Stellantis Posts €22B Loss, Reset Plan Puts 2026 Margin Focus

Full-Year Loss Lands, With Cash And Credibility Now Driving The Trade

Stellantis reported its full-year 2025 numbers on February 26, 2026, with net revenues of €153.5 billion, down 2%, and a net loss of €22.3 billion after a large slate of unusual items. The headline €22B loss reframed the near-term equity story away from unit volumes and toward balance-sheet protection, especially after the board suspended the 2026 dividend and authorized up to €5 billion of hybrid bonds to preserve liquidity.

The market reaction was split by time horizon. The stock rose about 5% in Milan trading as investors treated the result as a cleared deck, but the longer-dated valuation still depends on whether management’s reset plan can restore positive operating profit in North America and Europe during 2026.

Unusual Charges Total €25.4 Billion, With €6.5 Billion In Cash Payments

The company said unusual charges reached €25.4 billion for 2025, reflecting a strategic shift that re-centers the product plan around consumer demand and a wider mix of powertrains. Of that amount, about €22.2 billion was tied to the second half, and management expects roughly €6.5 billion of cash payments to be spread over four years starting in 2026, a schedule that directly constrains near-term industrial cash generation.

The mechanics matter for markets because cash timing drives credit metrics. A non-cash impairment can depress reported earnings without draining liquidity, but multi-year cash payments can raise refinancing sensitivity if the auto cycle softens or incentive spending climbs.

Operating Performance Slips, Even As Liquidity Stays Large

On an adjusted basis, Stellantis posted an adjusted operating loss of €842 million for 2025, leaving the adjusted operating margin at negative 0.5%. Industrial free cash flow was negative €4.5 billion, a figure that becomes the key yardstick for whether a turnaround is self-funded or requires more balance-sheet support.

Industrial available liquidity was €46 billion at year-end 2025. That buffer reduces near-term default risk, but the combination of negative free cash flow and a hybrid-bond authorization puts the capital structure in focus for both equity holders and bond investors who track dilution risk, coupon costs, and rating headroom.

Second Half Stabilized Volumes And Cash Burn, Setting A 2026 Baseline

Management pointed to improvement in the second half of 2025 as early evidence the reset is working. Net revenues in the July to December period rose 10% year over year to €79.25 billion, while consolidated shipments increased 11% to 2.82 million vehicles.

Industrial free cash flow in the second half was negative €1.52 billion, described as a roughly 50% improvement versus the first half and a 73% improvement versus the second half of 2024. Those numbers set a base case for 2026, but they also highlight that profitability has not yet returned, with the second-half adjusted operating loss at €1.38 billion.

North America And Europe Remain The Swing Regions For Margin Recovery

North America and Enlarged Europe carry the largest earnings leverage, and both were loss-making on an adjusted basis in 2025. North America net revenues were €61.0 billion and adjusted operating income was negative €1.89 billion, a shift the company tied to mix pressure, higher incentives, warranty estimates, and industrial costs, partly offset by purchasing and manufacturing actions.

Enlarged Europe net revenues were €57.8 billion and adjusted operating income was negative €651 million, reflecting pricing pressure, lower volumes in legacy models, and higher provisions, partially mitigated by purchasing and manufacturing performance. The company said order books in both regions finished 2025 at about three months of sales, a metric investors use to judge whether discounting is clearing inventory or simply pulling demand forward.

2026 Guidance Reaffirms Growth, But Keeps Profit Targets Conservative

For 2026, guidance was reaffirmed with net revenues expected to rise at a mid-single digit percentage rate and the adjusted operating margin expected to be low-single digit. The company also guided to improved year-over-year industrial free cash flow in 2026, explicitly noting about €2 billion of payments tied to second-half 2025 charges, and it expects positive industrial free cash flow only in 2027.

This plan puts execution in focus across product launches and incentive control. The company also scheduled a capital markets day for May 21, 2026, which becomes the next formal checkpoint for how quickly the cost base, quality metrics, and model mix can move margins back into positive territory.

Tariffs Add A Fresh Cost Line For 2026 Pricing And Mix

Trade policy is an additional headwind. Stellantis said it expects costs related to US tariffs to rise to €1.6 billion in 2026 from €1.2 billion in 2025, a swing that can either compress margins or force price actions that risk share loss in competitive segments.

For suppliers, tariff-driven reshoring or sourcing changes can shift volumes across regions. For consumers, higher sticker prices can lift financing stress, increasing the sensitivity of demand to interest rates and monthly-payment affordability.

Tredu Scenario Sets For 2026

Base case: revenue grows mid-single digit and the company delivers a low-single digit adjusted operating margin, with industrial free cash flow improving but staying constrained by the €2 billion charge-related payments in 2026. The trigger is steady order-book depth near three months, paired with lower warranty costs and fewer quality claims.

Upside scenario: North America and Europe return to positive adjusted operating income by the second half of 2026, supported by tighter incentives and stronger mix from new models, while tariff costs are partly offset through pricing and sourcing. The trigger is a measurable improvement in regional profitability and a faster-than-expected move toward positive cash generation ahead of 2027.

Downside scenario: tariff costs and incentives rise at the same time, inventories rebuild, and the company remains cash-negative through late 2026, raising the probability of larger hybrid issuance or further balance-sheet actions. The trigger is weaker demand in North America or Europe that forces higher discounting and delays margin recovery.