Stellantis Seeks to Exit Battery Venture With Samsung as EV Losses Mount

Stellantis NV is seeking to exit its U.S. battery joint venture with Samsung SDI Co. as part of a broader effort to reduce losses from its electric vehicle strategy. The automaker said it is exploring ways to divest its stake, with no final decision yet made.

The move comes after Stellantis announced a €22 billion writedown, the largest in the company's history. The charge includes the costs of canceling EV projects, compensating suppliers, and restructuring operations. It also follows a strategic reset led by CEO Antonio Filosa.

The automaker is no longer pursuing an all-electric future and has shifted to a mix of EVs, hybrids, and combustion engines. This shift aligns with a broader industry trend as consumer demand for EVs has been slower than expected.

Why the Move Happened

Stellantis cited a "significant overestimation" of demand for electric vehicles under its previous leadership. Former CEO Carlos Tavares had pushed for rapid electrification, including plans to sell only EVs in Europe by 2030. However, these targets were abandoned after poor sales and operational challenges.

The company is now refocusing on what consumers are actually buying, including gas-powered and hybrid models. This shift has led to the cancellation of several high-profile EV projects, such as the Chrysler Airflow and the all-electric Ram 1500.

Stellantis also announced it would sell its 49% stake in a Canadian battery joint venture with LG Energy Solution for just $100. The decision to exit this venture reflects a broader strategy to cut costs and preserve cash.

How Markets Responded

Investors reacted sharply to the news, with Stellantis shares falling more than 25% in early trading. The company's stock has lost nearly half its value since the start of 2025. The writedown and strategic shift signaled to investors that the company is struggling to adapt to a changing market.

Moody's Ratings downgraded Stellantis' credit rating to Baa3 from Baa2, citing concerns over profitability and cash flow. The rating agency noted that the company will likely continue to generate negative free cash flow in 2026 as it implements its new strategy.

The automaker has also suspended its 2026 dividend and announced plans to issue up to €5 billion in hybrid bonds to strengthen its balance sheet.

What Analysts Are Watching

Analysts are closely monitoring Stellantis' ability to turn around its operations in North America and Europe. The company's success in this region will be key to its recovery. Filosa has pledged to invest $13 billion in the U.S., including bringing back V8 engines to the Ram truck line.

The company's remaining EV plans for 2026 include the Jeep Recon and a range-extended Ram 1500 REV. At the same time, Stellantis is reintroducing combustion engines in several models, including the Dodge Charger.

Investors will also be watching how the company navigates U.S. tariffs and the evolving EV incentive landscape. With Donald Trump's administration rolling back EV incentives, Stellantis faces additional hurdles in its transition to a hybrid business model.