Jeep maker Stellantis announces a ‘reset’ of its business and massive charges. Shares crumble

By Olesya Dmitracova, CNN

London (CNN) — Stellantis, the owner of Jeep and Chrysler, announced a “reset” of its business after its enormous investments in electric vehicles failed to pay off .

The company said Friday that it would take charges of more than $26 billion, the bulk of which includes write-offs and cash payments for canceled EV products and costs of resizing its EV supply chain.

The announcement sent Stellantis (STLA) shares crashing. They were down more than 28% Friday morning.

The strategy revision follows similar – and expensive – actions from Ford and General Motors in recent weeks.

Many carmakers in the United States had invested heavily in EV plans in response to strict environmental regulations put in place by the Biden administration. They also expected some states to follow California and ban sales of gasoline-powered vehicles within a decade.

But the Trump administration has rolled back those emissions rules along with financial support for EVs. It is also challenging states’ authority to set their own tougher rules.

Commenting on the charges of €22.2 billion ($26.2 billion), Stellantis CEO Antonio Filosa said they “largely reflect the cost of over-estimating the pace of the energy transition.”

The company also said in a statement that the shift to EVs “needs to be governed by demand rather than command.”

“Stellantis is committed to being a beacon for freedom of choice, including for those customers whose lifestyles and working requirements make the company’s growing range of hybrid and advanced internal combustion engine vehicles the right solution for them,” it added.

Underlining its dimmer forecast for EV demand, Stellantis said the bulk of the charges – €14.7 billion – related to “re-aligning product plans with customer preferences and new emission regulations in the US.”

The company, which is listed in New York, Milan and Paris, is due to report its earnings for 2025 on February 26, but on Friday it revealed a net loss for the year and said it would not pay an annual dividend in 2026 as a result.

A recent regulatory change in Europe also bodes ill for the transition to cleaner cars.

The European Union had planned to ban the sale of new combustion engine vehicles by 2035. But in December, after pressure from carmakers, the bloc’s executive arm said the ban would apply to only 90% of new vehicles. This means the remaining 10% of new cars made after 2035 could still be plug-in hybrids or cars with internal combustion engines.

Europeans’ appetite for EVs has been lower than car manufacturers expected, not helped by the patchy charging infrastructure on the continent.

Measuring how much planet-warming pollution a car emits is not straightforward as its whole life cycle, including how it was manufactured, needs to be taken into account.

Gas-powered cars, hybrids and EVs all emit roughly the same amount of pollution to manufacture, until you get to producing the battery.

Fully electric cars use large batteries made of materials that require heavy mining. That makes EVs 40% dirtier to produce on average than hybrid and gas-powered vehicles, one study shows.

But the picture changes over the whole life cycle. Gas-powered cars are the cleanest to make but the dirtiest over their lifetimes because their tailpipe pollution is so high. EVs might be the most carbon-intensive to manufacture, but they emit the least carbon pollution over their lifetimes: 40% less than gas-powered cars.

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CNN’s Chris Isidore, Lianne Kolirin, Ella Nilsen and Lou Robinson contributed to this report.