On Friday, February 6, 2026, Stellantis announced a deep strategic “reset” of the group. Management acknowledged that the transition toward electric vehicles had been planned too aggressively compared with what customers are actually buying. Today the market is asking for greater flexibility: electric vehicles, yes, but also hybrids and advanced internal combustion engines. This change in direction unsettled investors, and the share price fell by around 25–27% in a single day, dragging down Exor, the main shareholder, whose shares declined by about 5%.
Extraordinary charges of approximately €22 billion recorded in the second half of 2025 were the core of the announcement. These charges will result in a preliminary net loss of between €19 and €21 billion. Around €14.7 billion relates to write-downs linked to electric vehicle industrial plans that proved overly optimistic (EV models, platforms and investments no longer aligned with actual demand). A further €6.5 billion consists of restructuring costs, largely cash-based, to be incurred over the next four years, mainly to compensate suppliers and cancel orders.
To strengthen its financial structure, Stellantis has suspended the 2026 dividend and authorized the issuance of up to €5 billion of perpetual subordinated hybrid bonds. These instruments sit midway between debt and equity: they pay a high coupon but are perpetual and subordinated, and therefore riskier than traditional bonds. However, they help preserve liquidity (which remains solid at around €46 billion) without immediately diluting shareholders. At this stage, many investors may prefer bonds over equity: equity is highly volatile and closely tied to the automotive cycle, while bonds offer a more visible fixed return. Exor, as the reference shareholder, is under pressure and may need to support the operation to signal confidence and avoid future issues.
This episode is not an isolated case, but part of a broader crisis affecting the global automotive sector. Over the past six months, many manufacturers have revised plans and expectations: Volvo has slowed its EV push and cut jobs; Ford and GM have reduced EV production and reported multi-billion-dollar losses; Volkswagen has announced job cuts and plant closures due to excess capacity; and major suppliers (such as Bosch and Lear) are also downsizing. The problem is structural: stagnant sales, very high EV transition costs, the withdrawal of public incentives, and consumers constrained by high prices and inflation.
In 2025, the European EV market grew in volumes and reached 17.4% of total vehicle registrations. However, this level remains below the expectations formed at the outset of the transition, while hybrids vehicles are increasingly emerging as the true compromise solution (accounting for over 43% of registrations in 2025). This has created a genuine “EV shock” for traditional manufacturers, which had invested as if electric vehicles were already dominant.
Meanwhile, Chinese automakers are taking advantage of the situation. Brands such as BYD, MG and Chery offer electric and hybrid vehicles at lower prices, with competitive technology and strong state support. In just three years, their market share in Europe has risen from around 1–2% in 2023 to nearly 10% in 2025, exceeding 15% in the electrified segment. Even European tariffs are not stopping this trend, as many Chinese groups are localizing production in Europe.
In conclusion, Stellantis has brought to the surface once again, abruptly, a problem affecting the entire sector. The transition to electric vehicles has been slower and more costly than expected, customers are demanding mixed solutions, and Chinese competition is reshaping the rules of the game. Stellantis’ “reset” is painful in the short term, but it represents an attempt to adapt to a new automotive reality that will be longer, more complex and far more competitive than was assumed just a few years ago.
(Algebris does not hold Stellantis shares in its equity funds.)
This document is issued by Algebris Investments. It is for private circulation only. The information contained in this document is strictly confidential and is only for the use of the person to whom it is sent. The information contained herein may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of Algebris Investments.
The information and opinions contained in this document are for background purposes only, do not purport to be full or complete and do not constitute investment advice. Algebris Investments is not hereby arranging or agreeing to arrange any transaction in any investment whatsoever or otherwise undertaking any activity requiring authorisation under the Financial Services and Markets Act 2000. This document does not constitute or form part of any offer to issue or sell, or any solicitation of an offer to subscribe or purchase, any investment nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore.
No reliance may be placed for any purpose on the information and opinions contained in this document or their accuracy or completeness. No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained in this document by any of Algebris Investments, its members, employees or affiliates and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions.
This document is being communicated by Algebris Investments only to persons to whom it may lawfully be issued under The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 including persons who are authorised under the Financial Services and Markets Act 2000 of the United Kingdom (the “Act”), certain persons having professional experience in matters relating to investments, high net worth companies, high net worth unincorporated associations and partnerships, trustees of high value trusts and persons who qualify as certified sophisticated investors. This document is exempt from the prohibition in Section 21 of the Act on the communication by persons not authorised under the Act of invitations or inducements to engage in investment activity on the ground that it is being issued only to such types of person. This is a marketing document.
The distribution of this document may be restricted in certain jurisdictions. The above information is for general guidance only, and it is the responsibility of any person or persons in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. This document is suitable for professional investors only. Algebris Group comprises Algebris (UK) Limited, Algebris Investments (Ireland) Limited, Algebris Investments (US) Inc. Algebris Investments (Asia) Limited, Algebris Investments K.K. and other non-regulated companies such as special purposes vehicles, general partner entities and holding companies.
© 2025 Algebris Investments. Algebris Investments is the trading name for the Algebris Group
For more information about Algebris and its products, or to be added to our distribution lists, please contact Investor Relations at algebrisIR@algebris.com. Visit Algebris Insights for past commentaries.
Any opinion expressed is that of Algebris, is not a statement of fact, is subject to change and does not constitute investment advice.
No reliance may be placed for any purpose on the information and opinions contained in this document or their accuracy or completeness. No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained in this document by any of Algebris Investments, its members, employees or affiliates and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions.
© Algebris Investments. Algebris Investments is the trading name for the Algebris Group.
