Shares of Stellantis fell as much as 11% on Thursday after the maker of Jeep, Fiat and Peugeot warned of one-off charges linked to strategy shifts, regulatory changes, and warranty costs — even as it posted its first revenue growth in nearly two years.
The Franco-Italian carmaker reported a 13% jump in third-quarter revenue to €37.2 billion, buoyed by stronger sales in North America and Europe. It maintained its outlook for higher revenue, improved cash flow, and low single-digit profit margins for the second half of 2025.
“We took important decisions, such as product actions and major investments, that have restored the freedom to choose for our clients,” said new CEO Antonio Filosa, who took over in June.
Pivot back to hybrids
The one-off charges stem from a strategic pivot back to hybrid and petrol vehicles, reversing Stellantis’ earlier all-electric focus, and from extending warranties for faulty engines and components. The changes come as automakers face growing consumer demand for hybrid models amid uneven electric vehicle (EV) adoption.
“We quickly changed our organizational structure to restore proximity to our customers, dealers, and suppliers,” Filosa said. He added that Stellantis is investing $13 billion to boost U.S. production and shield itself from trade tariffs.
The company estimates current U.S. trade policies will cost about €1 billion ($1.2 billion) in 2025, though it expects to remain profitable.
Investors skeptical despite turnaround efforts
Despite the strong sales figures, investors reacted sharply to the announcement of new costs and what some analysts described as “vague” guidance.
Jefferies flagged the potential hit to cash flow, while Citi analysts said the financial impact of the charges remained unclear.
At 1530 GMT, Stellantis shares were down 9.3% in Milan, extending earlier losses. The company’s reassurance that the charges would not alter its 2025 outlook failed to calm market nerves.
CFO Joao Laranjo said the group’s financial goals “remain intact,” adding that the costs are “targeted investments in reliability, customer satisfaction, and strategic flexibility.”
Chip Shortage Adds Pressure
Stellantis also warned that the global semiconductor shortage could again disrupt output. The company said it has created a “war room” to monitor and respond to chip supply issues daily, aiming to prevent factory stoppages.
The shortage has been worsened by U.S.-China trade tensions and production slowdowns at Dutch chipmaker Nexperia. However, tensions could ease after U.S. President Donald Trump said he had reached an understanding with Chinese President Xi Jinping to stabilize chip supply chains.
A plan for U.S. revival
Filosa’s turnaround strategy focuses on reviving Stellantis’ U.S. market performance, where Jeep and Dodge sales have slumped amid growing competition and high inventory costs. The company plans to relaunch popular models like the Jeep Cherokee SUV and expand hybrid offerings across brands.
The CEO’s goal is to “simplify operations, strengthen local manufacturing, and regain consumer confidence.” Filosa will unveil a full business plan in Q2 2026, outlining new product lines, partnerships, and innovation targets.
Meanwhile, competitors are also under pressure, Volkswagen posted a $1.52 billion operating loss in Q3, highlighting broader sector challenges.
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