Jeep and Chrysler Owner Takes $26 Billion Hit as EV Plans Collapse, Shares Fall 30%

Stellantis shares plunged 30% Friday after the automaker announced more than $26 billion in charges tied to its failed electric vehicle strategy. The company, which owns Jeep, Chrysler, Ram, and Dodge, said it overestimated how quickly American consumers would buy battery-powered vehicles. The announcement wiped out billions in market value as investors reacted to the massive losses.

The company canceled the Ram 1500 electric pickup, saying it couldn’t make the truck profitable. Stellantis also scrapped other electric models and wrote down billions on platforms built for battery-powered vehicles. The automaker faces $6.5 billion in cash payments over four years to cover supplier contracts and unused manufacturing capacity built for production that never materialized at expected volumes.

Stellantis set aside $2.1 billion to restructure its battery supply chain after building far more capacity than customers wanted. CEO Antonio Filosa said in a Friday conference call that the charges “largely reflect the cost of over-estimating the pace of the energy transition.” The company admitted it had lost touch with what buyers actually needed.

Policy Reversals Left Automakers Exposed

Stellantis joins Ford and General Motors in taking big charges after betting on electric vehicles. Ford announced $19.5 billion in writedowns and halted F-150 Lightning production, while GM took a $6.6 billion charge on its China operations. The three Detroit automakers poured tens of billions into plans based on government rules and customer demand that changed under the current administration.

Under the Biden administration, automakers responded to strict emissions rules and electric vehicle incentives by building battery factories, charging networks, and electric platforms. California said it would phase out gasoline sales by 2035, and other states planned to follow. Companies like Stellantis bet billions that government regulations would push Americans to buy electric vehicles faster than they actually did.

The Trump administration killed federal tax credits for electric vehicle buyers and loosened tailpipe emissions rules that Biden had tightened. Officials also challenged whether states can set tougher environmental standards than the federal government. For automakers, the changes came too late. They had already spent billions on electric vehicle programs and built factories they no longer needed.

EVs Cost More to Build But Less Over Time

Building a battery-electric vehicle creates about 40% more carbon emissions than making a gas or hybrid car, CNN reports, citing research from the International Council on Clean Transportation. The difference comes from battery production, which requires mining and processing lithium, cobalt, and nickel. Gas and hybrid vehicles produce similar manufacturing emissions until you add the battery.

That manufacturing gap disappears over time. Battery-electric vehicles produce 50% to 73% less total carbon than gas cars over their full lives, CNN reports, citing recent studies. Years of driving with no tailpipe emissions make up for the higher cost to build them. Hybrids fall in the middle, creating less pollution than gas cars but still producing some emissions.

The European Union planned to ban gas engine sales by 2035, but backed off in December after carmakers pushed back. The updated rules now require a 90% cut in fleet emissions from 2021 levels, letting automakers hit the last 10% with hybrids running on renewable fuels or cars made with green steel. European buyers turned out to be less interested in electric vehicles than expected.

Company Shifts to Hybrids, Projects Recovery

Stellantis lost money in 2025 and won’t pay its usual dividend in 2026. Despite the hit, Filosa said the company will be profitable this year. Stellantis approved selling up to $5 billion in bonds to keep cash available. The company said in its press release that switching to electric vehicles “needs to be governed by demand rather than command.”

The company’s new plan treats hybrids and gas engines as long-term options, not just stopgaps until everyone goes electric. Stellantis said it’s offering “freedom of choice” for customers whose jobs or lives make hybrids and gas cars more practical than electric ones. That’s a big shift from recent years, when Stellantis and other automakers said electric was the future.

Some good news emerged late in 2025. North American shipments jumped 39% in the second half compared to the year before, while European orders climbed 13%. Orders in Europe’s fourth quarter rose 23%. Stellantis will lay out its full plan at an investor meeting in May, where executives will explain how they’ll balance electric, hybrid, and gas vehicles going forward.