Stellantis Faces €22 Billion Loss After Shifting Electric Vehicle Strategy

The European automotive manufacturer Stellantis, which includes brands such as Vauxhall, Citroën, and Fiat, has announced a significant adjustment in its strategy regarding electric vehicles. The company reported anticipated future losses amounting to €22 billion, alongside a decision to cancel new electric vehicle models.

This announcement has impacted the company’s share price, which dropped by over 20 per cent shortly after the news broke. Shares were trading at €6.40, marking their lowest level in five years. The decision to pivot from electric vehicles to internal combustion engines is a stark rebuke to regulators and legislators advocating for a greater focus on sustainability within the automotive sector.

Stellantis has indicated that the new strategy is designed to reflect the actual preferences of its customers. The company’s CEO, Antonio Filosa, acknowledged that demand, not regulatory pressure, will dictate future production. This shift may resonate with consumers who are less inclined towards electric options due to various lifestyle and financial considerations.

The announcement follows a tumultuous period within the company, which has faced considerable internal strife regarding its strategic direction. Previous CEO Carlos Tavares departed amid these tensions, and Filosa’s new approach appears to be aimed at restoring stability and growth.

In a move to reinforce its traditional vehicle offerings, Stellantis plans to invest $13 billion over the next four years, focusing on increasing manufacturing capacity and creating more than 5,000 jobs in the US. This investment includes the re-introduction of iconic models, such as the HEMI V8 engine in the Ram 1500 pick-up truck, which had been sidelined in favour of electric alternatives.

The decision to step back from electric vehicle production aligns Stellantis with similar recent moves made by other major automotive players, including Ford and General Motors. These companies have also adapted their strategies in response to changing market demands and political climates.