detached from market reality—In the United States, consumers still favor large-displacement gasoline pickups and SUVs, and acceptance of and purchasing power for pure EVs fell far short of expectations; in Europe, electrification moved faster, but consumers were still nowhere near the point of “completely giving up gasoline cars.”

The targets were set too high, yet the products and supply chain couldn’t keep pace at all. The battery-electric models Stellantis launched were either overpriced or failed to meet consumer needs in range and features; sales remained dismal. Not only did the EV business fail to make money—it kept burning cash. Even the battery plant it co-founded with LG Energy Solution failed to build any advantage in capacity or cost. After pouring in substantial funds without getting commensurate returns, it ultimately had no choice but to withdraw.

More importantly, management fell into a “cognitive mismatch”: it treated the shift to electrification as a blind bet, assuming that as long as it spent heavily and pushed EV products, it could ride the wave—while forgetting its own “foundation”: the traditional internal-combustion business. After all, Stellantis’ main profit engine has long been gasoline models such as Ram pickups and Jeep SUVs in the U.S. market; in the second half of 2025, its U.S. market share even rose to 7.9%. But management tried to make money with ICE vehicles while also making a reckless all-in push on electrification—grabbing at both ends and getting neither right: it failed to shore up its strengths in ICE vehicles, and it took detours on electrification, ultimately landing in a dilemma of “a stalled transformation + mounting pressure on the core business.”

Plunge Is Only the Beginning

For Stellantis, a one-day plunge of more than 23% wasn’t the scariest part. What’s truly alarming are the hidden risks behind the sell-off—problems that are only just starting to ferment and could deliver an even bigger shock down the line.

First, there is financial pressure, and it has already reached a “barely making ends meet” level. The company warned that its net loss in the second half of 2025 would reach €19–21 billion (about RMB 156–172 billion). To keep the funding chain stable, it not only suspended its 2026 dividend payment—which means shareholders holding Stellantis stock won’t receive a payout this year—but also planned to issue hybrid bonds to raise up to €5 billion to “replenish the blood.” More worrying still, Stellantis’ 2026 performance target put its adjusted operating profit margin at only the “low single digits,” far below market expectations. That suggests the company will struggle to regain profitability in the short term, and it will be difficult for the share price to rebound.

Second is a crisis of market trust that will be hard to repair quickly. After this plunge, investor confidence in Stellantis has collapsed, and many analysts have already cut their price targets; for consumers, the company’s frequent revisions to product plans and massive provisions will also hurt brand reputation, making it even harder to win the market back with new products; and for suppliers and partners, Stellantis’ financial distress and strategic wavering will raise doubts as well, potentially affecting the progress of future cooperation.

Finally, at the industry level, Stellantis has become a “cautionary tale” for traditional automakers’ electrification transitions. Its failure has prompted the market to re-question the transformation capabilities of legacy multinational carmakers—if even a giant like Stellantis, with multiple well-known brands and deep pockets, can stumble so badly in the shift to EVs, will other traditional automakers repeat the same mistakes? This skepticism will not only weigh on Stellantis itself, but could also ripple across the entire legacy auto sector, undermining investor confidence in the industry as a whole.

In the face of this crisis, Stellantis has rolled out a series of countermeasures. So far, these moves look fairly “pragmatic,” but whether they can truly break the deadlock will depend on how well they are executed.

In the short term, Stellantis’ core task is to “protect the cash pile” and rebuild investor confidence. On the one hand, it will steadily dispose of non-core assets—for example, selling stakes in battery projects—to bring cash back in and ease cash-flow pressure; on the other hand, it plans to release a detailed full-year 2025 financial report on February 26 and an updated long-term strategy in May, using clear planning and real results to calm market panic.

In the medium term, Stellantis has already abandoned the aggressive electrification targets set by the previous management team and instead proposed a transition pace “driven by market demand”—in other words, it will stop forcing BEVs onto the market, prioritize profitability first, rely on its ICE strengths in the U.S. market to “generate cash flow,” and then gradually roll out BEVs that better match demand. For example, the company has announced that it will invest $13 billion in the United States over the next four years and launch 10 ICE and hybrid models.

Antonio Filosa spoke plainly about the challenges the company faces on the conference call. He said: “What we’re announcing today is a far-reaching strategic adjustment… This adjustment will put customers’ real needs back at the core of everything we do.”

Over the long term, as the world’s largest new-energy vehicle market, China not only has a huge consumer base but also leads in electrification and intelligent technologies—something Stellantis has already recognized. It is currently deepening its joint-venture partnership with Leapmotor, with plans to take Leapmotor models global; at the same time, it has teamed up with Pony.ai to develop autonomous vehicles for the European market, attempting to leverage Chinese technology to break through its own intelligentization bottleneck. For now, however, these partnerships are still at an early stage, and whether they can translate into real competitiveness will take time to prove.

Stellantis’s share-price plunge is not an isolated incident. In recent years, more and more traditional automakers have rushed to chase the electrification wave, blindly set aggressive targets, poured money into pushing BEVs, yet overlooked market demand and their own strengths—ultimately landing themselves in trouble. Stellantis is simply the most典型 example.

There has never been a “shortcut” in the shift to electrification, nor is it a case of “the faster, the better.” What matters is “getting it right.” For traditional multinational automakers, the essence of transformation has never been “ditching ICE and going all-in on BEVs,” but rather “building on their strengths, aligning with market demand, and striking the right balance between profitability and the pace of transition.” Stellantis’s lesson is one all traditional automakers should reflect on: an aggressive strategy detached from market demand is far more fatal than being late to transform.

(Reporting by Han Jingxian, Editing by Li Yupeng)

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