CEO Admits EV “Over-Optimism”, You Can Say that Again
the staff of the Ridgewood blog
MILAN/NEW YORK — In a historic “strategic reset” that has sent shockwaves through the global auto industry, Stellantis—the parent company of Jeep, Ram, Dodge, and Chrysler—announced a staggering $26.5 billion charge on Friday.
The move comes as new CEO Antonio Filosa admitted the company miscalculated the speed of the electric vehicle (EV) transition. The announcement triggered a massive sell-off, with Stellantis stock (STLA) plummeting over 22% in New York and Milan as investors digested the end of the automaker’s aggressive EV-first era.
The “Strategic Reset”: Putting Gas Back in the Tank?
The $26.5 billion hit is significantly larger than similar charges taken by rivals Ford and General Motors. According to Filosa, who took over last summer, the company is pivoting away from the “over-optimistic” targets set by former CEO Carlos Tavares.
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The Failed Goal: Previous leadership aimed for 100% EV sales in Europe and 50% in the U.S. by 2030.
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The Reality: Fully electric vehicles accounted for only 7.7% of new U.S. car sales last year.
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The New Focus: Filosa emphasized that Stellantis will now put “customer preferences back at the center,” a clear signal that internal combustion engines (ICE) and hybrids will remain at the core of the Jeep and Ram lineups.
The “Trump Effect” and Subsidy Withdrawal
The automaker’s struggles are compounded by shifting political tides in the United States. Following the removal of federal EV subsidies under the Trump administration, consumer interest has cooled significantly.
Valvoline CEO recently noted that interest in electric vehicles has “dropped off” since the incentives vanished, leaving manufacturers like Stellantis with expensive EV supply chains and unsold inventory.
Quality Issues and Engineering Brain Drain
Beyond the EV pivot, the $26.5 billion charge reflects deep internal scars. Filosa blamed aggressive cost-cutting under the previous administration for a decline in vehicle quality. To fix the mess, the company has had to:
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Hire 2,000 engineers globally to address product defects.
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Revise warranty provisions due to poor build quality in recent models.
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Slash jobs across Europe to streamline the new, leaner business model.
“Stellantis got it wrong on how quickly the world would transition,” said Ross Mould, investment director at AJ Bell. He questioned whether the sales slump was a market issue or if “drivers simply don’t like its vehicles” compared to rising Chinese competitors like BYD.
Financial Fallout: No Dividend in 2026
The news has left investors reeling. For the first time in years, Stellantis confirmed it will not pay a dividend this year. The company’s 2026 forecast remains modest:
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Revenue: Mid-single-digit increase.
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Operating Margin: Low-single-digit projections.
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Cash Flow: Industrial free cash flows aren’t expected to turn positive until 2027.
The Bottom Line
Stellantis is a multinational giant with brands ranging from Maserati to Fiat, but its survival relies on high-margin American pickups and SUVs. By taking this $26 billion hit now, Filosa is betting that a return to what the customer actually wants—powerful, reliable gas and hybrid engines—will save the company from an all-electric dead end.
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Tags: #Stellantis #AutoIndustry #EVNews #Jeep #RamTrucks #StockMarket #BreakingNews #BusinessUpdate #ElectricVehicles
Looks like the tilting at windmills is over.
Good excuse, but they couldn’t even sell their ICE vehicles at their inflated prices.
They (the manufacturer) gave their most loyal customer base the f*** off and tried to sell their vehicles at high margin to keep their stock price up.