Stellantis adds $26 billion charge to GM’s $6.6 billion and Ford’s $19.5 billion hits; combined losses exceed 2024 annual profits amid policy shifts and demand collapse
The bill for Detroit’s EV miscalculation has arrived. The Big Three automakers General Motors, Ford, and Stellantis have collectively written off $52.1 billion from their electric vehicle strategies, representing an extraordinary financial reckoning with a strategic pivot that promised transformation but delivered losses. Following Stellantis’s announcement Friday of a $26 billion charge from its latest EV strategy restructuring, the combined toll now includes GM’s $6.6 billion hit and Ford’s $19.5 billion write-off, vaporizing billions from what were supposed to be the future-defining investments of Detroit’s automotive establishment.
To put the magnitude in perspective, the Big Three’s combined 2024 annual profits totaled just $34.1 billion. The EV write-offs nearly equal an entire year’s worth of profits for the three companies a staggering financial consequence of strategic misjudgment and market miscalculation.
The write-offs reflect a fundamental shift in how Detroit’s largest automakers now view their EV commitments. Rather than doubling down on electric-only strategies, the companies are retreating toward hybrid and extended-range technologies, effectively admitting that the massive capital investments made on the assumption of rapid EV adoption were catastrophically wrong.
The Policy and Demand Perfect Storm
The EV collapse wasn’t inevitable it was triggered by a convergence of policy changes and demand disappointments that caught Detroit’s strategic planners off guard. The European Union’s decision to scrap its 2035 EV mandate removed a key regulatory driver forcing European automakers toward electrification. Simultaneously, the Trump administration’s rollback of Biden-era fuel economy standards in early December fundamentally altered the American regulatory landscape, opening the door for more gas-powered vehicles.
These policy changes provided cover for what was already happening in the market: softer-than-expected EV demand. The federal EV tax credit, which had provided government support for EV sales in the U.S., expired at the end of the third quarter. That expiration coincided with declining consumer interest in electric vehicles, particularly for higher-end models like Ford’s now-canceled F-150 Lightning a vehicle that represented the automaker’s vision for electrifying its most iconic lineup.
The combination created a perfect storm: regulatory support evaporating, government incentives disappearing, and consumer demand disappointing. The Big Three found themselves holding massive EV investments in a market that suddenly no longer wanted them.
Stellantis Leads the Retreat
Stellantis was Friday’s latest contributor to the EV write-off tally. The most globally positioned of the Big Three reported a massive $26 billion charge as it reset its EV business strategy. Cash payments of 6.5 billion euros ($7.7 billion) will be paid out over the next four years, while charges totaling 14.7 billion euros ($17.34 billion) will be taken against the company’s 2025 second-half results. Notably, these charges won’t impact adjusted operating income a telling detail suggesting the company is willing to absorb these losses to reset expectations.
Stellantis’s strategic changes demonstrate the scope of the pivot. The company previously announced it wouldn’t release its EV-only Ram pickup, instead opting for an extended-range EV hybrid version. The automaker is likely to cancel current EVs on the market, though it hasn’t specified which models will be eliminated. The Jeep Wagoneer S remains its only other EV available for sale in the U.S.
CEO Antonio Filosa, who has been in the role for just over half a year, is aggressively reshaping the company’s vehicle lineup. The once-EV-only Dodge Charger is being reconfigured to accommodate gas engines, with the EV’s base version being eliminated in favor of higher-trim offerings. Most symbolically, the venerable Hemi V8 engine which had been discontinued is now returning to the Stellantis lineup, representing a complete reversal of the company’s prior electrification commitment.
The Strategic Miscalculation
The $52.1 billion write-off represents more than financial losses it’s evidence of catastrophic strategic miscalculation. Detroit’s automakers invested billions on the assumption that EV adoption would accelerate rapidly, driven by regulatory mandates and consumer preference shifts. Instead, they found themselves overcommitted to a technology transition that the market wasn’t ready to embrace.
The Big Three are now caught between competing risks. By retreating from EV investments, they risk being unprepared if electric vehicle demand suddenly increases. By continuing EV investments at scale, they risk throwing good money after bad in a market showing no signs of imminent recovery. The $52.1 billion write-off suggests they’ve chosen the first option a bet that current market conditions will persist.
