While some automakers have navigated the transition away from internal combustion engines successfully, like electric vehicle trailblazer Tesla (NASDAQ: TSLA), other companies are struggling. The current EV crisis is showing no signs of stopping, and the sector is seemingly faced with a winner-takes-all scenario.
Nowhere is this more apparent than in Europe, where national governments and transnational bodies have resorted to severe tariffs on Chinese EVs in order to protect local markets — although some progress toward a compromise has been made.
Stellantis N.V. (NYSE: STLA) is one of the biggest carmakers in the world, and the second biggest in Europe — and it seems to have gotten the shortest end of the stick. STLA stock reached an all-time high of $28.30 in early March, but it’s been all downhill from there.
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STLA stock has shed 10.56% in value over the course of the last thirty days, bringing year-to-date (YTD) losses to 46.85%. A majority of last month’s losses — 7.19%, to be exact, occurred in a single day. At press time, a single Stellantis share was trading at a price of $12.25.
Let’s take a closer look at what has caused this precipitous drop — as well as the factors that have driven Stellantis’ less-than-stellar performance throughout most of 2024.
Falling sales and CEO resignation drive Stellantis stock slump
Stellantis’ surge to the March all-time high was driven primarily by an ambitious stock buyback program announced on February 15, which will see up to €3 billion spent on reducing the circulating supply of STLA shares.
However, the optimism was short-lived. The company’s Q1 2024 report saw revenue decline by 12% year-over-year (YoY) — in Q2 2024, revenues declined 13.6% compared to the same quarter last year. Finally, the company’s Q3 2024 earnings call, held on October 31, saw the biggest YoY decline in terms of net revenue, at 27%.
The company’s CEO, Carlos Tavares, announced in October that he would retire in 2026 — then, abruptly, on December 1, Stellantis announced that he had resigned effective immediately.
Tavares has widely been criticized as one of the key drivers of Stellantis’ poor performance in the crucial North American market — after the string of bad quarters, a wide shake-up at the company’s C-suite occurred, but the CEO was initially spared.
At present, the future is looking quite grim for the automaker — with such a significant change at the top level of leadership, it’s unlikely that the much-needed course correction will occur soon. Whether or not STLA shares keep losing value remains to be seen — but a move to the upside is still quite a ways away.
Featured image via Shutterstock
