Reality bites
Stellantis is hardly alone in feeling this pain; in December, Ford announced a $19.5 billion write-down as it reprioritized combustion engine platforms going forward. GM followed in early January with news that cancelling some of its EV plans would cost the company $6 billion. Neither bill is quite as large as the one facing Stellantis (and its shareholders).
The automaker has lagged behind Ford and General Motors in terms of its electrification strategy. In the time that Ford’s F-150 Lightning electric truck has come and gone, and as GM will sell you a couple of different EV pickups, Ram never got that far—and likely never will now that its giant-batteried truck has been canceled. And Jeep’s first US EV was more than a bit underwhelming.
Those cancelled products will cost Stellantis about $3.4 billion (€2.9 billion), with another $7.1 billion (€6 billion) from platforms that will no longer be amortized over nearly as many units. Another $6.8 billion (€5.8 billion) will be paid as cash over the next four years due to existing contracts.
Resizing the company’s supply chain will cost another $2.5 billion (€2.1 billion) as it needs fewer batteries. Laying off workers in Europe will cost another $1.5 billion (€1.3 billion), with an additional $4.8 billion (€4.1 billion) due to ongoing warranty issues.
“The charges announced today largely reflect the cost of over-estimating the pace of the energy transition that distanced us from many car buyers’ real-world needs, means and desires. They also reflect the impact of previous poor operational execution, the effects of which are being progressively addressed by our new team,” said Stellantis CEO Antonio Filosa.
Going forward, Stellantis says it will invest $13 billion in the US, where it plans to add 5,000 jobs as it builds more trucks and SUVs. Among these will be a new V8 version of the Ram 1500 pickup, a gas-powered version of the Dodge Charger, and some Jeeps.