Stellantis Posts First Annual Loss Amid Strategic Reset in EV Plans

Stellantis N.V. reported its first annual operating loss in its history, marking a turning point for the automaker. The company swung to a loss in the second half of 2025, driven by a strategic reset in its electric vehicle (EV) strategy. The loss reflects a broader industry trend, as other automakers also reconsider their EV commitments amid slower-than-expected demand.

The automaker took a massive hit from write-downs, impairments, and restructuring costs. It recorded €25.4 billion in unusual charges in 2025, primarily tied to the scaling back of its EV ambitions. These charges included platform impairments, rationalizations of battery manufacturing, and the discontinuation of hydrogen fuel cell programs.

Stellantis is now shifting its focus to meet customer preferences, including a broader range of internal combustion engine, hybrid, and electric vehicles. CEO Antonio Filosa said the company expects to return to profitability in 2026 and highlighted early signs of progress in its operations.

Why Did Stellantis Make This Move?

The strategic shift stems from disappointing EV sales and regulatory changes that reduced incentives in key markets. In Europe, EV demand did not meet expectations, while in the U.S., the removal of tax credits for EVs forced Stellantis to reevaluate its product mix.

Stellantis has been scaling back its EV roadmap and reintroducing traditional powertrain options. For example, the company launched the Jeep Cherokee hybrid and the Ram 1500 HEMI V8 in 2025, targeting segments where customer demand remains strong.

The company also cited FX headwinds and pricing pressures as factors in its financial performance. Net revenues fell 2% to €153.5 billion in 2025, with the second half showing a 10% year-over-year improvement.

How Did Markets React to the Announcement?

The announcement sent Stellantis’ stock tumbling. On February 6, 2026, the company revealed the scale of its charges, prompting a roughly 25% drop in its market value within days. Investors reacted with concern, given the unprecedented nature of the charges and the uncertainty around the company’s future direction.

However, Filosa emphasized that the reset was necessary to align with customer preferences and global regulatory environments. The company has also taken steps to preserve liquidity, including the suspension of the 2026 dividend and a potential issuance of up to €5 billion in hybrid bonds.

What Are Analysts Watching for in 2026?

Analysts are closely watching for signs of recovery in Stellantis’ operations, particularly in the U.S. and European markets. The company has reiterated its 2026 guidance, including mid-single-digit revenue growth and a return to positive adjusted operating income.

The success of the new product wave, including hybrid and ICE offerings, will be critical. The Jeep Cherokee is seen as a key model in the U.S. market and is expected to help restore volume and profitability.

Stellantis is also expanding its product lineup in emerging markets, with the Fiat Strada and Ram Dakota anchoring offerings in South America. These models are part of a broader strategy to target profitable growth opportunities outside of its core markets.

Overall, the company is aiming for a more balanced portfolio that reflects current customer demand and regulatory realities. If successful, Stellantis could return to profitability as early as 2026, but the path will require disciplined execution and continued cost control.