Stellantis (STLA) reported a massive charge of 22 billion euros ($25.94 billion) as it resets its EV business.

Cash payments of 6.5 billion euros ($7.7 billion) will be paid out over the next 4 years, and charges totalling 14.7 billion euros ($17.34 billion) will be taken against the company’s 2025 second half results, Stellantis said. The charges won’t impact Stellantis adjusted operating income (AOI), however.

“The charges announced today largely reflect the cost of over-estimating the pace of the energy transition that distanced us from many car buyers’ real-world needs, means and desires,” Stellantis CEO Antonio Filosa said in a statement. “They also reflect the impact of previous poor operational execution, the effects of which are being progressively addressed by our new Team.”

Stellantis stock tumbled 25% in premarket trading.

"The charges come at a cost, a very needed reset," Filosa added on a conference call with analysts. "It is a strategic, profound, reset."

Cash payments over the next four years are related to cancelling certain products as well as some ongoing EV products “whose volumes are now expected to be considerably below prior projections,” Stellantis said.

The biggest chunk of the charges are related to re-aligning production plans with customer preferences as well as the impact of new emissions regulations in the US instituted by the Trump administration, which reflect “significantly reduced expectations for BEV products.”

These includes write-offs for cancelled products and impairments to some EV platforms, the company said.

Other charges include changes to EV supply chain like batteries, other non-EV charges like warranty provisions, and workforce reductions in Europe.

As a result of the losses, Stellantis said it will not issue a dividend, and the board has authorized a 5 billion euro ($5.9 billion) non-convertible bond offering to shore up its financing.

Stellantis’s massive write-off comes after GM (GM) took a cumulative $6.6 billon hit from its EV business in December, which followed Ford’s (F) $19.5 billion charge in the same month.

Looking ahead to 2026, Stellantis projects it will improve net revenues, adjusted operating margin, and cash generation compared to last year. The company will issue full financial results on February 26th.

This story is developing, please check back for more updates.

Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.

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