On February 6 (local time), shares of Stellantis, the world's fourth-largest automotive manufacturer, took a significant nosedive in both the U.S. and French stock markets. The stock closed 23.79% lower in the U.S. and 25.24% lower in France. The company unveiled a staggering €22.2 billion transformation outlay, mainly earmarked for business restructuring anticipated to be finalized over the next four years, encompassing roughly €6.5 billion in cash disbursements.
Out of the €22.2 billion, €14.7 billion is allocated to realigning product strategies with customer inclinations and new U.S. emissions standards. Additionally, €2.1 billion will be invested in scaling up the electric vehicle supply chain, and €5.4 billion will be dedicated to operational modifications. These modifications include revisions to contract warranty estimates due to inflation and quality degradation, as well as costs associated with layoffs in Europe.
The company projects a loss ranging from €19 billion to €21 billion in the second half of 2025. Consequently, it has decided to halt dividend payments for 2026 and plans to issue hybrid bonds to raise up to €5 billion, aiming to uphold financial stability. Stellantis CEO Antonio Filosa explained that the substantial expenditure stemmed primarily from the company overestimating the speed of the energy transition, which led its product strategy to diverge from actual consumer demand. Moving forward, the company's shift towards electrification will be guided by market demand, abandoning overly ambitious targets.
In the meantime, Stellantis will ramp up its investment in the U.S. market, allocating a total of $13 billion over the next four years and creating 5,000 new jobs. Data indicates that in the second half of 2025, Stellantis' market share in the U.S. will surge to 7.9%. The company will also maintain its second-place position overall in Europe, with full-year sales expected to return to positive growth.