Stellantis NV is taking more than €22 billion ($26 billion) in charges mainly linked to reversing course on its electric vehicle strategy, prompting a record plunge in the Jeep and Fiat owner’s shares.

The writedowns, much of which will cover the cost of canceling EVs and compensating suppliers, exceed the impairments Ford Motor Co., General Motors Co. and Porsche AG have announced in recent months.

Stellantis’ shares were 27% lower at 2:33 p.m. on February 6 in Milan, wiping just under €6 billion off the company’s valuation, to below €18 billion. The charges significantly exceeded analyst projections while the company’s preliminary earnings for the second half disappointed. 

Stellantis Chief Executive Officer Antonio Filosa blamed predecessor Carlos Tavares for going all-in on EVs and failing to respond to shifts in the marketplace.

The moves “largely reflect the cost of over-estimating the pace of the energy transition,” Filosa said in a statement. The reset shows “the impact of previous poor operational execution, the effects of which are being progressively addressed by our new team.”

Carmakers have been struggling to respond to sluggish EV demand as the Trump administration removes incentives, the European Union softens pending sales mandates, and Chinese brands gain market share in much of the world. Now some of them are turning back to combustion engines to try to regain ground, requiring costly restructuring programs.

Filosa, who took over in June, is trying to overhaul the company while mitigating the rising cost of U.S. President Donald Trump’s tariffs. The announcement on February 6 is meant to help the company move beyond a tumultuous period under Tavares, who had presided over a profit and sales plunge in Europe and the U.S.

The slump stems from buyers balking at price increases, gaps in Stellantis’ lineup, and quality problems. Tavares had pledged to sell only electric vehicles in Europe and 50% EVs in the U.S. by 2030, targets the company walked back shortly after his ouster in late 2024. It’s also adjusting its battery-making footprint to account for lower demand.

The manufacturer is not alone in tallying the cost of adjusting to slower-than-expected EV sales. Ford in December said it would take $19.5 billion in charges tied to an overhaul of its electric-car operations. Writedowns at rival General Motors have risen to $7.6 billion. And Porsche AG reduced its outlook four times last year as it pares back its EV ambitions.

The charges announced February 6 will impact the second half of the 2025 financial year but not adjusted operating income. Stellantis won’t pay out a dividend this year.

The company’s writedown is “massive but it was a necessary step,” said Pierre-Olivier Essig, an equities analyst at AIR Capital.

As part of his overhaul, Filosa has vowed to invest $13 billion in the U.S., where the company delayed EVs and brought back V8 engines to reinvigorate the Ram truck brand. He also scrapped some investments including a planned hydrogen joint venture and has been slashing prices to claw back market share.

Stellantis is estimating a net loss of as much as €21 billion for the second half of 2025. For this year, it’s projecting a low single-digit operating margin, which includes tariff-related expenses of around €1.6 billion. The company plans to issue as much as €5 billion in bonds to shore up its balance sheet. Stellantis is due to report detailed full-year earnings on February 26.

Second-half preliminary results were weighed down by some items including warranty charges, the company said, resulting in the adjusted operating margin falling below a guided low-single digit range. Stellantis, which confirmed it would meet its goals for 2025 as recently as early December, didn’t specify the degree to which it missed. 

The automaker also announced it’s leaving a joint venture with South Korean battery maker LG Energy Solution Ltd. in Canada. In 2022, Stellantis said it would invest over C$5 billion ($3.7 billion) with LG Energy to establish the first large-scale EV battery plant in Windsor, Ontario. LG is buying out Stellantis’s stake.

Filosa will present his new strategy to investors on May 21. Improving sales in the U.S. is key to a turnaround, with Jeep planning to introduce several new or refreshed vehicles this year.

As the announcement on February 6 didn’t include factory closures, the company’s cost base may not yet be low enough to account for its market share losses, Citi analyst Harald Hendrikse said in a note.

“Any upside to Stellantis most likely feature capacity reductions to fully reset the North America and European businesses,” he said.