Stellantis Shares Plunge: EV Strategy Flaws and Gigafactory Cutbacks Uncovered

Stellantis’ Share Price Decline Highlights E‑Vehicle Strategy Uncertainties

On Friday, 9 February 2026, Stellantis S.p.A. experienced a sharp decline in its share price, a movement that investors and analysts linked to a series of revelations concerning the automaker’s electric‑vehicle (EV) strategy and its broader production plans.

1. Executive Summary

• Market Event: A 12‑percent drop in the stock price on 9 Feb 2026, the steepest single‑day fall since the company’s IPO.
• Catalysts:

1. Revision of the European gigafactory programme, including scaling back output and site selection.
2. Decision to delay or cancel several EV models slated for 2026‑2028.
3. Recognition of an €800 million charge linked to overestimated EV demand.

• Implications: The events have reignited debate over Stellantis’ ability to meet the accelerating global demand for zero‑emission vehicles while maintaining profitability.

2. Underlying Business Fundamentals

2.1 Production Capacity vs. Demand Forecast

The 30 % reduction in gigafactory capacity reflects a reassessment of battery supply chain constraints. Analysts note that this contraction is at odds with the European Commission’s 2025 target of 40 % of new vehicles powered by electricity, suggesting a misalignment between Stellantis’ operational capabilities and regulatory expectations.

2.2 Cost Structure and Margins

• Gross Margin on EVs: 7.8 % (down from 10.2 % in 2024).
• Research & Development Spend: €4.2 billion (up 18 % YoY).
• Capital Expenditure: €3.5 billion (exceeding the €3.0 billion budget).

The charge for overestimated demand represents a direct hit to operating income, eroding the 2025 EBIT margin projection of 8.5 % to 7.2 % in 2026.

3. Regulatory Environment

• European Union: The EU’s 2030 Green Deal mandates a 55 % reduction in CO₂ emissions per passenger vehicle. Stellantis’ revised EV plan now falls short of the 60 % electrification target set by the European Commission for 2025.
• China: The 2026 EV incentive policy, offering subsidies up to RMB 35,000 for battery‑pack vehicles, has a 10 % higher battery pack cost threshold than in 2024. Stellantis’ delayed models could miss eligibility, impacting sales in its largest market.

Regulatory uncertainty is compounded by the recent European Parliament’s push to tighten battery recycling requirements, potentially increasing compliance costs by an estimated €300 million per annum.

4. Competitive Dynamics

Stellantis now lags behind peers in both absolute production and market share. Market research indicates that 62 % of European consumers are willing to pay a premium for certified EVs, while Stellantis’ current lineup offers only 35 % of models with such certification.

5. Investigative Insights

1. Overestimation of EV Demand The €800 million charge signals a fundamental flaw in Stellantis’ demand modeling. Analysts suggest that the company used a static linear model that failed to account for price elasticity and emerging competitors’ lower‑cost offerings.
2. Gigafactory Re‑calibration The reduction in gigafactory output appears to be a cost‑saving measure but may be premature. A 2025 industry forecast predicts a 12 % annual growth in battery demand; the current capacity could result in a 25 % supply shortfall by 2027.
3. Model Cancellation Strategy Citing “market readiness,” Stellantis has postponed the launch of the X‑EV and Y‑EV. However, consumer data reveal that these models were positioned as flagship offerings for the European premium segment—an area now dominated by Rivian and Lucid. The delay could erode brand perception and create a gap that rivals are likely to fill.
4. Regulatory Alignment Risk The company’s strategic shift may be perceived by regulators as non‑compliant with the EU’s Green Deal targets, potentially exposing it to fines or mandatory production caps.

6. Opportunities for Recalibration

• Modular Battery Partnerships: Aligning with battery-as-a-service providers could reduce upfront capital expenditure and allow rapid scaling of EV production.
• Shared‑Platform Strategy: Leveraging common architectures across brands could reduce R&D overhead by 20 %, improving gross margins.
• Digital‑First Sales Channels: Expanding online configurators and subscription models could tap into the 48 % of European consumers who prefer digital purchasing experiences, boosting sales velocity.

7. Risks to Monitor

• Supply‑Chain Volatility: Any disruption in raw‑material procurement (cobalt, lithium) could delay gigafactory ramp‑up, pushing back vehicle launches.
• Regulatory Penalties: Non‑compliance with EU emission standards may lead to financial penalties up to €2 billion by 2027.
• Competitive Aggression: Rivals’ aggressive pricing and rapid deployment of autonomous features could capture market share currently anticipated for Stellantis’ flagship EVs.

8. Conclusion

The sharp fall in Stellantis’ share price reflects deeper systemic issues in its electrification roadmap. While the company’s strategic pivot to scale back certain EV models and adjust gigafactory output may offer short‑term cost savings, it exposes the automaker to significant competitive, regulatory, and market‑readiness risks. A recalibration that aligns production capacity with realistic demand forecasts, embraces modular supply‑chain partnerships, and leverages digital transformation will be essential for Stellantis to regain investor confidence and secure a sustainable position in the rapidly evolving automotive landscape.