Stellantis - Lorenzo Oriente
This article provides a comprehensive analysis of Stellantis' dramatic corporate transformation from record-breaking profitability in 2023 to its current crisis, examining three critical dimensions: the company's financial deterioration, its broader impact on Italy's automotive supply chain ecosystem, and the strategic implications of its €22.2 billion write-down announced in February 2026.
Through detailed financial analysis spanning 2021 to 2025, this study reveals how macroeconomic pressures, overestimated EV demand, and competitive dynamics from Chinese manufacturers precipitated one of the automotive industry's most significant corporate restructurings.
The deterioration was swift: after reaching peak revenues of €189.5 billion and a net profit of €18.6 billion in 2023, the company saw revenues fall to €156.9 billion in 2024 and margins compress dramatically, culminating in the suspension of dividends and a sweeping strategic reset.
The analysis also focuses specifically on the cascading effects on Italy's network of small and medium enterprises, known as PMI, that have historically depended on Fiat and Stellantis contracts, and on the February 2026 decision to sell the company's 49% stake in the Canadian battery joint venture NextStar Energy as part of a broader realignment away from full EV commitment.
​
The article concludes that while Stellantis faces substantial near-term challenges, including suspended dividends and negative cash flows, strategic repositioning toward hybrid technologies and market segments of strength may offer pathways to recovery, albeit with continued regional economic implications for Italian industrial communities.
Company overview and History
Stellantis was created from the merger of FCA and PSA Group, finalized in 2021, in what was then one of the largest consolidations in the automotive industry.
The rationale was to combine complementary geographies, technologies, and brand portfolios to increase competitiveness against global rivals and better navigate the shift toward electrification and new mobility solutions.
​
The Stellantis portfolio encompasses multiple segments and legacy brands.
​
Italian and European heritage is represented by Fiat, Alfa Romeo, Lancia, Maserati, Peugeot, Citroën, DS, Opel and Vauxhall.
North American exposure is anchored by Jeep, Chrysler, Dodge, and Ram.
​
This brand diversity has allowed Stellantis to operate across price points, segments, and regions, from mass-market compact cars to premium performance and commercial vehicles.
While the company's global footprint remains broad, its recent performance reveals substantial pressures from shifting consumer demand and macroeconomic forces.
Business Model, Competitive Position and Macroeconomic Context
Stellantis' strategy has combined scale economies, platform sharing, and diversified brand portfolios to manage costs and compete globally.
Historically, this model enabled strong cash flows and profitability, particularly when combined with FCA's North American earnings and PSA's European engineering efficiencies.
​
​
However, the global auto industry is in flux.
Periods of elevated interest rates, slowing economic growth in Europe and the United States, and uncertainties surrounding EV adoption have weighed on consumer demand.
Competition from Chinese EV manufacturers, who benefit from cost advantages and government support, has further pressured legacy automakers' margins.
These macroeconomic and competitive headwinds are central to understanding Stellantis' recent performance downturn.
Stellantis in Italy and the PMI Ecosystem
The origins of Stellantis trace back to Fiat, which has played a defining role in Italy's industrial and economic development throughout the twentieth and early twenty-first centuries.
For decades, Fiat was the largest industrial employer in the country and the anchor of a vast network of suppliers, many of them small and medium-sized enterprises (PMI).
These PMI specialized in parts, subassemblies, and engineering services, relying heavily on contracts with Fiat for a significant share of their revenues.
​
The restructuring of automotive production across Europe, combined with Stellantis' recent output reductions, has materially impacted these supplier networks.
Lower manufacturing volumes in Italian plants, particularly in classical Fiat hubs such as Mirafiori, Pomigliano, and Melfi, have reduced orders for components and services.
The resulting contraction has strained many regional industrial ecosystems, with some firms reporting cash-flow pressures, layoffs, and capacity underutilization.
​
These dynamics highlight a deeper structural challenge: the Italian economy remains deeply tied to automotive production, making it vulnerable to downturns in demand.
With Stellantis revising product plans and cancelling or delaying several EV platforms, many PMI now face reduced production cycles and uncertainties over future contracts.
This compound effect underscores the risk to local employment and regional GDP tied to automotive activity.
Recent Financial Performance
Over the past few years, Stellantis has undergone a marked transformation in financial performance, shifting from post-merger expansion and record profitability to a sharp deterioration in revenues, margins, and cash flows as macroeconomic conditions and strategic execution challenges intensified.
​
2021: First Full Year After the Merger
​
2021 represented the first fully consolidated year after the FCA-PSA merger. Stellantis generated approximately €149 billion in revenues, benefiting from global demand recovery after the pandemic and early cost synergies. Profitability improved significantly, supported by strong pricing and platform integration, establishing a solid base for future growth.
​
2022: Consolidation and Margin Expansion
​
In 2022, revenues increased to around €179.6 billion, driven by improved volumes and favorable mix effects. Operating income expanded as Stellantis leveraged scale efficiencies and disciplined cost control. The company strengthened its competitive position while continuing to invest in electrification and new product platforms.
​
2023: Record Performance
​
2023 marked Stellantis' strongest year since the merger. Net revenues reached €189.5 billion, while net profit rose to €18.6 billion and adjusted operating income to €24.3 billion, implying a margin of 12.8 percent.
Industrial free cash flow was robust at €12.9 billion, allowing significant shareholder distributions through dividends and buybacks. This performance reflected operational discipline and resilient demand across core markets.
​
2024: Sudden Reversal
​
The positive trend reversed sharply in 2024. Revenues declined by about 17 percent to €156.9 billion, as shipments fell due to inventory corrections and product gaps. Net profit dropped to €5.5 billion, while margins compressed to 5.5 percent. Industrial free cash flow turned negative at around €6 billion, signaling pressure on both profitability and working capital management.
​
2025: Ongoing Weakness and Reset
​
Weakness continued into 2025. First-half results showed revenues down roughly 13 percent year-on-year, with operating margins falling close to break-even and cash flows remaining negative. The company entered a strategic reset phase, focusing on resizing EV investments, reducing costs, and stabilizing production volumes.
​
Overall Interpretation
Stellantis' financial trajectory highlights a classic cycle: rapid post-merger expansion followed by stress from macroeconomic tightening, slower EV adoption, competitive pressure, and execution risk. The contrast between record performance in 2023 and contraction in 2024 and 2025 explains both investor caution and the volatility observed in the company's market valuation.
The €22.2 Billion Write-Down
In February 2026, Stellantis reported a €22.2 billion write-down related to EV product adjustments and strategic realignment, citing overestimation of EV market growth and misaligned execution.
Much of the charge reflects adjustments to product plans and scaling back EV programs that no longer align with current demand patterns.
CEO Antonio Filosa acknowledged the misjudgment of consumer readiness for EVs, especially in key markets.
​
A significant element of this strategic realignment was the decision to sell Stellantis' 49 percent stake in the Canadian battery joint venture NextStar Energy to LG Energy Solution.
This battery manufacturing facility, located in Windsor, Ontario, was originally developed to support EV production in North America but has been restructured under LG's full ownership to broaden its focus to energy storage systems alongside automotive batteries.
Stellantis will remain a key customer but will no longer bear the full capital burden of owning the facility directly.
​
The impact on the income statement was immediate and severe.
Non-cash charges dominated the €22.2 billion adjustment, but the company also expects around €6.5 billion of cash outflows over four years associated with project cancellations and supply chain resizing.
The company also suspended its dividend for 2026, breaking a long tradition of annual payouts, as it prioritizes balance sheet stability amid the restructuring.
Conclusion and Future Outlook
Looking ahead, Stellantis' strategy emphasizes targeted investments in markets and product lines where it retains competitive strength, including SUVs, pickups, and hybrid offerings, while right-sizing its EV exposure.
Macroeconomic conditions remain challenging, but improvements in inventory levels, new model introductions, and stabilization in North America offer potential catalysts for recovery.
​
Analyst sentiment toward Stellantis is broadly mixed, with a consensus rating in the Hold category.
Recent data shows an average price target of approximately $11.67, implying significant potential upside from depressed current share levels, but also reflecting caution among sell-side analysts.
Citi has maintained a Hold rating with a target price of around $10.45, signaling that the bank expects a protracted recovery rather than an imminent breakout.
Other brokerages have diverged: Jefferies lifted its rating to Buy with a higher target price of €11.50, citing early signs of operational recovery, while some firms and rating agencies have expressed concerns about profitability and turnaround execution.
​
For investors, Stellantis represents a value stock with potential upside if execution stabilizes and market demand rebounds, but with elevated risk until profitability and cash flows return to more stable territory.
​
In conclusion, Stellantis is navigating a pivotal transition shaped by structural shifts in automotive demand, competitive pressures, and significant financial adjustments.
Its current market valuation reflects these risks, and while there is meaningful upside potential under favorable scenarios, investors should be mindful of continued earnings volatility and macroeconomic headwinds before positioning for the long term