The Electric Shift: Why Stellantis' Decline Signals a New Era in European Auto Investing

The European automotive sector is undergoing a seismic realignment, and Stellantis—the conglomerate born from the merger of Fiat Chrysler and PSA—finds itself on the wrong side of history. A 0.5% decline in April 2025 registrations amid stagnant EU-wide sales underscores a stark reality: the company's reliance on outdated strategies is failing to keep pace with the electric vehicle (EV) revolution. Meanwhile, competitors like BYD and Tesla are capitalizing on this shift, leaving investors with a clear choice: divest from laggards and double down on agile EV leaders.

The Numbers Tell a Dire Story

Stellantis' April 2025 sales dropped by 0.5% compared to the prior year, while its total EU market share dipped to 15.4%—a marginal improvement from 2024 but a far cry from its peak. This stagnation contrasts sharply with the 23.9% growth in battery-electric vehicles (BEVs) across Europe, which now command 15.2% of the market. Even hybrids, which Stellantis has prioritized, are being overshadowed by pure-EV demand.

The data paints a grim picture for Stellantis shareholders. While BYD's stock surged +359% in European sales alone (April 2025), Stellantis' market cap has dwindled as investors lose faith in its ability to compete. Even its “successes”—like a 17.3% market share in the EU30 region—mask deeper vulnerabilities: this figure is buoyed by hybrid sales, not BEVs, where the company lags behind rivals like BMW (25% BEV share) and Mercedes-Volvo-Polestar (23%).

Why Stellantis is Falling Behind

1. Weak BEV Pipeline:
   Stellantis' Tesla-Stellantis-Toyota alliance holds just 14% BEV share in Europe, far below the industry average of 16%. Its EVs, such as the Peugeot e-208 and Citroën ë-C3, struggle against Chinese imports like the BYD Skoda Elroq. While these models dominate rankings, Stellantis lacks the scale and innovation to compete.

2. Chinese Dominance:
   BYD's 59% surge in EU EV sales in April / 2025, driven by tariff-dodging plug-in hybrids (PHEVs), exposes Stellantis' lack of strategic agility. Chinese brands now capture 10% of Europe's PHEV market, while Stellantis' hybrid focus (15% share) fails to address the BEV boom.

3. Brand Fragmentation:
   While Peugeot and Opel/Vauxhall show modest gains, legacy brands like Fiat (-18%) and Lancia (-65%) hemorrhage sales. These brands' ICE-heavy portfolios are relics in a market demanding electrification.

4. Regulatory Headwinds:
   The EU's 2025 CO2 targets (93g/km) loom large. Stellantis' ICE-dependent sales drag down its emissions profile, risking fines or forced production cuts.

Investment Implications: Divest from Stellantis, Embrace EV Leaders

The writing is on the wall for Stellantis: its 9.6% year-to-date sales decline and inability to pivot quickly to BEVs make it a risk-ridden hold. Investors should:

• Sell STLA: Stellantis' valuation already reflects its declining relevance. A -22% drop in stock price over 12 months signals investor disillusionment.
• Buy BYD (BYDDF): Its strategic pivot to PHEVs and aggressive European expansion (e.g., Hungary plant) position it to dominate.
• Long Tesla (TSLA): Despite a -49% sales drop in April, Tesla's brand power and software edge remain unmatched.

Conclusion: The EV Tide Lifts Only Agile Boats

The European auto market is in irreversible transition. Stellantis' 0.5% sales decline is a symptom of a deeper malaise: a failure to innovate, adapt, and prioritize BEVs. Investors who cling to this legacy automaker risk obsolescence. The future belongs to companies like BYD and Tesla, which are redefining mobility—and shareholder returns—with speed and vision.

Act now. Sell Stellantis. Buy the future.

Data as of May 26, 2025. Past performance is not indicative of future results.