Stellantis: A Most Unfortunate Combustion

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Shares of Stellantis (STLA 24.69%), purveyors of vehicular locomotion and, until recently, a reasonably dependable source of dividend income, experienced a rather precipitous descent on Friday. It appears the market has taken a dim view of the company’s… let’s call it ‘recalibration’ of its electric ambitions. One suspects the alchemists in the finance department are furiously recalculating their projections, and not with chalk this time, but with something considerably more flammable.

As of 1:15 p.m. ET, Stellantis’s shares were down approximately 24.5% from Thursday’s closing price. A decline of that magnitude is rarely attributed to a sudden fondness for horse-drawn carriages.1

Over Twenty-Six Billion Euros Vanished Into the Aether

Stellantis announced a charge of 22.2 billion euros (roughly $26.5 billion) before the U.S. markets had fully roused themselves. The bulk of this sum is attributable to a downsizing of their electric vehicle plans – a polite way of saying that the future they envisioned isn’t quite materializing as swiftly, or profitably, as hoped. Some of it, too, is down to quality issues. It’s always the quality issues, isn’t it?2

The particulars of this financial adjustment include:

  • 14.7 billion euros related to product-plan changes. This encompasses write-offs for models that aren’t selling with the vigour expected, costs associated with abandoned projects, and payments to suppliers who, rather optimistically, geared up to produce parts for vehicles that now exist only as blueprints.
  • 2.1 billion euros for scaling back plans for an electric vehicle supply chain, largely concerning investments in battery manufacturing. Batteries, it seems, are proving stubbornly expensive to conjure.
  • 5.4 billion euros in “other charges”, including an increase in warranty provisions. An admission, if one were needed, that the recent attempts to improve quality haven’t quite hit the mark. One imagines the warranty department is bracing for a siege.

Several competitors, including Ford Motor Company (NYSE: F) and General Motors (NYSE: GM), have also announced similar adjustments to their electric vehicle strategies. But none have been quite as… substantial as Stellantis’s. And, crucially, the market’s reaction has been notably more severe. Investors, it seems, are a fickle bunch, easily spooked by large numbers and the scent of unfulfilled promises.

A Forecast of Fiscal Discomfort

Stellantis, which reports its earnings on a semi-annual basis, now anticipates an operating loss of 1.2 billion to 1.5 billion euros for the second half of 2025. A rather sobering prospect, particularly for those of us who rely on a steady stream of dividend payments.3 And, alas, those payments have been suspended for the time being. A temporary inconvenience, one hopes, but a significant one nonetheless.

The company will reveal its complete second-half and full-year 2025 results on February 26th. Until then, we can only speculate, and perhaps quietly adjust our portfolios accordingly.


1 The Guild of Stablehands, however, is reportedly experiencing a surge in applications. A curious development.
2 It’s a truth universally acknowledged, that a manufacturer in possession of a good reputation, must be in want of a rigorous quality control department.
3 The discerning dividend hunter, you see, views a stock not as a piece of paper representing ownership, but as a promise. A promise of future income, of financial security, of the ability to purchase slightly better biscuits. When that promise is broken, one must reassess.

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2026-02-06 21:22