Vauxhall owner takes 22bn hit after electric car u-turn

"Stellantis, the European carmaker behind Vauxhall, Citroén and Fiat, has taken a €22bn hit after admitting it overestimated the pace of electric vehicle adoption and reversing its push towards an all-electric future. The Franco-Italian automotive group said the strategic U-turn would result in €22bn of future losses, write-offs and cancellation costs linked to electric models that will no longer be brought to market. Around €6.5bn of that charge will involve cash leaving the business."

"The announcement triggered a sharp market reaction, with Stellantis shares briefly suspended before plunging more than 20 per cent once trading resumed. By mid-morning in London, the stock was down 21 per cent at €6.40, its lowest level in five years. The company also confirmed it would scrap its dividend. Stellantis said its future strategy would now be driven by "demand, not command", signalling a clear shift away from regulatory-led electrification targets towards customer preferences."

"Announcing the charges, Filosa said Stellantis would prioritise new petrol and hybrid models after misjudging the speed of the energy transition and losing touch with customers' real-world needs. "The charges announced today largely reflect the cost of over-estimating the pace of the energy transition," Filosa said. "That miscalculation distanced us from many car buyers' needs, means and preferences, and was compounded by poor operational execution.""

Stellantis recorded a €22bn charge after reversing plans for an all-electric future, acknowledging it overestimated the pace of electric vehicle adoption. The €22bn covers future losses, write-offs and cancellation costs for electric models that will no longer be launched, with about €6.5bn involving cash outflows. Shares plunged more than 20 per cent, trading was briefly suspended, and the company cancelled its dividend. The group stated strategy will be driven by "demand, not command", shifting toward customer preferences and away from regulatory-led electrification targets. CEO Antonio Filosa said the firm will prioritise petrol and hybrid models, citing misjudged timing and poor execution.

Read at Business Matters