Stellantis announced a pause in production at its assembly plant in Mexico, causing shares to plummet 27% in European trading. The company expects a 22-billion-euro hit from a business reset, hinting at a pull-back from its electrification push. Other French auto stocks also fell on Friday.

Stellantis CEO Antonio Filosa stated that the charges announced reflect the cost of overestimating the energy transition and poor operational execution. The company plans to govern its electrification journey based on demand rather than command. Stellantis anticipates a net loss for 2025 and suspended its dividend for 2026.

Stellantis will raise up to 5 billion euros by issuing hybrid bonds to help preserve its balance sheet. The company aims for a mid-single-digit percentage increase in net revenue and a low-single-digit increase in adjusted operating income margin for 2026. Stellantis has taken actions such as investing $13 billion in the U.S. and adding 5,000 jobs.

Stellantis’ writedown follows hits at rivals Ford and GM related to EV pullbacks. UBS analysts expect a negative share-price reaction but find the stock attractive as a potential U.S. “comeback” play. Stellantis will offload its stake in NextStar Energy, part of its broader electrification strategy.

Stellantis has been struggling with falling sales and disappointing earnings. The company has faced challenges in navigating the shift to electric vehicles. Stellantis is set to present an updated long-term strategy at its Capital Markets Day in May. Russ Mould from AJ Bell questions whether Stellantis’ frustration over EV sales is linked to market issues or consumer preferences.

Read more at CNBC: Stellantis $26 billion hit overhauling its business