Jeep maker Stellantis warned Friday that it would take a massive 22 billion euro hit because it had overestimated how quickly the industry and car buyers would switch to electric vehicles.
The colossal $26 billion write-down will likely dwarf any profits the automaker was set to book for 2025, to be announced on February 26, after it posted net profit of 5.5 billion euros in 2024.
"It's the cost of a deep 'reset' necessary for our company to put clients at the centre of all we do, and to support sustainable growth," the automaker said in a statement to journalists, citing a "significant overestimation" of the industry's EV shift.
Chief executive Antonio Filosa, who took the helm in June after former chief Carlos Tavares was sacked in December 2024, will hold a conference call with investors at 2:00 pm (1300 GMT) on Friday.
Investors reacted by offloading Stellantis shares, which plunged 16 percent to 6.89 euros shortly after the opening of the Paris stock exchange.
"The charges announced today largely reflect the cost of over-estimating the pace of the energy transition that distanced us from many car buyers' real-world needs, means and desires," Filosa said in a separate statement.
"They also reflect the impact of previous poor operational execution, the effects of which are being progressively addressed by our new team," he said.
Filosa began his tenure with a leadership shake-up aiming to jump-start the struggling automaker, born of the 2021 merger of France's PSA with its U.S.-Italian rival Fiat Chrysler, creating the world's fourth-biggest automaker.
The company, whose 14 brands also include Ram trucks, Dodge, Chrysler and Maserati, has been slammed in particular by falling sales in its key North American market.
As recently as October it announced plans plans to invest $13 billion in U.S. plants over the next four years, widely seen as a response to President Donald Trump tariffs on imported autos and parts.
Later that month it posted a 13 percent rise in third-quarter revenues, citing improved business in the United States.
"We have gone deep into every corner of our business and are making the necessary changes, mobilizing all the passion and ingenuity we have within Stellantis," Filosa said in his statement Friday.
