Big 3 automakers take $52.1 billion hit from EV pivot

Core Viewpoint - The automotive industry, particularly the Big Three (Stellantis, Ford, and GM), is undergoing a significant shift away from electric vehicles (EVs) towards hybrid and gas-powered models due to declining EV demand and changing regulatory environments [4][5][15]. Stellantis - CEO Antonio Filosa has shifted the company’s strategy to accommodate gas engines in the Dodge Charger and is discontinuing the base version of its EVs in favor of higher trims [1]. - Stellantis will not release an EV-only Ram pickup, opting instead for an extended-range EV hybrid version, and may cancel existing EV models in Europe and the US [2]. - The company announced cash payments of €6.5 billion ($7.7 billion) over four years and will take charges totaling €14.7 billion ($17.34 billion) against its 2025 second-half results, although these charges will not affect adjusted operating income [3]. - Stellantis has reported a cumulative charge of $26 billion as it resets its EV business, contributing to a total of $52.1 billion in charges across the Big Three automakers [6]. Ford - Ford has pivoted to a hybrid and extended-range EV strategy, resulting in a $19.5 billion charge related to this shift [11]. - The company has canceled the existing form of the Lightning EV pickup and a planned electric commercial van, citing a lack of customer demand [12]. - Despite the significant charge, Ford's stock rose after the announcement, indicating investor acceptance of the strategic reset [12]. - Analysts view Ford's decision as a necessary strategic reset, although it may face challenges if consumer preferences shift again in the future [13][16]. General Motors (GM) - GM continues to invest in EVs, with plans for new models like the Chevrolet Bolt and Cadillac Celestiq, despite facing challenges from declining EV demand and the loss of tax credits [18][19]. - The company took a $6 billion charge in December related to its EV strategy, bringing its total EV write-down to $6.6 billion [19]. - GM is transitioning to include hybrids in its portfolio, investing $4 billion to adapt factories for hybrid and gas-powered vehicles [20]. - Analysts believe GM is well-positioned to navigate the current market due to its operational consistency and diverse portfolio [22][24].