UPDATE: Automaker Stellantis NV faces a dramatic downturn as CEO Antonia Filosa announced an alarming €22.2 billion ($26 billion) in writedowns, triggering a 25% stock plunge during trading in Milan. This news comes just fourteen months after former CEO Carlos Tavares delivered similarly shocking results to investors.
The latest announcements, made on December 8, 2023, reveal that much of the writedowns are linked to Tavares’ unprofitable electric vehicle investments. Analysts had anticipated a more stable outlook, making these revelations particularly jarring. Stellantis now faces a staggering loss of nearly €70 billion in market value since March 2024.
Filosa, who had recently assured investors of meeting full-year guidance, has shifted the outlook significantly. The company now warns of a potential second-half deficit of up to €1.5 billion, which has been described as “much worse” than expected by Evercore analyst Chris McNally. He also criticized Stellantis’ vague forecast for 2026, predicting only a mid-single-digit revenue increase and a low-single-digit adjusted operating income margin.
In a move to mitigate losses, Stellantis is divesting its 49% stake in a Canadian joint venture with LG Energy Solution for just $100, effectively erasing the nearly $980 million investment. This joint venture was established in 2022 to develop a large-scale EV battery plant in Windsor, Ontario.
The writedowns also include a €4.1 billion charge related to warranty expenses stemming from quality issues attributed to previous management decisions. Additionally, the company reported €1.3 billion in charges associated with earlier-announced job cuts in Europe.
Despite these setbacks, Filosa highlighted recent traction in Stellantis’ key brands, including Jeep and Ram. Jeep recently ended a six-year decline in U.S. sales, with a 4% increase in deliveries during the fourth quarter. Analysts remain cautiously optimistic, with Tom Narayan from RBC Capital Markets describing this situation as a “kitchen sink” moment that could pave the way for a much-needed turnaround.
Stellantis’ current challenges underscore the urgency for management to regain investor confidence amidst significant market volatility. With ongoing scrutiny from analysts and investors alike, all eyes will be on how Filosa navigates these turbulent waters in the coming months.
As the situation develops, further updates will be crucial for stakeholders eager to understand the future trajectory of Stellantis amidst a rapidly changing automotive landscape.
