Why is Stellantis Facing Legal Probe After $26bn Writedown?

The US law firm Levi & Korsinsky has launched an investigation into Stellantis over potential breaches of federal securities laws.

The probe is focused on whether the carmaker’s prior public statements concerning its electric vehicle (EV) plans were consistent with internal management information.

The firm is examining the period between the Q3 2025 earnings call and a major financial disclosure on 6 February 2026. This investigation follows a record 28% one-day decline in the company’s share price after management acknowledged it had significantly overestimated the pace of global EV adoption.

Overestimating the pace of transition

The 6 February disclosure revealed that Stellantis had over-calculated the speed of the energy transition, leading to a strategy reset.

Antonio Filosa, CEO of Stellantis, said: “Our 2025 full-year results reflect the cost of over-estimating the pace of the energy transition and of the need to reset our business around our customers’ freedom to choose from the full range of electric, hybrid and internal combustion technologies.”

Antonio said that unusual charges reached US$30bn for the year, primarily driven by a scaled-back EV strategy and shifts in regulatory frameworks.

Multi-billion dollar net loss reported

Financial results for the second half of 2025 reflect a US$23.7bn net loss, contributing to a full-year net loss of US$26.3bn. This compares to a US$6.5bn profit in 2024.

The massive deficit is attributed largely to the charges booked during the final six months of the year. These impairments relate to resetting the product plan and the EV supply chain to align with real-world consumer demand.

Net revenues for the year stood at US$181bn, a 2% decrease from 2024, influenced by foreign exchange challenges and pricing declines in the first half of the year.

Corporate milestones of a global giant

• January 2021: Stellantis is formed through the cross-border merger of Fiat Chrysler Automobiles (FCA) and Groupe PSA

• March 2022: The company announces its "Dare Forward 2030" strategic plan to lead the industry in carbon neutrality

• February 2024: Stellantis acquires a 20% stake in Leapmotor to accelerate its global EV footprint and technology access

• January 2025: Antonio Filosa leads a renewed leadership team to navigate challenging market conditions and transition hurdles

• February 2026: The company announces a major strategic reset and a US$30bn charge following slower-than-anticipated EV uptake.

investors invited to discuss legal rights

Levi & Korsinsky is investigating whether public communications accurately reflected the company's internal understanding of its EV assets.

Market pressure had been mounting prior to the disclosure, with Wall Street Zen cutting its rating to "Sell" on 31 January and Morgan Stanley following with a downgrade on 3 February.

The lack of updated guidance following the Q3 2025 earnings call left a gap of more than three months in market communication. Antonio said that the focus for 2026 would be on closing the execution gaps of the past and returning to a path of profitable growth.

Tariff headwinds impact future cash flow

Looking ahead, Stellantis expects US tariffs to add approximately US$1.9bn in costs during 2026. To preserve a strong balance sheet, the board has authorised the suspension of the 2026 dividend and the issuance of up to US$5.9 in hybrid bonds.

Antonio highlighted that the second half of the year showed signs of progress, with top-line growth re-established and a 10% year-over-year increase in H2 net revenues.

Broad powertrain approach for next year

The recalibrated strategy involves a broader powertrain approach to meet customer "freedom of choice".

In North America, the emphasis is shifting back toward internal combustion engine (ICE) and hybrid products, including the Ram 1500 HEMI V8.

Antonio said: “In the second half of the year we began to see initial, positive signs of progress with the early results of our drive to improve quality, strong execution of the launches of our new product wave and a return to top-line growth.”

The company expects to see progressive improvements from the first half of 2026 into the second.