Stellantis Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
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👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
👉 Clear answers to your questions
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👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $19.36b | Revenue (TTM) = $228.37b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $39.57b | Revenue (TTM) = $228.37b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
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Stellantis Stock Analysis
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Stellantis Events
Past Events
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JUL
30
Q2 2026 Earnings Call
about 2 months ago
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MAY
21
Analyst/Investor Day - Stellantis N.V.
4 months ago
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APR
30
Q1 2026 Earnings Call
5 months ago
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FEB
26
Q4 2025 Earnings Call
7 months ago
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FEB
6
Stellantis N.V., H2 2025 Guidance/Update Call, Feb 06, 2026
7 months ago
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DEC
4
Goldman Sachs Industrials & Autos Week
10 months ago
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OCT
30
Q3 2025 Earnings Call
11 months ago
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StocksGuide Free
Stellantis — Q2 2026 Earnings Call
1. Management Discussion
Hello, and welcome to the Stellantis Q2 2026 Financial Results Call. [Operator Instructions] I now give the floor to Mr. Charles Christman, Head Investor Relations, to begin today's conference. Sir, the floor is yours.
Thank you. Hello, everyone, and thank you for joining us today as we review the Stellantis Q2 2026 results. Earlier today, the presentation material for this call, along with the related press release were posted under the Investors section of the Stellantis Group website. Today, our call is hosted by Antonio Filosa, Chief Executive Officer; and Joao Laranjo, Chief Financial Officer. After their prepared remarks, Antonio and Joao will be available to answer questions from the analysts. Before we begin, I want to point out that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement included on Page 2 of today's presentation. As customary, the call will be governed by that language. Now I will hand the call over to Antonio Filosa, Chief Executive Officer of Stellantis.
Thank you, Charles. And thank you all very much for joining us today as we discuss our quarter 2 results. Our second quarter execution and financial performance reflect the meaningful progress that the team and I have been focused on delivering over the last 12 months. All key financial metrics are significantly improved year-over-year. Net revenues are up 13% and AOI margin is up 120 basis points. Industrial free cash flow is positive EUR 1 billion, up EUR 1 billion compared to last year. This year-over-year improvement gives us confidence in our full year '26 financial guidance, which we are reaffirming again today including our expectation that we will have positive industrial free cash flow in 2027.
We set out our Fastlane 2030 strategy and its financial targets at our May 21 Investor Day. And this quarter 2 results demonstrate that we are very much on track in our journey towards those targets. In quarter 2, we made strong and significant progress on industrial execution. Through the good work of our operating teams, we have stabilized production and are running our plants much more efficiently. Year-over-year, overall production efficiency was improved 870 basis points in North America and 170 basis points in Europe. We also kept improving quality with 3 months in service quality, improving 38% in North America and 24% in Europe. And we are making encouraging daily progress in the implementation of our value creation program, VCP.
And as we shared with you at Investor Day, partnerships are a key pillar of our fast line 2030 plan. The announcements we made give you a strong sense on how attractive Stellantis is as a strategic partner, both to other OEMs and to leading names in the tech space. We are also making good progress with the execution of our large-scale new product line. One of the key strategies in our first-lien 2030 plan is to invest in our brands, invest in our products and expand market coverage.
In line with this plan, we are excited that we have introduced all new RAM 1500 DRx SRT, the DS #7 and the Panda ICE H1. Alongside the 6 refreshed vehicles, including Opel Astra, Cibaca and Pago 408, which is gaining strong momentum in Turkey. The Ram daCoda introduced in Brazil in early '26 is also delivering strong sales performance in the region's largest profit pool. We look forward to the 9 remaining new and refreshed vehicles still to come this year, and we are laser focused on executing every 1 of these launches on time with the right cost and with the right quality.
Now let me touch on some Q2 highlights from a regional perspective. In North America, -- we keep making significant progress in improving performance powered by our great brands, our great products and our great people. Sales in quarter 2 were up 6% year-over-year for a fourth consecutive quarter of year-over-year gains. Ram was up 12% year-over-year. Chrysler was up 54% with the launch of the new Pacifica and Jeep Grand Bagonir also posted significant gains. Overall, market share was up 40 basis points in North America including 50 basis points in the U.S., Canada market share was also slightly up and Mexico with its strongest second quarter on record.
Let me share a few highlights on Ram. The Ram 1500 was a key driver of both volume growth and profitability in the quarter with strong demand for the reintroduction of the legendary MEV 8 engine. Building on that momentum, -- we are now shipping the highly profitable Ram 1,500 TRX SRT to customers, just 6 months after its a billing. This is the first off-road product from our SRT Performance division, which we relaunched only 1 year ago. This product follows the Dodge Durango SRT launched in December '25. And the SRT Masco truck, the Ram Rumbold, arrives later this year, right on plan.
As we presented during Investor Day, SRT brings unique capabilities and the powerful halo effect across all our lineup while delivering margins from 2 to 3x higher than comparable non-SRT variance. Still on the product side. We have the upcoming Jeep Recon BEV and the Jeep Grand begone REV launch coming this year. Now a few words also on our U.S. dealer inventory. The increase in June was the result of a proactive decision to support new product launches and powertrain offerings such as the Ram hemis for instance, ahead of the sale that we expect to achieve in the coming months. It was also driven by a temporary buildup in advance of our planned summer production shutdowns. Based on preliminary sales rates in July, we expect that in July, you will see inventory already reduced it from June levels.
Turning to Europe. Growth in Europe was driven by strong demand for smart card platform nameplates such as Citroen C3 and C3 aircrafts, Opel Frontera, Fiat Grand Deana. Resulting in a 3% year-over-year increase in Stellantis brand sales in quarter 2, including LIP model, sales were up 7% year-over-year supported by the success of the T03 and the B10. This growth also reflects the acceleration we are seeing in the European passenger car BEV markets. where Stellantis BEV sales increased by 20% year-over-year by 61% year-over-year when including LEAP model.
In light commercial vehicles, our Pro 1 division maintained the #1 position in the Euro with over 28% market share. The ongoing product of fancy Europe will further strengthen our growth drivers. First, through the expansion of the Smart car portfolio with the upcoming Fiat Grizzly and Fiat Fast back. We will also have a broader coverage of the C SUV segment with the new GP Compass for [indiscernible] as well as the recently launched the DS #7 and the upcoming Lancagamma.
Finally, LEAP represents another important growth leader and keeps gaining commercial momentum. Quarter 2 '26, sales decreased 6-fold year-over-year making LEAP motor the fifth largest Chinese automotive brand in the region. Turning to South America. We maintained our clear overall leadership position in the region. We are #1 in the region's 2 major markets with over 26% market share in both Brazil and Argentina. We also further saddened our leadership in Picastrack in Brazil. 1 of the region's largest profit pool, with rent sales increase by 10% year-over-year.
Moving now to Middle East and Africa. We delivered the resilient results in a declining market with market share increasing 20 basis points despite an 8% decline in total industry volumes. The region achieved the #1 position in light commercial vehicles and maintain its #2 position overall. Lastly, in APAC. June deliveries reached a 6 [indiscernible], and we have localized LEAP model-branded vehicle assembly Malaysia for C10 with the Bitnlaunch on track for the third quarter. We also announced that the partnership with Dongfeng to develop and manufacture Pago and GV models in China.
So in summary, we are continuing the positive trend of quarter 1 with significant year-over-year improvements in all financial metrics. And our strong disciplined execution keeps driving significant improvements both in quality and industrial efficiency. Let me now you to Joao to walk you through the numbers. Joao?
Thank you, Antonio. Good afternoon and good morning, everyone. Q2 was another quarter of year-over-year improvement, in line with our full year guidance for 2026. Let me start with the key financial figures. Consolidated shipments were 1.6 million units, up 10% year-over-year, with growth driven by North America and Europe. Net revenues were EUR 43.5 billion, up more than EUR 5 billion or 13% compared to Q2 of last year. This improvement was driven mainly by the higher volume in North America, which was up 122,000 units year-over-year. Adjusted operating income was EUR 773 million in Q2, improving by EUR 560 million compared to Q2 of last year.
AOI margin was 1.8% and representing a 120 basis point improvement year-over-year. The key drivers of the year-over-year AOI improvement were volume mix had a positive impact of EUR 376 million, reflecting higher shipments in North America and Europe. Mix was unfavorable, mainly due to LED penetration in Europe partially offsetting the volume improvement. Net pricing was negative EUR 456 million, mostly driven by pricing in Europe. Industrial costs improved by more than EUR 1.9 billion. This was driven by 3 main factors. First, we continue to improve our operational execution, manufacturing efficiencies and purchasing savings, including those related to VCP more than offset increased raw material and tariff headwinds. Second, we had no repeat of prior year warranty costs from recall campaigns in Europe. Finally, the reduction of regulatory expenses in North America. SG&A costs increased by EUR 317 million, largely reflecting higher market expenses to support volume growth.
Lastly, Foreign exchange and other had a negative impact of EUR 861 million, driven mainly by the Turkish lira devaluation, the nonrepeat of indirect tax credit in Brazil in the back of lower residual value in the used vehicle business. Moving to industrial free cash flow. Industrial free cash flow was positive EUR 1 billion in Q2 an improvement of EUR 1 billion year-over-year. The improvement was driven by 3 factors: first, higher AOI. Second, positive seasonal working capital dynamics associated with higher Q2 volumes. Third, a lower run rate of CapEx and R&D spending during the quarter. The time of these investments remains fully aligned with our FaSTLAne product plan and is reflected in our full year guidance.
We continue to expect full year CapEx in R&D spending to be 6.5% to 7% of net revenues. These benefits were partially offset by provisions, including approximately EUR 300 million of cash outflows related to H2 2025 charts. Now looking at inventory. Total inventory increased 20% year-over-year to 1.4 million units. The increase primarily reflects the launch of new and refreshed vehicles and power 3 offerings and is consistent with our expectations for sales growth.
As Antonio noted, dealer inventory also includes a temporary buildup ahead of the customary summer production shutdowns. As a result, we expect July inventory levels to be meaningfully lower than those recorded in June. Turning to our regional performance. North America delivered AOI of EUR 284 million, with an AOI margin of 1.6%, representing a year-over-year improvement of EUR 724 million. This is mostly driven by higher volume, including the around 1,500, Jeep Grand Vagon, Bongo ICE and the Chrysler Pacific. Shipments were up 38%, driven as we have already noted, by the launch cadence of our new products and build ahead in advance of the preplanned summer shutdown. It was also driven by year-over-year improvement in industrial costs and the reduction of regulatory expense.
In Europe, AOI was negative EUR 94 million, an improvement of EUR 265 million year-over-year. The region continues to experience pricing pressure which partially offset the positive impact of improving manufacturing efficiency and purchasing costs in the nonrepeat of EUR 474 million of recall campaign costs in 2025. In South America, we delivered AOI of EUR 402 million. Volume was down slightly year-over-year, with a decline in Argentina, more than offsetting gains in Brazil. The performance of the region remains resilient despite a challenging market and increasing competition.
The AOI was in line with prior year, excluding the nonrepeat of EUR 334 million of indirect tax credits in Brazil. In Middle East and Africa, we grew market share and delivered an AOI of EUR 329 million. These strong results were achieved despite the ongoing regional conflict, which resulted in an 8% decline in total industry volumes. In Asia Pacific, AOI was up 35% to EUR 27 million, with industrial cost improvements more than offsetting foreign exchange headwinds.
Looking ahead to the rest of the year. As previously stated, we are reaffirming our 2026 guidance as well as our expectation of achieving positive industrial free cash flow in 2027. Before concluding, I'd like to share a few observations regarding the remainder of the year. Our guidance assumes net expenses of EUR 1 billion to EUR 1.2 billion, including the impact of the IAPA credit recognized in Q1. This represents a modest improvement from the EUR 1.3 billion previously communicated.
Our industrial free cash flow guidance also reflects approximately EUR 2 billion of payments related to H2 2025 charts, of which EUR 0.9 billion was paid during the first half of 2026. We CapEx and R&D spending are expected to be 6.5% to 7% of net revenues in 2026, consistent with the approximately 7% outlined in FaSTLAne plan. In the second half, we expect financial performance to be weighted towards Q4. Q3 will be impacted by the summer shutdown and continued raw material inflation, while Q4 is expected to benefit from higher volume and a stronger ramp-up of VCP initiatives. I will now turn it back to Antonio to wrap up before the Q&A.
Thank you, Joao. Before we move to the Q&A, I would like to step back and reflect on the big picture. I hope all of you either had the opportunity to attend our Investor Day or to view the presentations online. You will see that our FaSTLAne 2030 strategy addresses in a structured way, the core issues that we face as a company and capitalizes on our biggest opportunities. We are fully focused on executing our plan, which will deliver significant benefits as we build a stronger Stellantis for the future. Nothing can be fixed overnight but I would like to highlight 3 items that are our top 3 priorities. First, market coverage, discontinued products from '21 to '25 led to a reduction in our market share, both in North America and in Europe. You have seen early progress in our market share gains this year. FaSTLAne 2030, Reinvigorate the product portfolio getting us to around 90% market coverage in both regions, representing a huge opportunity for growth.
Second challenge, industrial cost. We have improved significantly in the past year, and this remains a big opportunity to drive our financial performance. In FaSTLAne, VCP will deliver EUR 6 billion of annual run rate cost reductions by '28. We are making strong initial progress on VCP and we are on track to implement 40% of the initiatives by the end of this year. This means that in '27, we expect to enjoy EUR 2.4 billion of AOI benefits plus the partial benefits of the initiatives we implemented in '27.
Finally, quality. Our execution on quality in the past was not what it needed to be but we have come a long way already in the last year. Quality has improved significantly by 38% in North America and by 24% in Europe. And FaSTLAne 2030s given the quality organization, the focus and the resources they need to be in the top quartile in all regions and segments where we compete by '28. It will take time to fully capitalize on these opportunities, but it is a time frame that is fully embedded in our '26 guidance in our expectation of positive industrial free cash flow in '27 and in our '28 FaSTLAne targets. The road is long, but we are moving in the right direction with the right priorities and with the right pace. Thank you. We will now ask the operator to open the line for questions.
[Operator Instructions] And the first question comes from the line of Stuart Pearson from Oxcap Analytics. Stewart, we can't hear you. Maybe you're on mute. Your line is open. .
2. Question Answer
Hopefully, you can hear me now, my mistake. Too many calls today. I guess we have to start with North America and the lack of operating leverage there. Obviously, very strong shipments coming in. Obviously, we've seen, I guess, our expectations another weak margin there despite cost support. So I mean can you just dig into a little bit more -- why we're not seeing that? Is it pricing that's really eating into that whichever bucket in the bridge that might really fall into? And what would it really take to get those North America margins up? And what are the building blocks I guess, into 2027 that can give us some confidence on that.
And I guess 1 of those just sort of partly self-host, I guess, is going to be the industrial cost driver. There's obviously a huge benefit there at EUR 1.9 billion. And obviously, it seems reserve credits of that. But maybe you can help us understand what's really in there. What are the examples of actions that try kind of cost tailwind in the second quarter? And should we expect or what rate should we expect that to continue in the second half and end into 2027. I know you've talked about the VCP plan. But could we take the H1 run rate or at least most of it and extrapolate that?
Okay. I will take part of this question, and then I will pass to Joao rest. So what is happening in North America is, number one, the trajectory is the right one. The trend is the right one. So if we compare AOI of Q2 versus AOI Q1 net of IPA refund, then we see a significant and meaningful improvement as we see an improvement in shipments in market share, for instance. Now it's important to say to repeat what I just mentioned at my closing remarks. We have a plan, partly in 2030. It is a good structural than articulated plan and this plan addresses in North America and globally, the 3 major challenges that we see in our company. One of those is industrial costs. We have an industrial cost gap and we are addressing that daily with VCP.
And VCP will deliver, as mentioned, EUR 6 billion of cost saving run rate in '28. We are on track to fully implement 40% of the initiatives that we have identified and they are many by the end of '26. That means that we -- '26 will enjoy in of cost savings plus all the extra that will come from the additional initiatives that we really executed in '27 itself.
So you asked some tangible example. So VCP, when it comes to cost worth mainly on major driver in our cost structure. One is material costs, this is the cost of component and system we use in our cars. And here, we have to leverage the purchasing leverage to negotiation and the technical leverage to implementation of technical savings. And those technical savings for instance, new technologies that represent the same or better performances of our products with lower cost, for instance, with material that keep the performance of the product where they are, but they represent the containing, et cetera, et cetera.
The second driver is transformation cost. This is the cost of our manufacturing system in our plans. And on there, we have tons of projects to improve efficiency. This is why our efficiency in our plants in North America is consistently and meaningfully improving since last year. So you see that today, our efficiency run in around 89%, which is a very good result, and that represents 870 basis points better than prior year. Here, the projects are really thousands. The third driver of cost that VCP addressed to projects and initiatives is logistics and distribution costs. And in this case, also the projects are many -- for instance, we are optimizing our routing from suppliers to plants and for plants to the yards. We are increasing the loading of our logistic tools, thus saving cost.
Or simply, we are combining warehouses or we are shutting our warehouses, and we are putting that space in our plants. And this is the third driver of efficiency that VCP will address. Again, with the objective this year to fully implement by the end of '26, 40% of the main initiatives mapped that will deliver EUR 2.4 billion of AOI savings improvement in 2027. And then the EUR 6 billion in '28 as a run rate. And Joao, do you want to take the rest of the question?
Yes. So from the industrial cost of EUR 1.9 billion, slightly more than 70%, about EUR 1.4 billion. it's split between purchasing material cost savings and warranty. On the warranty, the largest piece, it's the recall recorded in future last year in Europe. So most of that is because of the nonrepeat. On purchasing, it's the work that we are doing to reduce product cost as we have discussed in the Investor Day. And that is a number that we will continue to see it improving and accelerating as we evolve with VCP. The other items that are also included on the industrial costs to give context, our logistic costs and manufacturing, which we also saw improvements given the meaningful forms improvement at our plants, as Antonio mentioned on the opening remarks. .
And we also see benefits on manufacturing costs because of the higher volume. So there's items that are temporary and also depends on the competitors year-over-year but we should expect to see material cost savings to continue to progress in the second half and beyond. And just to also remind that we expect that raw material continues to be a headwind and growing in the second half versus what we saw in the first half, including Q2 but yes, we see a lot of positives on the industrial costs and especially on the material costs, and we expect to build momentum on that.
And sorry, on the operating leverage side in Q2 in North America just because EUR 400 million volume and mix implies there's quite a negative mix in there, I guess, in Q2. Is that fair? In North America, sorry.
No, the mix was not very negative. Some of that is chain and product content. But the operating leverage of Q2 is consistent with the margins that we have had on the previous quarters. Then Antonio's point, we that is a gradual exercise that we're going to improve as we work on costs and also on warranty. But there was nothing -- anything exceptional to so that is bringing the operating leverage in North America other than the challenges that we have in cost and quality that Antonio already mentioned.
The next question comes from the line of Tom Besson from Kepler Cheuvreux.
I have a question about the shape of H2, you're coming out of relatively easy comps in terms of volumes in the first half, it becomes a bit more difficult in the second. Could you help us understand exactly what you're aiming for in terms of quarter-on-quarter or H1 -- H2 and H2 improvement? Are you going to try to improve on the reported minus 1.7% AOI H2 last year? Or -- are you going to try to improve on the 0.9% underlying AOI if we excluded the EUR 2.1 billion unusual item that you couldn't remove in the second half of last year? And what will be the drivers of improvement as it will be less driven by volumes and as you will face more headwinds from raw materials. .
Yes. So the our targets for H2, it should deliver the best results possible, aligned with the full year guidance. So we are not setting any specific targets for the H2 on this call. The dynamics that we're going to see on the -- that we expect to see in the second half. That's the first half its a headwind of about EUR 1 billion between raw material and then the non-repeat IPA recognized in Q1. And volume should be lower as we saw, we built up inventory in the first half, and we expect Antonio mentioned, to reduce inventory in the second half. But then we expect to see positive mix, we expect price to be constructive, especially in North America, and we expect to continue to make progress on cost reduction. So those are the puts and takes for the second half versus first half performance.
Can I add a follow-up, please. .
Yes, please. .
Okay. Great. On the North American business, to follow up on Stuart's question your truck mix has been extremely strong. in H1, and we still don't see a lot of traction. Could you help us understand what is still -- I understand your costs are not where I would like to be quality is not perfected -- what are the main negative drivers to your NAFTA margins? Is that channel mix? Is that relative pricing as well? Or is it just your industrial costs and some remaining quality issues. .
Yes. So I will take this question, and then I will pass Joao for additional info. So -- as I mentioned in my closing remarks, our plan, which is a good plan, addressing time the major challenges that we see, right? And holding on North America, for sure, we have a quality gap that translates into warranty cost and campaign costs. And this is have been addressed with a very vast quality turnaround plan, which on the new product is already delivering a much improved product quality, [ 18% ] improvement in 3 months in service year-over-year and then the second challenge that the plan address is a cost gap, as you mentioned, which we are addressing with VCP with the trajectory that I already stated EUR 2.4 billion to start in '27 plus all the additional initiatives that we'll implement in '27, up to EUR 6 billion cost saving run rate in '28 and forward.
Those are the 2 things that FaSTLAne address in North America and globally at the pace and in time, which is already embedded in all our targets. In the '26 financial guidances that we reaffirm in the '27 free cash flow positive that we reaffirm and in '28 targets that we distributed in FaSTLAne 2030. The notion of time and the time frame needed is already embedded in the plan and we are executing and delivering as we showed in quarter 2 accordingly to the plan. We are on track. Joao?
I don't have anything else to add on. .
The next question comes from the line of José Asumendi from JPMorgan. .
Antonio, just 1 question, please, again on the North America margins. And I'm just wondering, is there a very large opportunity to increase the utilization, the loading of our plants in North America, which then in turn would unlock VCP cost savings, right? But then when I think about this, you need to win market share in the U.S. unit increase production by, let's say, 150,000 units from here, right? I mean, when I look at the capacity of your business and compare it few years from now, there's a very large opportunity to increase production. So can you help me understand the therapy which product cycle, which vehicle segment drives the increase in produce in North America, which I think will drive these cost savings across again VCP and unloading of the plants, which I think is -- when I go back again to the operating leverage we not seen the operating leverage, it must be because the loading of the plant is low. On the first, please. And correct me, please, if I'm wrong. .
Thank you very much, José , for this relevant question. So yes, again, I need to give the notion of what we are doing and on time and on the time that is embedded in the plant itself. So we know that a product gap, as you mentioned, and this product gap, obviously, hearted in the past, we are recovering market share in North America, not only and obviously, capacity utilization. Now we are currently developing very competitive and successful products that we will deliver in high volumes starting from '28. So those are the steps. The step is now we focus on improving quality by daily and focused execution by improving industrial cost as we are doing by daily and focused execution both are happening, and we need to accelerate more. And those will remove warranty costs and campaign costs, together with obviously increased cost saving and industrial efficiencies. Said that, at the same time, we are introducing and we will introduce more the new products.
So we introduces already some. As you see, the Ram TRX SRT that will be a great profit contributor has been recently introduced distributed to our dealers just 6 months after an bidding. We are developing and we will launch this year Jeep recon BEV, Jeep Grambagonier REV. And then the high-volume products that we are executing in developed now will be delivered to the market by end of '27 starting from '28. So the steps are those: quality improving, warranty cost and campaign costs removed, cost improving, cost savings into our business, improving commercial efficiency with the lineup that we have and the new products we are introducing to increase volume and saturation and then the big products that are coming by end of '27 starting of '28. Joao do you want to add something?
No, thank you, Antonio.
The next question comes from the line of Emmanuel Rosner from Wolfe Research.
Great. First question is on the second half puts and takes that you provided before, which extremely helpful to understand a lot of the headwinds around raw materials, non-repeat of IEPA, the volume destocking. I was hoping you can just give a little bit more color on some of the tailwinds. What will drive the positive mix in the second half the positive U.S. pricing in particular? .
Yes. I'll start to take the answer, and then I will give the word to Joao. So the headwind that we see are the ones that Joao explained. So we see inflation coming. We see a memory ship shortage. And we see, especially in quarter 3, lower shipment driven by the shutdowns, both in Europe and seasonality in Europe and in North America. Then when we project to half 2 and quarter was specifically, the major 2 tailwinds will be one, again, VCP. So we are meant to implement initiative that were mapped by end of '26, that means that in quarter 4, we will start enjoying an acceleration of cost savings coming from there, for sure. And then we see a constructive environment for pricing in North America specifically. And obviously, we will take that as much as possible. Joao? .
Yes. So on the mix there are 2 things. One will be channel mix, given the seasonality of rental sales, both in North America and Europe more heavily in the first half of the year. And also as we introduce vehicles here in North America, in other regions as well, we see benefits of mix. One obvious example is the RTX on pricing, given the inflation pressures and the raw material inflation that everybody is expecting in the second half, we see constructive price again in North America and in stabilization in other regions. And the third 1 that is very important, it's an acceleration of cost reductions, as Antonio mentioned. But those are the -- so it's really operational and drivers and that we are working every day to improve our business efficiencies as we develop the new products that Antonio was mentioning before. .
My follow-up question is, would you be able to describe for us the competitive environment and traction you're seeing in the full-size pickup market in the U.S. the -- your inventories of Ram particularly elevated, I think around 110 days of the dealers there are some media reports on some pretty large incentives being offered in the month of July. So just curious how much the market traction you're seeing a could you the competitive environment for us?
Yes, I will take the first part of the answer. And I must say that I'm very happy with around Ram 1500 trajectory. So Ram 1500 is specifically, which is a corner store as a product for the Ram brand. It was declining steadily in the previous year. And then after the introduction of the Ram Hamid engine, then is starting climbing up again. In July, it's crossing the line of 20% plus segment share and has been gaining segment share and market share since 12 months ago. Joao, you want to take the other?
Yes. So the specifically on the run light duty, where we have the 26 model here, it's a normal model transition. And again, we are attractive on price on the second half. So this is the price position that we have on the brand light duty right now is specific on the transition of the model year, and we are definitely taking advantage of the strong position that we have on that car, including they start to accelerate sales as we transition the model year. .
The next question comes from the line of Michael Foundoukidis from ODDO BHF.
Yes. So 2 questions on my side. First, on VCP. Of the EUR 2.4 billion of VCP benefits that are expected in 2027, how much should flow directly to versus being reinvested into pricing and market share gains? And second question maybe on North America and following up on your previous answers. How much of North America generic cover would you consider depends on higher utilization from new products arriving in 2027, 2028 versus cost reduction alone. Thank you. .
Okay. On the VCP, the EUR 2.4 billion savings, we expect all of that will go to AOI. And then on the second one, the biggest items to improve the AOI in North America or material cost and quality improvement. -- plant utilization is important, and we are seeing a rate on efficiencies, but the magnitude of purchasing material cost efficiency in warranties much, much larger than an efficiency that we can get on better utilization of the plants.
The next question comes from the line of Philippe Houchois from Jefferies. .
Two questions on product more. One is on the Cherokee there was a lot of hope Cherokee would make a difference to market share. We don't really see it. And I know they maybe production issues. But I'm trying to understand, are you deemphasizing the products because it is not as meaningful to profitability and then it needs to be somewhat redesigned? Or is it because the tariff in Mexico made it uncompetitive. And in that scenario, any particular expectation of USMCA rolling? And at 1 point, would you be transferring production of Cherokee to Belvidere if that is the case and is that the answer to Cherokee being a more meaningful contributor to volume and profitability? .
Another question I have on product sales, but more on the European side is leap motor. So we've seen good volume from Stellantis in Europe, but we see negative volume mix impact. Now I understand the mix can be negative. I'm trying to understand how much of a contribution would you expect from LEAP motor -- and to what extent my standing of the LEAP motor setup and the cost efficiency is that the product could be dilutive to the mix of Stellantis still be accretive to earnings? And is that still the right approach? And when do we start to see that show up in the profitability of Europe? Or do we have to wait for eventually the Peugeot brand to start coming through and contribute more positively to mix as was the case in the past?
Okay. So we'll speak the question in 2. I will take the Cherokee question, and I will pass to Joao to LEAP model question. On Cherokee. First of all, we see high interest from consumer on Cherokee. We map that every time on the funnel management and interest is very high. What we are doing, as you said, it is very exposed to tariffs. So we are balancing volumes with profit generation. We are doing that by limiting some trims and mixing on the highest and more profitable trims and limiting some channels, so improving the quality of the mixed channel. This is what is happening now in Cherokee. What we are doing in parallel is to put it into VCP. So it will be 1 of the nameplates that will receive the cost savings that we are identifying, mapping and implementing -- we are introducing more competitive teams. This will happen in half 1 next year. And then as you mentioned, we are impatriating Jeep Cherokee into Belvedere and that will make Cherokee tariff free almost tariff. Leapmotor?
Yes. So Leapmotor, it has been so far very successful. The vehicles are profitable. But as you mentioned, because of the port mix of those vehicles, they have margins that are lower than the average in Europe. But we continue to expect a positive contribution and increase in contribution from Leapmotor as we launch new vehicles and expand the portfolio in Europe. So, so far, it's very successful. And again, it's profitable, but it then has a negative impact on mix because of the power train. Thank you .
Understood. If I can squeeze in for back to Antonio, but do you have a date for when Belleli would start production of the Cherokee? .
No, we cannot unveil this data in this call. Thank you.
The next question comes from the line of Christoph Laskawi from Deutsche Bank.
I'd like to ask on cash generation in the second half. Now obviously, you point to Q4 being better than Q3 and CapEx ramping up quite a lot. Could you comment on the CapEx phasing will it start in Q3 right away with far higher spending? Or is it mostly Q4? And with working capital reversing or likely reversing in Q3, should we prepare for free cash flow, which is an outflow of over EUR 1 billion plus in Q3? Any comment on free cash flow phasing would be appreciated.
Yes. No, thank you for the question. The first comment is that if we look at the second half versus first half, we expect to have higher CapEx. And we expect the higher CapEx to pick up already in Q3 and then Q4 again. So we'll see a gradual improvement as we continue to develop the new programs that were set under FaSTLAne 2030. For the second half, we expect working capital to be again positive as usually happens at the end of the year as we reduce specialty property stock. On seasonality between Q3 and Q4, you're right that working capital in Q3, it's negative. And it will have the same -- not the same amount, but the same dynamic that happened last year because of the summer production shutdowns, both in North America in Europe. So Q3 it's normal that working capital is negative and it will be the same this year.
And if I may, a follow-up just on Europe. You mentioned other regions pricing stabilization. Is this seen in Europe? Or is it actually the competitiveness accelerating given the inflow of low-cost competitors in the market? And do you expect the pricing pressure in H2 essentially to be offset with the industrial savings?
So the industrial savings will have an important role both in North America and as you mentioned, in Europe, the pricing environment will be constructive in North America, and we believe not deteriorating in Europe. And in the other region, we believe that as well, VCP and industrial savings will be a major lever we see some opportunity on pricing in the other regions.
The next question comes from the line of Itay Michaeli from TD Cowen.
2 quick questions for me. First, I was hoping you could maybe share how you're thinking about targeted U.S. inventory levels by year-end, whether it's base supply or absolute units. And then secondly, as we think about the achievement of positive industrial free cash flow in 2027, I was curious kind of what kind of volume growth or revenue growth you roughly might need to take it to that level of free cash flow next year?
Okay. So I will answer to the question of the U.S. inventory. So I said we peaked in June at [ 390, ] moving from January to June, plus 70,000. 65,000 of those 70,000 are new products that we expect to accelerate in sale in H2 and then also the anticipation of buildup for the planned summer shutdowns in our North American plant. July sales rates are already moving the inventory largely down -- so we believe that we will end July as U.S. dealer inventory at around 365,000.
And moving forward, we believe that this absolute number can be the 1 that will allow us to accelerate the sales that we want to do and also introduce the new products that we are doing, such as the Ram TRX SRT, which will be very profitable, very positive for mix. the Jeep Recon BEV and the Jeep Grand Bagonirare REV. Joao, you want to take the other one? .
Yes. So on the -- in FaSTLAne, we set the revenue target for 2028 at EUR 175 billion. So the revenue that we are expecting for '27, it's intermaterial between what we're going to close 2026 and the 2028 targets. So it's reasonable volume growth on the back of the products that we continue to launch. The biggest driver for the positive free cash flow next year, is the earnings volume will be a part of that.
But the biggest part of the earnings growth next year as we are talking many times here, it's industrial efficiencies, including the savings that we expect from VCP. So industrial costs and industrial efficiency will be the biggest driver of the earnings improving next year that will drive to the positive free cash flow.
The next question comes from the line of Christian Frenes from Goldman Sachs. .
I just want to come back to North America again and specifically on the volume and mix portion of the bridge where you reported EUR 409 million of benefit. That's down sequentially. And I'm just wondering the drop through, if I look at the drop-through from Q1, I think you were at 27% on that line item. And it's now dropped to 8%. So I'd just like to understand, again, if there were any sort of specific reasons for that? Or if the recalls, I think you mentioned the recall where they also presence in North America. And I'm not sure if raw mats will come into this line item. But if you could flag any reason for that significant sequential drop in volume and mix drop-through?
And then secondly, on the vehicle net price, also sticking with North America, we went from a positive number in Q1 to a negative number. And just trying to understand especially on the content side, what happened there and how we should think about the second half.
Okay. On the sequential drop-through impact, the -- the biggest driver of the Q2 was Q1 mix deterioration is nameplate mix, as we increased shipments of some of the vehicles are built, especially in Mexico. So basically, the increase of vehicles built in Mexico were the ones. So it's basically nameplate mix based on the vehicles that we speak in Q2. So nothing special other than the specific time of the mix of that happened in Q2 versus Q1.
Okay. That's really helpful. And then just I have a follow-up question on your investment spend. I think you're keeping your investment spend for the full year, it's still intact. And if my calculations are right in H1, you spent about EUR 3.5 billion, which would imply H2 spend -- investment spend of about EUR 7.4 billion or thereabouts. That's a very significant increase H1 to H2, which we didn't actually see in the last 2 years. So again, could you help me understand why there's this significant shift or perhaps making an error in these numbers? .
Yes. We can take this offline because I think some of the numbers that you've taken, you're probably not capturing all the perimeter in H1, our total investment as a percentage of revenue, and we can reconcile the off-line, it was 6.3%. So so we -- yes, so there is over EUR 1 billion of higher CapEx in the second half first half, that's what we are expecting. .
Ladies and gentlemen, this was the last question for today. With this, let me now hand the call back to Mr. Antonio Filosa for the conclusion. .
Well, very, very well. and thank you again for joining us today. And for the time and focus you have put into reviewing our results and listening to our business updates. Thank you again, and see you next time. Bye-bye. .
Stellantis — Q2 2026 Earnings Call
Stellantis — Q2 2026 Earnings Call
Solid Q2: revenues and margins improved, industrial free cash flow turned positive, and 2026 guidance was reaffirmed.
📊 Quarter at a Glance
- Revenues: €43.5bn (+13% YoY)
- Shipments: 1.6m units (+10% YoY)
- AOI: €773m and 1.8% AOI margin (Adjusted operating income margin), up 120 basis points YoY on volume, cost and recall non-repeat effects
- Cash flow: Industrial free cash flow +€1.0bn in Q2 driven by higher AOI, seasonal working capital and lower run-rate CapEx; inventories 1.4m units (+20% YoY) due to launch build-ups
🎯 What Management Says
- Strategy: FaSTLAne 2030 is the roadmap — invest in brands/products, expand market coverage and drive cost-out via the Value Creation Program (VCP)
- VCP targets: €6bn annual run-rate savings by 2028, 40% of initiatives to be implemented by end‑2026, delivering ~€2.4bn AOI benefit in 2027
- Execution: plant efficiency and quality improving (NA production efficiency +870bp, 3‑month in‑service quality +38% NA); multiple new and refreshed launches and high‑margin SRT products progressing
🔭 Outlook & Guidance
- Guidance: Full‑year 2026 guidance reaffirmed; company reiterates expectation of positive industrial free cash flow in 2027
- Spend: CapEx + R&D expected at 6.5–7.0% of revenues in 2026
- Risks & timing: H2 weighted to Q4, Q3 hit by summer shutdowns and raw‑material inflation (roughly €1bn H2 headwind); net expenses €1.0–1.2bn; ~€2bn of payments related to H2‑2025 items (€0.9bn paid H1)
❓ Analyst Q&A
- North America margins: Management attributes remaining weakness to legacy quality/warranty and product cost gap; expects VCP and new product mix to drive improvement into 2027–28
- Inventory & channels: Dealer inventory peaked in June for launch build‑ahead; July sales already reducing stock with U.S. dealer inventory guided to ~365k
- Cash flow phasing: CapEx expected to rise in H2 with pickup starting in Q3 and higher Q4 benefits; working capital seasonal drag in Q3 then recovery into year‑end
⚡ Bottom Line
- Takeaway: Q2 shows tangible operational progress — revenue, margins and free cash flow turned positive — and management reaffirmed 2026 targets while laying out a clear VCP path to materially improve profitability by 2027–28; near‑term risks are raw‑material inflation, FX and H2 seasonality, so execution on VCP and product launches will be key for shareholders.
Stellantis — Analyst/Investor Day - Stellantis N.V.
1. Management Discussion
Please welcome Charlie Christman, Head of Investor Relations.
Good morning, good afternoon and good evening to everyone joining either in person in Auburn Hills, Michigan or on our webcast. It's my pleasure to welcome all of you to the Stellantis 2026 Investor Day. I'd like to thank you all for joining us, and especially those of you in the room who have traveled to get here.
As a quick reminder before we get started, any forward-looking statements that we make during today's discussions are subject to the risks and uncertainties mentioned in the safe harbor statement included in our presentation, and available on the Investor Relations website.
We have a big day planned. Today, you'll hear all about our new strategy from our CEO and other members of the senior leadership team. Those of you who are here in person will participate in a series of modules which will allow you to experience our products and technology up close. After lunch, you'll hear from the CFO and we'll host a Q&A session where you'll have the opportunity to ask questions to the management team.
But before getting started, I'd like to welcome our Chairman, John Elkann to say a few words.
Please welcome John Elkann, Chairman of the Board, Stellantis.
Welcome. Welcome all here in Auburn Hills, and thank you for joining us here and online for this very special day, our Stellantis Investor Day. Today is an opportunity to reflect on where Stellantis stands on the progress we have been making. But most importantly, why we are confident about the road that lies ahead.
Over the past year, our focus has been on getting back to the fundamentals, building and selling great cars that our customers love and trust. My whole working life has been spent in the automotive industry. And I can say that there has never been a time of greater change and challenge in our industry than now.
That's why it was only right and natural that our new CEO came from within our company. Calling on all his hands-on knowledge and a deep understanding of the dynamics of our company and our industry, Antonio Filosa, with the Stellantis leadership team, right from day 1 as CEO focused on resetting and laying the foundation for durable success.
The reset has been profound and necessary. It is anchored in a view of the industry that perhaps Stellantis more than any other OEM is able to understand and turn to its advantage.
Shifting from global to multiregional to regional. And Stellantis through its history, in its nature, has a unique opportunity to make that multiregional reality, a compelling, competitive lasting advantage. This is precisely the direction Stellantis has taken under Antonio's leadership. And today, he and his team will unveil the details of what they have been doing and more importantly, of their exciting plans for the future.
We are already seeing encouraging initial signs that the actions are producing results. These are early indicators that Stellantis is on the right track. But there is still much work ahead, and we remain realistic about the challenges facing both Stellantis and the industry more broadly.
Competition is intense, technology cycles are accelerating, and the external environment remains highly volatile. But we are approaching this next phase with lucidity with agility and with ambition. All tempered by humility and an understanding that success is not achieved in 1 day. It is achieved day by day. And with the relentless focus on execution that is a core strength of the leadership team that we'll present today.
Today, you will hear from them an ambitious but realistic plan, powered by accountability and a deep understanding of the markets in which we operate. Our challenges are real. And to succeed, it is important to be open about this. Yes, our opportunities are very real. And the strategy we will share with you today will illustrate in detail how we will embrace them with creativity, with energy and always with discipline.
I want to thank all our colleagues of Stellantis, all our partners, all our dealers, our suppliers and our stakeholders for what they do and how they want to win with us. I want to also thank you all for being here today with us and for your continued trust and support. And now let me hand over to Antonio and enjoy the day. Thank you.
[Presentation]
Please welcome Antonio Filosa, Chief Executive Officer of Stellantis.
Good morning, everybody, and a warm welcome to Auburn Hills. We really appreciate you all joining us here and on the webcast as we reveal our strategic plan that is designed to drive a successful next chapter for Stellantis.
This plan is grounded in reality. It is the result of months of disciplined work across the company. And it is a designed to create the condition for profitable and sustainable growth.
Let me start with the reality shaping our industry today. First, the industry is fundamentally more regional and fragmented. Europe and United States are two very good examples of that. Europe is moving faster into electrification. While the U.S. is easing the CO2 trajectory and redefining trade conditions.
Second, competition from Chinese OEMs is intensifying in all major markets with the exception of the United States.
Third, cost pressure is structural. It comes not only from competition and inflation, but also from supply chain complexity and from new technologies adoption.
Fourth, electrification continues with various technologies, but the pace is different region by region.
And finally, the competitive battle fleet is expanding beyond traditional automotive capabilities, success now also depends on software, artificial intelligence, [ ADAS ] and battery technologies.
What we want you to take away from today is that Stellantis with all its assets, its capabilities and its new strategic plan is well positioned to succeed in this contest. You will hear from us today how we leverage our regional routes, our global scale, our partnerships and the new technologies in our journey going forward.
Let me start with what we have done in the last 12 months. We have reorganized the company to improve accountability to improve business agility and customer centricity. The number of members of Stellantis leadership team has been reduced from 30 to 15 to simplify our top-level decision making. We have empowered our regions to own their P&Ls and their operational execution with the support, obviously, of the functional leaders. And our brands are now embedded in their regions close to the very customers they want to serve.
An absolute priority for me has been to focus on whole organization and product quality and execution. Product quality has already improved globally by 31%. Manufacturing business across all our plants by almost 140 basis points. These are just initial results, thanks to new processes, the new standards as well as the reinforced teams on the ground.
We gained market share while maintaining pricing discipline. Ram is driving the momentum in North America. Fiat Grande Panda and [ CSUV ] launches, including Citroen C5 Aircross and Jeep Compass drive growth in Europe. The launches of the Jeep Compass and Peugeot 408 support growth in Middle East and Africa. South America maintains leadership through entry cars, new pickups and SUV expansion.
At the same time, we recognize that we have the need to maintain a strong balance sheet as we execute our plans. In March 26, we successfully issued EUR 5 billion of hybrid notes with strong support from investors. The result is strong liquidity of EUR 44 billion, representing 28% of our annual net revenues, placing us well within our target range.
And our quarter 1 numbers are an early indicator that our actions are producing results compared to quarter 1 '25, shipments are up 12% Net revenues up 6%, AOI almost tripled, and free cash flow improved by 37%. This is just the first step of our journey, not enough yet. But the direction is the right one.
Let me turn now to what comes next. Building on this foundation, today, we present to you Fast Lane 2030. Fast Lane 2030 is not a final destination, it is a journey. And today, we will guide you through our journey. Let me start with the company we are building. We move people with brands and products they love and trust. We put the customer at the center of everything we do. We leverage our strength as a global company while empowering our regions to express their local price.
So ladies and gentlemen, here is Fast Lane 2030. It is built on six fundamental pillars that connect the industry context our strength and capability and our ambitions.
First pillar, we sharpen our brand portfolio, and we simplify it.
Second pillar, we allocate our capital to the areas with highest returns and to develop global assets.
Third pillar, we developed strong partnerships.
Fourth pillar, we optimized our manufacturing footprint.
Fifth, we drive disciplined execution.
And finally, and very important, we empower our regions to develop tailored plans and give them the resources and the autonomy to execute them.
Now let me walk you through these six pillars in more details. Let's start with pillar #1, sharper portfolio management. It all begins with product. During our history, we have created some of the most iconic nameplates in the world. Jeep Wrangler, Ram Pickups, Dodge Charger, Chrysler Pacifica, Peugeot 208, Fiat 500, Opel [ Coursa ], Citroen C3, Fiat [ Ducato ], Maserati [ Sepura ] just to name a few examples. And behind these iconic products, we have the brands that make them even more powerful. Our brands, they are our strongest assets. Each of them addresses specific customer needs. And we have decided to review how we manage them.
Our branded product plan has been completely renewed to maximize capital efficiency, avoid double spending and support profitability. With that new approach, we now have four global brands with the highest scale and the highest profitability. Those are Jeep, Ram, Peugeot and Fiat. These brands with their multiregional presence are natural first launches for all our new global assets. And we have five regional brands, each of them very strong in their respective markets. Chrysler, Dodge, [ Alfa Romeo ], Citroen, Opel. These brands leverage those same global assets, launch it before and make them distinctive for their own customers. [indiscernible] launch our historic brands, prominent in France and prominent Italy. They will be managed by Citroen and by Fiat and developed the specialty brands.
Before we move on, an important word on Maserati. Maserati plays a very special role with Stellantis. As a pure luxury brand with a special customer and a unique legacy. It already has a powerful enough, starting with the [ Recale ], the Grand Tourism, up to the [ McPora ]. And looking ahead, we intend to strengthen its future. with two new [ e-segment ] vehicles. Maserati's strategy, product road map and value creation are different by natural, and that deserves a dedicated conversation. So we will come back to Maserati by December in the beautiful [ Moderna ].
So let's go now to our second pillar, focused capital allocation. Over the next 5 years, we will invest more than EUR 60 billion. 40% of global platforms, global powertrains and global technologies to capture the full benefits of our unique multiregional scale. And 60% crafting the brands and the products that define us Stellantis.
So let me show you some details starting from those global assets. With our global platform, we are deploying new technologies, increasing commonality and reducing complexity. By 2030, 50% of our total annual volumes will be produced on three global platforms. On power trains, we will broaden our multi-energy coverage with new hybrids, new battery electric vehicles and highly efficient combustion engines. And nearly 50% of our volumes will be equipped by multiregional powertrain solutions with energy flexibility built into our portfolio.
On technology, we are also entering a new chapter. Stella Brain is our scalable central and software architecture. Stella [indiscernible] cockpit defines a new way for customers to interact with their vehicles. Stella Autodrive is our scalable automata driving system. And we will embed AI across the technology stack. All of these technologies will be launched in 2027. By 2030, 35% of our annual volumes will be equipped with these technologies. And by '35, more than 70%.
This critical enablers will be developed globally and roll out locally to the brands and the products we need in the regions. Later, Davide and Ned will take you through this in further details.
Now moving to the brands and to the products. We will invest over EUR 36 billion in our brands and our products, of which 60% will be allocated to North America. This reflects where we see the strongest combination of market opportunities, brand strength and attractive returns.
Around 30% of our investment goes into expanding market coverage. This is the case, for instance, with a new midsized pickup in the U.S. and the new C segment offensive and [ e-Car ] program that will be introduced in Europe.
And then finally, when it comes to allocation of capital among brands, scale, a multiregional presence really matters. Large-scale allows platform, technology and product investments to be leveraged broadly and efficiently. This is why around 70% of our total product investments is concentrated on our four global brands. Those four brands lead the launch of our global assets. With this efficient approach over the next 5 years, we will launch over 60 all new products and 50 significant refreshes, offering a balanced mix of powertrain technologies.
Third pillar, the power of partnerships. Stellantis is one of the leading automotive OEMs globally, a company of many strength and with the right strategic partners, we can go further, we can go faster, we can go better. The best partnerships create value for both sides, helping both succeed. With this in mind, we will cooperate to codevelop and co-fund products, gain access to additional geography, broadened technology optionality, increase our manufacturing capacity utilization and improved sourcing and cost competitiveness.
Let's explain this a little bit more. Today, we are already a proven and successful commercial partnership with [ LEAP ] model through our joint venture, where we own 51%. Now we are taking that partnership through the next level. Joining forces in purchasing to share supplier base and to improve cost and also sharing capacity in the Madrid and [ Zaragoza ] plants in Spain.
With our long-time partner, Dongfeng, we are launching a new program under our DPCA joint venture to codevelop two Peugeot and two Jeeps for China and other regions. With Dongfeng, we are also creating a European joint venture, 51% owned by Stellantis to cooperate on distribution, on engineering, on sourcing and on capacity sharing, starting with our [ rand ] [indiscernible] in France.
With Tata, we are strengthening our product offering in India and supporting exports to APAC, Middle East and Africa and South America through synergies in manufacturing supply chain, product and technology.
All these partnerships will bring complementary products to our extended lineup. And additionally, with [ JLR ], we plan to incorporate across product and technology development here in the United States.
And of course, partnerships will help us to succeed also in the tech space. For our compute architecture, for our smart clock pit, for [ ADAS ], for AI and for battery tacks, we are working closely with some of the best players in the industry. Ned will explain how we are already working with many of them. And I'm very delighted to tell you that we have [ Kasan ], the CEO of [ Applied Intuition ]; [ Alex ], the CEO of [ Wave ]; and [ Nakul ], the EVP and Group General Manager of Qualcomm here we us today and you will have the opportunity to meet them later in the breakout session.
Pillar #4, industrial footprint optimization. Our regions will significantly increase their capacity utilization. In Europe, we will reduce capacity by more than 800,000 units leveraging partnership and repurposing plans. This is planned to be executed without any implant shutdown.
In Middle East and Africa, up to 90% of volumes will be locally produced or imported from the APAC partners. In the U.S., we are increasing production with -- that will also help mitigate the impact of tariffs.
Pillar #5 power of execution. On cost, we target more than EUR 6 billion of cost optimization by 2028 through the value creation program. On quality, we aim to reach top quartile performance in every segment and every region. In product development, we are significantly reducing development cycles targeting 24 months compared to around 44 months today. And Stellantis financial services will enhance our customers' experience and is expected to contribute EUR 1.5 billion of AOI by 2030.
Our strong relationships with supplier partners will be a key contributor to achieve our targets in competitiveness, in quality and speed to market.
AI will also be a fundamental enabled. Today, we have more than 120 applications already deployed across our companies, across our operations and more will come.
Pillar #6, the power of our regional routes. Today, we are #2 in Europe, #5 in North America, #1 in South America and #2 in Middle East and Africa. And over the years, we have built a car park of more than 67 million vehicles. This is almost 10% of the global car park.
Every region has a tailored an ambition plan to grow. In North America, we expect 25% growth in net revenue. And the focus is on inspiring market coverage and improving cost.
In Europe, we expect 15% growth through reshaping the brand portfolio while optimizing manufacturing footprint.
In South America, we expect 10% growth by building on our leadership in Brazil and Argentina, launching a new pickup of [indiscernible] and growing in the other countries of the continent.
In Middle East and Africa, we expect 40% growth driven by product localization and increased imports from our very competitive Asian partners.
And in APAC, we are using these partnerships to enable capital-light growth and support exports to other regions. Tim, Emanuele, Herlander, Xavier, Grégoire, will share their plans today with you.
Finally, but very important to me, this is the Stellantis leadership team. We are grounded the reality. We are humble. We have a hands-on approach, and we are close to the field. And today, this team and I will take you through Fast Lane 2030 and we look forward to answering all your questions. Thank you very much.
[Presentation]
Please welcome Davide Mele, Chief Product Planning Officer; and Ned Curic, Chief Engineering and Technology Officer.
Good morning, everyone. It's a pleasure to be here with you today. You just heard Antonio highlight how we allocate our R&D and CapEx. And over the next few minutes, Ned and I will focus on the 40% dedicated to global platforms and technologies and now they support long-term value creation.
I want to start with the key messages of our session. We simplify where scale matters, and we do through platform optimization, modularity and global technology capabilities so that we can deploy capital efficiently. And we differentiate where customers care, giving our customers freedom of choice and our brands, the ability to deliver distinct products and experiences. Technology is the lever that allows us to do both at the same time.
At Stellantis, technology is made for humans. We believe that technology only matters if it serves real people in real use every day. Customer priorities vary by region from fun to drive in the U.S., to the digital tech in China and emission and affordability in Europe and South America. But understanding these differences and balances with global trend and local pride sets the core of our strategy.
With this customer approach in mind, we are simplifying and modernizing Stellantis from the ground up. and not as a disconnected technologies but has one coherent scalable system. Our technology plan is built as a modular vertical stack from the vehicle's physical foundation all the way to the cloud. Reusable building blocks with standard interfaces allow us to scale and upgrade over time. And artificial intelligence acts as an accelerator across every layer.
I will focus on how our platforms and powertrains deliver efficiencies and flexibility and scale. Before handing over to Ned for software and electronics. So let me start. Platforms and powertrains because that is where our modular strategy becomes very concrete.
On the platforms, our objective is twofold. On one side, we are extending our market coverage where demand is growing. In North America, for example, this includes adding midsize and compact pickups and expanding into midsized SUV and small bands.
In Europe, it means strengthening our presence in the A segment. And rebuilding a full C segment lineup, including affordable and compact SUVs. But on the other side, will drive simplification and scale.
By 2030, in fact, 50% of our volume will sit on just three global platforms with up to 70% component we use. Our ambition is to streamline the number of platforms by about half, while expanding coverage across regions. And this is how we reduce complexity and unlock mega scale efficiencies.
Our [indiscernible] and approach follow the same logic. First, it's about broader coverage and freedom of choice. And as we launch more than 60 new products, we pursue a clear multi-energy strategy, investing in BEV and transitional technology like HEV, [ REV ] to match different adoption speeds across regions.
And second, it's about scale. By 2030, 3 million of our powertrains will be cross-regional and we will reduce [ ICE ] families by 40%, maintaining full market coverage. So flexibility for customer goes hand-in-hand with capital discipline driven by scale and efficiency. And to make this concrete, let me introduce to Stella One. Stella One is a clear example of a truly modular design. Shared vehicle architecture paired with different power train modules through common interfaces. And that's to get to a flexibility without carrying inefficiencies from one propulsion system to another.
We're launching Stella One by 2027 to cover B, C and D segments over time. It targets over 2 million units supporting more than 30 models by 2035. Stella One brings five different platforms into one scalable architecture. And it integrates Stella Brain, Smart Cockpit, [ Steer by Wire ] enabling faster feature deployment and brand-specific experiences on a shared core, as Ned will explain.
Stella One delivers around 20% cost reduction driven by modularity by design and the new battery solutions. In fact, Stella One is also the foundation of our updated battery strategy.
It delivers two step changes. First, we scale [ LFP ] to improve affordability and reduce exposure to critical raw materials.
Second, we sell to body integration the battery becomes part of the vehicle, so cutting cost, weight and complexity. Stella One will also be 800 [ book ] capable delivering very competitive charging time and a better real world BEV experience.
So that's how we closed the cost gap with Chinese OEMs operating in Europe and put ourself on a clear path towards BEV cost parity over time. But let's now take a look at Stella One.
[Presentation]
Now let me share a few additional key moves we are making to protect capability leadership and core profit pools.
In Europe, with the e-car, we're creating a new affordable EV offer designed to broaden access to 0-emission mobility and strengthen Europe's competitiveness. It leverages our Chinese EV ecosystem while maintaining European safety and quality standards.
On [ LCV ], we're rolling out the next-generation large one, combining best-in-class cargo capability with advanced connectivity and a 360-degree customer ecosystem. This will reinforce our leadership where uptime and productivity matter most.
In North America, we are further strengthening our position with capable, powerful SUVs and pickups. We are introducing a range extended EV first to market for these segments, and it covers up to 90% of daily driving in EV mode and adds vehicle-to-grid capability, bringing real customer value.
At the same time, we're expanding our pickup lineup with new compact and midsized pickup trucks, both built on a shared architecture and leveraging our global portfolio. This allows us to move fast, expand coverage and deploy capital with discipline.
I'll now hand over to Ned, who will walk you through our software and electronics bring this strategy to life.
Thank you, Davide. What Davide has just shared with you is our physical foundation of our technology strategy. And I will walk you through how software and electronics bring products to life.
At the center of our strategy is Stella Brain, our new electronics software platform. Stella Brain in this single global architecture that scale across all platforms and markets. It's a clear example what Antonio talked about to our approach to efficient capital allocation. We simplify with scale matters to reduce complexity and cost. We own and build so many key technologies. But we're also smart. We partner with the key technology players when economically and economically is better for us and strategically more viable. Let me show you the Stella Brain is and why it matters to Stellantis.
[Presentation]
As you've seen, Stella Brain is a fundamental shift in how we design and operate vehicles, operating software and electronics platform.
While the term software-defined vehicles is not very clear and really means so many things to different people. Stella Brain is our intelligent vehicle platform that puts us modern softer at the heart of the vehicle. We're replacing a dozen of fragmented systems with one unified intelligent scalable platform with native over-the-air capabilities. For our customers, this ensure that vehicles respond instantly and continuously improve over time.
For example, Jeep owners will be able to download new off-road modes that automatically generate videos after their off-road trips. [ Pro one fleet ] managers will be able to update towing capabilities without pulling vehicles out of service. These are two of just many hundreds of new services we will deploy with Stella Brain.
Stella Brain launches next year in Europe arrives the following year in the United States, and it will scale up to 5 million vehicles globally by 2035. While Stella Brain handles the invisible intelligence side of the hood, Stella Smart Cockpit is what our customers would actually see, touch and experience. Let me show you how we translate digital cabin experience into a fresh and personalized experience for our customers and brands.
[Presentation]
Made for humans. Stella Smart Cockpit is AI native platform. And it builds on the same logic of Stella Brain, simplification and modernization. Smart Cockpit replaces what's today 12 different separate systems in one unified cockpit platform that works across all brands and regions. Each of our brands need to deliver a distinct cockpit experience for our customers. Stella Smart Cockpit is designed for 85% of software visibility, driving efficiency again and cost discipline which are still enabling our brands to provide specific customization.
For customers, we bring seamless, intuitive digital experience and that always stays fresh learns over time and adopts the individual preferences. For example, we're taking Jeep off-road again. Cockpit automatically switches to off-road view, showing the trail maps, pitch and role, cameras without any setup. When a ran track driver hooks up a trailer, the system automatically displays real-time payload, towing status and camera feeds. Smart Cockpit arrives in 2027 on Stella One, in Europe. And [indiscernible] Jeep, [indiscernible], [ Cherokee ] in North America, the same year, scaling up to 5 million by 2035. With Stella Brain and Smart Cockpit. We built simplified yet intelligent model and immersive digital foundation, which is AI native.
Stella Autodrive brings our next-generation active safety and assisted driving experience to scale. With Autodrive, our strategy is yet another example of efficient capital allocation. We invest where we truly differentiate such as vehicle integration, [ HMI ], but we also partner with the best-in-class capabilities like AI driving models.
On our current system, we are updating [ L2 ] service capability with 8x small broad coverage, automatic lane change and towing support, all that while cutting system costs by 70%. This is a massive cost reduction and it will accelerate adoption, expand deployment and drive higher profitability.
But we are going much further. Today, I'm happy to announce a close collaboration with Qualcomm and [ Wave ] to bring state-of-the-art door-to-door, hands-free, supervise autonomous driving at scale. Customers were able to enjoy a smooth, immersive and save Autodrive experience, plus on city and highway roads with the multiple driving modes to choose from. The service will launch in 2028 on North American products.
I understand some of you had experienced yesterday. We didn't tell you what you're driving. For the others, interested in test driving, we'll be very happy to offer early preview rides.
Now let me talk about artificial intelligence. As Antonio explained earlier, we have been all in on AI. We have deployed AI across entire product development life cycle, and it's paying off.
First, we are engineering faster. AI accelerate simulation by up to 300x and improved software productivity 37%, thanks to the cogeneration and automation.
Second, we engineer better. AI helps us create simpler, cheaper and more disruptive designs.
And third, reengineer smarter. AI unlocks a global engineering knowledge. Putting into directly into hands of every Stellantis engineer.
In product development, speed matters. And the reality is very clear today. Chinese are really setting the benchmark for the speed. And we are closing gap by changing how we build vehicles.
First, we're combining simplified architectures, we talked about with AI and virtual first development.
Second, we are tearing down the walls. We have a lot of walls. We're tearing down the walls and integrating engineering, styling, purchasing, manufacturing to unified teams.
And finally, we are supercharging this process with all the lessons learned from our partnership engagements.
As a result, our full development cycle is shrinking from around 4 years to around 24 months without compromising quality or performance. Faster development life cycles are becoming a new standard at Stellantis. As you've seen, we're doing a lot and we have a lot of work ahead of us, but we're on a strong path. Our direction is clear, and our progress is real. We are simplifying our architecture, modernizing our software and accelerating our development timelines. We're empowering our brands to stand out. We're delivering better products and more intuitive experiences, all while keeping customers choice at the absolute center of our strategy. We've been building technology made for humans, simplify the scale, differentiated with it matters. Thank you.
[Presentation]
Please welcome Antonio Filosa, Chief Executive Officer of Stellantis; and Tim Kuniskis, Head of North American Brands.
Thank you, Davide and Ned. Let's now turn to North America. This region represents the biggest opportunity for our growth and our profitability. So let's dive in.
Our ambition is to grow revenues in North America by 25% through 2030. To do that, we have two essential objectives. Number one, expand market coverage. And number two, improve cost.
Expanding market coverage means that we have strong brands that are currently participating in a limited portion of the market. To address this, we will grow our offerings in new segments, increasing market coverage from 60% today to over 90%. As we do this, we will improve our cost competitiveness through cost efficiency and improved capacity utilization. This will ensure that volume growth translate directly into sustainable profit expansion.
Let me take a minute to put this region into perspective. North America represents about 40% of Stellantis revenues today. We have some of the strongest and most iconic brands in the industry. some of the most iconic products in the market, and we have a very strong dealer network.
At the same time, we have a huge opportunity with significant headroom for growth. There are attractive segments of the markets where we are not fully participating today and that is our opportunity, to leverage our strong brands and to drive deeper market penetration.
The good news is that we are seeing encouraging momentum from action we already took. In quarter 1, shipments were up 17%, revenue up 11%, AOI improved by EUR 800 million. This was disciplined growth, supported by EUR 200 million in pricing improvement. This reflects real transformation in the business. We are seeing positive product mix, and we are seeing strong commercial execution, a good first step, but this is only a first step into a long journey.
So let's talk about what the journey will look like over the next 5 years. By 2030, we will fully refresh our North America showroom adding 11 all new nameplates and refreshing 12 current models. We will launch a strong product offensive grounding in offering customers the power train freedom of choice they want and they deserve. We will deliver a more efficient lineup of ICE vehicles, including the return of the legendary [ MAV ]8. We will expand our hybrid offering. We will introduce a new range of [ DB ], including the industry's first range standing large SUV and the industry first range of standing pickup. And we will focus on the next wave of electrification. For example, the new Jeep Recon BEV coming soon this year.
With these new and refreshed products, we will increase our market coverage to 90% from below 60% today. We will enter five new segments where we are currently not participating, including the rollout of a new midsized pickup truck, a new compact pickup and a new small van. We will reinforce our existing segments, adding a new compact SUV and doubling down in large SUVs. And we will introduce seven new affordable offerings, including some prices below $30,000, leveraging our new competitive platforms.
So this is both expansion and reinforcement and it is a step change from where we are today. But the growth cannot come at the expense of profitability. So in parallel, we are structurally optimizing cost.
Through our value creation program, we will deliver more than EUR 3 billion in run rate savings in North America, this region by 2028. This will allow us to compete more effectively on price while maintaining discipline on margins.
In addition, we will improve our capacity utilization to around 80% by 2030. We will do this by driving volume growth increasing U.S. production, which will help offset tariff pressures and strengthening our partnership, including more capacity sharing with key partners.
So we are not choosing between growth and profitability. We will improve both together. And obviously, all starts with our iconic brands.
So with that, I would like to turn the presentation over Tim Kuniskis.
Thank you, Antonio. Good morning, everybody. Look, we all know how fast this industry turns and how complicated it has become. The sales funnel used to be so simple. But no matter how the journey changes, no matter how customers shop, no matter what powers the wheels, one thing has never changed, and I hope it never does. Product is King. All of the digital marketing, digital retailing, new shopping models, they can't fix a bad product. They can only amplify a good one. That's our entire strategy.
Our plan for North America is very simple, get the product right, right for the market, right for the brand positioning, right for segment expansion, right for growth and right to recover our customer loyalty.
Now let's start with the reality. 2025 is our baseline. The industry was 20 million units in North America and 16.6 million in the U.S. and we sold 1.5 million in North America and 1.3 million in the U.S. That put us #5, #5 out of 41 brands in the industry and 7.6% market share. But here's what really matters. In the segments where we actually compete our share doubles, and we move up to #3. So without doing anything different, we can grow by just showing up in more segments. And that's key, because the industry isn't going to help us. It's expected to be flat through 2030. And we all know that won't cut it because our plan is to grow 35%.
The question is, how? Product, product, product, and leveraging something that no one else has, our four iconic brands in one showroom. Every day at social media, there's hundreds of posts from our customers talking about what they love about our products, customized and personalized for their lives. That's what makes our brands special. Our customers love the products. Our customers love them for different reasons, though. But there's one common thread the diversity of our brands, the diversity of our products gives our customers freedom of choice.
Most competitors give you one brand, one identity. We give you four. So when you walk into a states dealership, it's not a showroom, it's like an auto show.
Now looking first at the Chrysler brand. The Chrysler customer isn't trying to impress the Vale with their key fob. They prioritize other things. And their choice of transportation reflects that. Every new car buyer wants a product that's functional and practical. It's just that with our other brands, that could be second, third or fourth on their list of wide bias, things like towing, performance or capability, they come first. But the reality in the market is 35% of the buyers are looking for functionality and practicality first.
So the answer is clear. It is essential that we bolster the Chrysler brand portfolio essentially because not doing that would force us to relinquish 35% of the psychological wide bias of the entire industry.
Now think about it. As it sits today, Chrysler isn't cannibalizing a single [ cell ] in Stellantis. Now if we ask another brand to stretch or contort into that positioning, I can't promise the same.
So the question is, can Chrysler be more than the mini-van brand? Clearly, it has been much more in the past or would have never survived 100 years. But when your showroom covers North America with brands like Jeep, Dodge, Ram, do you really need Chrysler? Absolutely, you do. So short term, we will strengthen [ Pacifica ] with a mid-cycle refresh launch right now, plus new variants coming soon, but the real growth comes from expansion. And adding three new crossovers below the Pacifica.
First, a midsized crossover based on the Stella One platform, plus two others below that, that are variants of each other based on shared improvement platforms out of Europe, allowing Chrysler to enter the $25,000 to $35,000 space where today, none of the American brands compete. Because a purchase decision built around practicality should leverage affordability.
The expansion of the Chrysler brand also allows us to support the brand purity in our showroom. So that a brand like Dodge does not need a conform. And it can maintain its positioning and let the Dodge [indiscernible] stand out. Not just like Chrysler, they need transportation, but it is far from their first priority. They are all in on power, performance and customization. I'm not sure a Dodge can get you from point A to point B, just like a Chrysler. But the trip will make a point I will make a statement about the person behind the wheel along the way.
Dodge buyers are different because Dodge works when it's not pretending. Dodge works when it's being honest and true to what it should be powerful, rebellious, authentic and muscular. This is the brand's positioning in its purest form.
Now looking back a few years, Dodge wasn't surviving. It was thriving. It had a cult following that became known as the brotherhood of muscle. But lately, that do front, it wasn't adding up. And the brands struggled through a very tough point in its product life cycle. Last year, Dodge was selling one SUV, the [ Durango ] and only one version of the Charger, two door only, and electric only. yet, it's still delivered 125,000 units.
Now this year, Dodge is shifting into second gear. We just started shipping two door and four door chargers with 420-horsepower and 550-horsepower gas powertrains. And a refresh [ Durango ] is on the way. The big news, though, is that we're going to be adding a true entry-level performance vehicle, a gateway into the brotherhood of muscle.
Think of it as the next generation of Hornet but the way we should have done it the first time. We know this playbook. We wrote this playbook. Dodge will literally be back on track literally and figurable by the end of the plan, and Dodge will be restored to its proper position, and we will recover the #1 selling muscle car title.
Then there's Jeep. Jeep isn't just a brand. Has there ever been a brand name that is the same as what most people call the product category. You know what I mean, regardless of the brand, a lot of people call SUVs, Jeeps. It was like Coca-Cola, Jeep's the original. This brand turned capability into a mainstream way by. And that's why so many brands are trying to copy Jeep, because as an industry, we have democratized features and finishes. Today, capability and performance drive pricing power and margins. And Jeep is synonymous with capability and everyone knows it. So the brand attracts a very unique buyer.
You know these people, they're your neighbors. They're always taking their family on adventures, loading up every weekend to go somewhere new. They leave their deep muddy in the driveway. And for them, it's not just about the adventure. It's about the stories they form getting there. The Jeep brand didn't just kick off the SUV phrase, it created the design language that continues to define it today. It proved that off-road capability was capable of moving the needle of consideration by creating a segment from scratch. This buyer is looking for adventure, open-air driving and empowering the owner's outdoor lifestyle, whether they actually use it or not.
Now last year, the Jeep brand was selling five models ranging from the compact Compass all the way to the Grand [ Wagoneer ], with the iconic Wrangler anchoring the brand's off-road positioning. Today, the Jeep brand is on a product launch offensive launching four new products right now, the all-new battery electric [ Recon ], the all-new [ Cherokee ], a refresh of the Grand [ Wagoneer ] and a refresh of the #1 selling full-size SUV Grand [ Cherokee ]. Plus the 12 for 12 program with a new Wrangler launching every single month.
But this is just the start. During the planned period, Jeep is also adding an ICE powertrain to the [ Recon ], a new Compass, refreshing the Grand Cherokee and the Grand Wagoneer, again, plus new heritage redesigns of the Wrangler and [ Gladiator ]. The combination pushes Jeep performance back near its historical high levels. Making Jeep the fastest-growing SUV brand in North America.
But there's one more powerhouse brand in our stable, the fastest-growing brand in North America in Q1 this year, Ram. Ram buyers counted in their vehicles to deliver purpose-built capability, no posing, no pretending, real trucks. They want products that define the role, purposes strong, capable and dependable while still being a personal expression. The Ram buyer, just like Dodge, they still want to make a statement, but they need a cargo bed to put to work. To this demographic, beauty runs beyond skin deep. So we have been pushing hard on Ram, the last 15 months rebuilding the positioning and the product portfolio. And as some of you have pointed out, growing our inventory levels as we balance our mix and prepare for growth, not maintenance. Not just because we love trucks, but because we love the profitability that they drive.
The full-size truck industry in North America is commonly referred to as a battleground for OEMs. And it's easy to see why. When you consider that it represents about 16% of the industry sales but nearly 40% of the profits, nothing stops Ram is not our tagline. It's a rally cry wrapped in a promise because today, we sell just three products: a light-duty truck, a heavy-duty truck and a commercial cargo van. These three products delivered 500,000 units last year, 0.5 million units is decent volume, but it is nowhere near where we plan to be by 2030.
And like I said earlier, we can reach our aspirations on execution alone. We need to deliver the right products for the market, the right products for the truck buyers in North America. We need to leverage the capital of confidence that we have earned with more offerings and more segments for more share. And right now, we are growing our volume with new variants like the [ Hami ] models and the [ TRX ] plus expanding our coverage into the fastest-growing part of the truck industry with our new express models and relaunching the [ ProMaster ] City small cargo van.
Next, we will create a new white space in the truck market, a new territory that we will define and own. Today, all OEMs offer off-road variance to their trucks. Ram will be the first to add a full line of on-road performance muscle trucks. This expansion formula will be leveraged even further though. First, with a new compact truck based on the [ Rampage ] out of South America, then we will launch an only midsized truck, the [ Dakota ] and finally, a third new entry for Ram with a full-size SUV, the Ram Charger. Plus during the planned period, we will also launch an all-new light-duty truck, an all-new range extended truck and all new heavy-duty truck and a new [ ProMaster ] van.
The Ram product range will be 100% refreshed and 50% all new and incremental. Ram will deliver the freshest and most powerful lineup of trucks in the industry, with nearly 1 million units by the end of the plan period and move into the #2 position.
Then finally, the brand that isn't really a brand, but it has come to Stanford winning [ SRT ]. It's not a brand. It's a multiplier. It turns great products in halo products. It's American premium. Think about it like deciding it's time to reward yourself with your dream car, but you love the brand and the car that you already have. The formula is very straightforward. SRT will leverage the existing nameplates and investments to deliver ultimate performance versions. We will use SRT across Dodge, Jeep and Ram to build a motion, excitement and margin.
The [ SRT ] products are the essence of halo and brand building. These models don't just elevate the whole brand. They draw a younger and more affluent customer. They generate 2 to 3x the net margin of the donor vehicle.
Now in 2025, we only had one to [ Durango ] Hellcat. But this year, we're adding the RAM [ TRX ] and the Ram [ Bumblebee ]. And we have plans for eight additional models over the plan period, which will push SRT sales to roughly 50,000 units. But remember, the economics, that 50,000 is the same as 100,000 to 150,000 non-SRTs. It's not ego. It's not for fun. It's not a hobby. This is real brand and margin building and doing it efficiently, leveraging donor vehicle product development and investment. This is more than a product strategy. It's a profit strategy.
All in, by the end of the plan period, this is what the American branch shareholders will look like, 23 models. Every single one new are significantly refreshed and 11 of the 23 completely new. Those of you that are here live, you'll see these in the dome later today.
Plus, key to that incremental growth in product is capitalizing on a critical part of the market that we barely compete in today. The 40% of the industry that transacts below $40,000. In 2025, we had just two vehicles with a starting price under 40,000. By 2030, we will have nine vehicles starting under 40,000, two of which will be the new Chrysler starting under $30,000. With that, the American brand showroom will grow our market coverage from 60% to 90% and 50% of that will be all new net products that weren't there in 2025.
So like I said in my first slide, everyone says they will execute better, and of course, that is part of our plan. But we are not relying on that alone. Our plan for the American brands is to focus on the one absolute truth in this industry. Product is king. 50% of the new products weren't in the showroom in 2025, generating a 50% increase in industry market coverage, delivering a 35% increase in sales, 50-50-35, we will deliver an American brand showroom that is the freshest in the industry. Jeep will be back to its peak, Ram will be at an all-time high in #2 in trucks Dodge will be leading muscle cars again, and Chrysler will be growing and supporting the brand positioning of purity in our showroom.
But there's one more thing. I talked about inventing a new breed of muscle a new white space in the truck industry, not a trim or a package, a full range of what we call the muscle trucks. These are the all-new 2027 RAM [ Bumblebee ] muscle trucks.
[Presentation]
Thank you, Tim. To summarize our plan for North America. It starts with leveraging our strengths. We will capitalize on the strength of our iconic brands build on the strong and positive momentum that began in the first quarter. And capitalize on the strong presence we have in our existing markets.
But we will build on those trends by taking decisive actions. We will execute on the value creation program. delivering more than EUR 3 billion in savings by 2028. We will expand market coverage, delivering a full and competitive lineup across key segments. And we will grow our lineup of affordable offerings to bring Stellantis products to an even larger group of customers.
So when you bring this all together, strong brands, increasing market coverage, refreshed portfolio and the savings from the value creation program, you get a business that is positioned for profitable growth. And that lead us to our 2030 ambition.
We are targeting around 25% revenue growth and AOI margin from 8% to 10%. This reflect a business that is not only larger but also structurally more competitive. A business with broader market coverage, stronger cost base and improved profitability. So this is more than just a long-term ambition. It is a path that is already in motion. Thank you.
Please welcome Emanuele Cappellano, Chief Operating Officer, Enlarged Europe.
Hello, everyone. A larger Europe is at the core Stellantis identity and history. Many of our iconic brands were born in this region and some more than 1 century ago.
As mentioned by Antonio earlier, I will walk you through the main pillars of the European strategy, and we will focus mainly on three main actions.
First, we further differentiate brand and expand the market coverage.
Second, we will drive cost competitiveness.
And third, we will increase capacity utilization.
But first, I want to start with our customers because they define who we are. And they are at the center of everything we do. We have one of the largest car park in Europe, with over 34 million customers, and we are ready to serve millions more and inspire them with our iconic brands and with our strong dealer network across Europe. Almost 4,000 dealers supporting us every day.
But let's look at a larger Europe today. In '25, we sold 2.5 million vehicles in 45 countries. Almost half of Stellantis global volume. In market share, we are #2 OEM in Europe. We are #1 in commercial vehicle. We are #1 in hybrids. And we lead the market in France and Italy. This is a strong foundation.
Today, we will share our plans for a larger Europe. Sustainable and profitable growth driven by iconic brand and new competitive platforms.
To start, a quick look to the first quarter results. If you compare with quarter 1 '25, shipments were up 12%. Market share increased 20 basis points. BEV sales were up 24% and showing that our electrification strategy is gaining momentum. AOI is at breakeven despite pressure on margin driven by electrification and improved compared with the prior quarter. Overall, this results confirm a positive trend for Europe.
But let me now highlight three key assumptions about the European market. First, we expect the market to be stable at around 50 million units.
Second, the market is concentrated in three main segments: the small vehicle, the compact vehicle and the vans. Together, they represent more than 75% of the total market, and those are our target segment.
Third, the most important regulation is shaping the European market with a clear trend towards accelerated electrification. By the end of the decade, the share of fully electric vehicle will triple on both passenger car and commercial vehicle.
The European Union has engaged a review of the CO2 legislation. This discussion are ongoing to ease the compliance trajectory. In particularly, the target on like commercial vehicle do not reflect the overall market demand for BEVs.
In addition, the European Union proposed to introduce Made in Europe requirements with Industrial Accelerator Act. At Stellantis, we strongly support both of these developments, and we are in a good dialogue with institution. The Made in Europe policy is key to create an effective level playing field for all the players in the European market. This will protect European jobs and manufacturing, and strained relative competitiveness and resilience of the European automotive industry.
Our plan incorporates these policy directions and it is designed to deliver as they are enacted. But now let's move to our strategy for profitable growth. This is basically based on three pillars that I mentioned on the first slide.
First, will further differentiate our brands and expand the market coverage. Each brand has a clear mission and new products will expand the market coverage by 25% and we will reinforce the offering of the [ program ] business unit.
Second, we will drive cost competitiveness. Thanks to the new platform, we will narrow the [ BEIC ] cost gap and electrify in a profitable way. On top of that, the value creation program will deliver EUR 3 billion an cost optimization.
Third, we will improve industrial utilization from 60% to 80%, reducing the total capacity installed by 100,000 units. So let me expand on it, starting with our iconic brands.
In a few moments, the brand show we showed a strong complementarity of the European brands. both from a geographical perspective and through the very distinctive product attributes, reflecting their region and the strength.
For now, I want to highlight three clear decision to differentiate our brand across [ Europe ]. Number one, as a global company, we leverage on global asset shared platform, powertrain and technologies. In Europe, these are launched by our global brands that are Peugeot and Fiat.
The number two, our regional brands with scale these assets, Opel [ Voxol ], Citroen and [ Alfa Romeo ]. Each brand adds its own DNA and brand expression.
Third, [ DS ] and [ Lancer ] being specialty brand will manage -- will be managed by Citroen and Fiat, reflecting the largely national identity focused on France and Italy. Pairing [ DS ]with Citroen, and [ Lancer ] with Fiat will enable scale and efficiency while preserving each brand's identity.
Across our brand, we will launch more than 25 all new products and over 25 refreshed product. These launches will increase market coverage by 25%, renewing almost the world portfolio in Europe. And on power train, we believe in giving customers the freedom of choice. For this reason, we will expand the powertrain coverage by 35% through new BEVs, full hybrid and plug-in hybrids.
As you can see, our product and technology plan is significant and not at all capital constraint. Of the 50 launches mentioned the majority will be in the A, B and C segment. Stellantis is the #1 in small vehicle. And we will build on our leadership while improving profitability with 23 launches in the A and B segment. While C segment is where we see strong growth potential for Stellantis. This segment represents 30% of the European market by volume and it is also the largest profit pool. So growing in C segment is a key part of the strategy for profitability and BEV sales of the Stellantis. We will have 20 launches covering the range of the segment from affordable, to compact, to crossover model.
Let me now turn to [ Pro One ] our business unit dedicated to serve professional customer and the key driver for success of Stellantis in Europe. I have the privilege to lead this business unit globally. And today [ Pro One ] is the #1 in Europe and the #2 worldwide. Our ambition is to be the global #1.
And we will achieve this by focusing two main things. First, product with two new best-in-class van generation and 11 new vehicle globally. Second, we are currently launching a state-of-the-art service ecosystem for professionals to increase our customer productivity and lower the total cost of ownership.
Let's move now to our second pillar, the cost competitiveness. Stella One is the perfect example of the way we develop global assets and scale them across all the brands, spending better and not spending more.
As explained by Ned and Davide, the Stella One delivers new technology, reduce the cost by 20% and it is competitive across all legal electrification.
So how do we deploy it? Peugeot will be the first brand launching in 2027, followed by Opel, Jeep and [ Alfa Romeo ]. Combining the platform with their unique DNA to sell specific customer and markets. At true scale, Stella One, we reached up to 1 million vehicles per year in Europe.
Another great example is the new [ e-Car ] platform. In 2028, we will open a new segment of the European market focus on affordability in short, full electric, below EUR 15,000. With the car, we reach cost parity between the BEV and ICE. This is a major milestone to make electrification profitable. [ Endeca ] will be also a strong CO2 compliance tool, proudly made in Europe and the production will start in [ Pomiliano ] plant.
Further driving cost competitiveness topic, Stellantis will be even stronger in Europe by partnering with other OEMs. Antonio mentioned the strong momentum of [ LEAP ] motor International. Our 51 joint venture with [indiscernible] Motor. In '25, it sold 34,000 in Europe -- a vehicle in Europe, and the number will double this year. We will expand even more on this partnership by sharing industrial capacity in [ Zaragoza ] and Madrid and joining forces and supplier base.
Now on Dongfeng, our historical partner in China. With Dongfeng we will create a new European joint venture, 51% owned by Stellantis and increased the commercial collaboration in Europe and for sales and distribution, share industrial capacity in rent and corporate on parcels in engineering.
Strong partnerships create value on both sides. On product portfolio, our product portfolio are complementary, avoiding commercial overlap. Industrially, they unlock scale, capitalize cost synergy and they accelerate execution.
The third pillar of our strategy is improving industrial capacity utilization. Today, our utilization rate is around 60%. And our ambition is to be the best-in-class at 80%. We will reduce production capacity by [ 800,000 ] units without any plant shutdown. And basically, we increased utilization in three main ways. The first by repurposing plant, and this is what we recently announced for [indiscernible] where the plant will move from vehicle assembly to par manufacturing and circular economy hub. Second, we are sharing capacity with our partner, expanding in Europe. As we already mentioned, [ Zaragoza ], Madrid and [ Ran ]. Last but not least, an increase in volume driven by new launches and market coverage expansion. This industrial transformation is a fundamental step to improve profitability. But now it's time to give you more color on our brand and product. And to do that, I invite the four brand CEOs to join me on the stage.
[Presentation]
Good morning. So my name is Olivier François. Today, our pitch is pretty simple, and it's twofold. Message number one, Europe is not one market. It's many markets, different driving cultures, different needs, different realities. So it's complicated maybe, but that's exactly our edge, our advantage. Because message number two, one-size-fits-all does not win in Europe. The winning formula is a handful of distinct brands with the right synergies underneath. Emanuele spoke to the synergies. And later, we'll talk about the complementarity. So for now, our European showroom, how will it benefit from what Emanuele just described.
So since I have the stage, I can start with Fiat. So it's a global brand with 1.4 million cars this year. Now keep in mind, half of my sales are outside Europe. So I need a very efficient lineup. So this is my showroom in Europe today.
On one hand, micro mobility, this is Topolino, a tremendous success so far, then urban mobility, [ Quattrolino ], [ Mandina ] and Grande Panda, and these are two love brands, absolute segment leaders. So what's next? Fiat remains big at small, committed to urban mobility. So we will add a 3-wheeler in typically Italian spirits, cutest object on planet [indiscernible] Emanuele and soon a bigger sister for Topolino, two doors, four seats, then a new [ Cincotento ] and our own version of the e-Car. So what you see here, by the way, is just a sketch. Actually, we had fun with a bunch of our -- with our design team and a bunch of students altogether, trying to imagine the future of urban mobility. They really inspired us and trust me. The final design, the real design is stunning. It's not a revival of an icon. It's literally the next icon.
Next, and I'll show it live during the breakup session the new Fiat [ Greasly ]. And you see two silhouettes. Why? Because again, it's decided -- is designed for three regions of the world. It completes the Panda and Grande Panda family. Same DNA, still built on smart car, but it's a big animal. It will not just elevate the market share. It will elevate everything, the mix, the revenue, the margins, the brand.
Bottom line, five all new cars, three mobility devices, you see with Fiat, everything you heard from Antonio and Emanuele really comes to life. And with that, let me hand it over to Alain for Peugeot.
Thank you, Olivier. Well, I can tell you one thing today with the lion is coming. Bond 216 years ago, today, Peugeot is a leading European upper mainstream brand with a global footprint.
Today, we'll cover the B, the C and the D segment with a lineup of seven beautiful and very competitive models. And by 2030, we will introduce seven new models, including four that will expand market coverage and profitability. Starting in the B segment. we will add two brand-new BEV models based on the efficient Stella One platform. These cars will complement the existing 208 and 2008 in the B segment. In the C segment, we renew our entire lineup and add a brand new compact multi-energy CSUV also based on the new Stella One platform. That will double our coverage in the CSUV segment, the most important profit pool in the European markets.
And at the top of the range, where as part of our renewed partnership with Dongfeng, we will add a dynamic D segment offer. All of our new models will feature the latest efficient BEV technology, as well as innovations, including our unique and patented hyper square with Steer by Wire, all designed to build on our brand promise. And so we are serious about delivering leisure to our customers. And with that, I hand it over to you, Xavier for Citroen.
Thank you, Alain, and good morning. In Europe, Citroen is focused on one thing: delivering more value where customers feel it most. And you see behind me in less than 2 years, we have renewed our entire lineup starting with the C3 up to the C5 Aircross. And our products are designed around 1 simple idea. What really matters to people? Simplicity, comfort, affordability and freedom of choice.
The result, Citroen has delivered a double-digit growth since the beginning of the year. But beyond the numbers, one thing is becoming clear again. Life is better in a Citroen.
Yes. And Citroen, tomorrow starts today. By 2030, Citroen will have seven launches. We will renew the complete segments where we today operate focusing on accessible mobility. And we will expand our lineup with two additional models that will cover new profit pools. But products alone do not create icons. Icons create emotion. I can't reconnect brands with people. And today, one icon is about to return. Yes, the [ Deutsche ] Vol, the TCV is back.
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Sorry, we shot the car in a tunnel. If you want to see it with full light, you are highly invited in Paris Motor Show in October. Wait a bit wait a bit.
And you know it's a very important moment because in 1948, the TCV gave freedom of mobility to millions. And 8 years later, the new TCV will democratize electric mobility, 100% electric, made in Europe below EUR 15,000 a true people's car designed for real life.
For me, the future of mobility will not be won by the most complex cars, but by the simplest and the most intuitive ones, because what truly matters is to be relevant, simply relevant. The return of the TCV Citroen is back to the future, Florian, up to you.
Thank you, Xavier. Opel is firmly rooted in Northern Europe, Germany and with Vauxhall the U.K., our home countries. It is here where electrification is the most advanced in Europe today. And our strong northern footprint is a key asset to the group for geographical coverage.
By 2030, Opel will bring four new models to the market. We will renew existing bestsellers, such as the [ CASA ] and expand our coverage in the CSUV segment. The [ CASA ] is an icon for us with more than 15 million units sold. The next-generation [ CASA ] will be based on Stella One. It will make electric mobility exciting and accessible to everyone.
[indiscernible] expansion, we will further strengthen Opel's portfolio coverage with a significant new entry in Europe's most important segment. Opel's new full battery electric CSUV is a blueprint for efficient global collaboration. It represents a major step forward for the brand, designed and created by Opel in Germany, it features our next-generation design and driving experience. We will develop this vehicle in partnership with [ Leap ] Motor and in less than 2 years. Efficient manufacturing in Europe, high-quality standards and advanced technology, the project delivers strong cost competitiveness and the best of both worlds. It will confidently represent Opel in the biggest segment in Europe. And with this, back to you, Emanuele.
Thank you, Flora. Let me just now give a few words on par a very special brand for Stellantis. Today, we have a very exciting lineup. And in the coming year, this fantastic brand will fully benefit for our global assets, including the Stella One, while amplifying it's DNA done by patient performance and bold Italian character. And more to come for sure with Alfa Romeo. And now back to mainstream brands, starting with Alain.
Well, thank you, Emanuele. So let's recap how each of us is going to expand in Europe by 2030. For Peugeot, where we will launch seven new models, and I mean brand new models, not face lifts between now and 2030. Four of these will be based on the new Stella One platform. The first comes next year in the shape of the new E208, a real game changer for us and for the European market, I would say. This rapid rollout will generate scale and efficiency for Stellantis and will increase Peugeot profitable market coverage by 15 points to 60% in 2030.
And with four new models until 2030 for Opel, we will strengthen our presence in core European segments, and we will be able to offer our customers accessible appealing and technologically advanced local products.
The models I showed you in detail, the next-generation [ CASA ] and the new open CSUV are testament to our benchmark global collaboration, embodying strong Opel design, Stellantis architectures and advanced technology from our partnership. They will be made in Europe, launched very soon and ensure long-term value creation for Stellantis.
And Citroen is back on the offensive. Before 2030, we'll launch three major new products, leveraging the competitiveness of Smart Car platform, and we will grow where value matters most.
And thanks to the e-Car with this new platform, we can finally bring back the TCV, not as a nostalgic icon, but as a bold new answer to accessible electric mobility. 15 points of additional market coverage different by two additional segments. And thanks today, Citroen will be stronger, broader and more relevant than ever.
And last but not least, Fiat, five new vehicles, massive expansion of coverage from 1 quarter to the market last year to half of it. As I mentioned, the backbone of our lineup will be smart car Grande Panda, [ Grazeley ] and in 2029, a third family mover, by the way, a super innovative concept, a potential market disruptor. And hopefully, I'll present it in Paris as well. Extra boost our e-car, you heard from Emanuele before. And by the way, Emanuele, the floor is yours again.
Thank you, Olivier. Now you see each brand cover around 50% of the market, but that is where our strong complementarity comes in. because together, we reach over 90% of mainstream industry coverage. So all we have described in this presentation translate into clear financial target.
Revenue growth up to 50% as a result of product launches and technology introduction together with increased BEV competitiveness. Three to Five AOI margin driven by revenue growth, more cost competitive vehicle platform and by EUR 3 billion cost optimization through the value creation program with our CFO, Joao will describe in a few moments.
And this is the story for Europe, a rational business approach based on three strategic pillars. But also an emotional colorful and competitive lineup with our amazing brands. Thank you very much.
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Please welcome Herlander Zola, Chief Operating Officer, South America.
Good morning, good morning all. Let me start with the key elements of our strategy in South America. Building on Antonio's message, I will go deeper into how we approach the region and how we will use our position to sustain leadership and deliver consistent results. I will walk you through that, please follow me.
First, let's put South America into perspective. In 2025, the region represented 5% of global industry and almost 20% of talents global sales. As we can see here, we closed the year as #1 in sales with more than 1 million units sold, more than 22% market share and over 30% in Brazil and Argentina. This leadership comes from Fiat and light commercial vehicles dominance. The strength of Jeep SUVs and ramp pickups and the solid contribution of Peugeot and Citroen, mainly in Argentina and Chile.
But now the real challenge, how do we keep this position while Chinese brands advance. In Brazil and Argentina, we start from a position that no Chinese player can replicate, high level of localization the strongest supplier base of the industry, a strong dealer network and more than 4,000 local engineers who developed smart and affordable technologies, such as bio hybrid the combination of electric and ethanol-based engines. This local capability allows us to deeply understand customer needs and deliver the right products for them.
The Chinese offensive is real. It's aggressive. Many OEMs are losing market share. Our strategy we allow us to keep our leadership and our consistent results. And how do we face what is coming?
First, we protect the interest segment here, Chinese brands are not strong. It's a [ NIC ] segment. Brand equity, trust counts a lot. And we are going to bring three new Fiat products to be even stronger in that market.
Second, we expand our leadership in pickups, where the profitable is largest and the Chinese brands have not entered yet. We leveraged the power of the Ram brand. We launched the new Ram [indiscernible] and we also renewed three new pickups, Ram Rampage, Fiat [indiscernible] and Fiat [ Estrada ]. We have a proven track record here with products fully developed in the region such as Fiat [ Estrada ] that has been the market leader for 5 years in a row.
And third, we compete head on in with the strength of Jeep brand, expanding the coverage with [ Avenger ] and a fully renewed lineup with the new [ Renegade ], new [ Compass ] and new [ Commander ]. With [ Leap ] motor, we also improved our competitiveness in SUVs, exploring the complementarity of their portfolio and taking advantage of the local production at [ Pernod boco ] plant. This is strategic. It's a very important leverage against the other OEMs in the region.
And now let's move to our next growth frontier. Chile, Colombia and the [ Andean ] region. Industry volumes here are expected to grow more than 23% in the next 5 years, reaching over 1.5 million vehicles. These are open markets. We have a very good brand image, especially with Jeep and Peugeot. But until now, we could not use this advantage because more than 60% of the industry comes from Asian sourcing. And this is changing, now we have a clear strategic opportunity driven by [ Leap ] motor and the other new partnerships. This enables us to serve new Jeep and Peugeot products from China and India and supports our ambition to grow from 5% to 10% market share in these markets.
Looking ahead to 2030, our ambition is clear: deliver consistent double-digit revenue growth, sustained profitability between 8% and 10% and maintain our leadership in South America. We have strong brands, a solid industrial footprint and the ability to translate local customer insights into successful products. This combined with the pickup expansion plan and our strategic partnerships gives us full confidence that we are going to sustain our leadership and our profitability. Thank you for the attention.
Please welcome Samir Cherfan, Chief Operating Officer, Middle East and Africa.
Thank you. Good morning. In the Middle East and Africa, as shared by Antonio, we aim to increase our revenues by 40% while keeping a double-digit margin. We will achieve this through a competitive transformation of our vehicle sourcing, leveraging and expanding our manufacturing footprint in the region for the region, and importing key products from Asia.
Middle East and Africa is a diverse region, full of potential, one of the fastest-growing automotive markets in the world. Today, it represents 25% of the world population. In 50 years, that figure will reach 40% and the region is very rich in resources, oil, gas, minerals.
Stellantis is already at scale in that region. We have been the #2 player in EMEA for 4 consecutive years. We sell over 0.5 million vehicles with a double-digit margin. Our top 6 brands represent 90% of our sales. We enable all this with 2,000 sales and after sales touch points, nearly 1 million vehicle of manufacturing capacity and the proper skills and partnerships.
In the Mediterranean crown, the north of the region, we lead the market with 25% market share. Our plants in Morocco and Turkey are among the most competitive in Stellantis.
At the same time, we have untapped potentials, Middle East, South Africa. This is is especially true for Jeep despite the strong brand equity in these markets.
So the strategy, we want to transform competitively the vehicle sourcing, want to go from 30% of the vehicles produced in the region or coming from Asia to 90%, 90% of competitive sourcing.
In the Mediterranean and Crown, we'll fully utilize the 800,000 unit capacity in Turkey and Morocco, restore Fiat's leadership in Turkey and provide competitive products across all markets.
In Algeria, we are the main player today. We will scale manufacturing and reduce costs through deeper localization. In the Middle East and South Africa, we will use competitive imports from Asia to complement our regional offer. This transformation is already in motion. We will be at 75% of execution by '28.
Now the product plan. It is built around scale, capital discipline and focus. 22 car lines will generate 90% of our sales. We are investing EUR 300 million per year by leveraging regional incentives and partners co-investments.
For example, in Turkey, Tofas, our joint venture with Koc Group, plays a key role in the development, manufacturing and distribution. Half of these 22 car lines will be coming from Asia. The other half will be produced locally in Middle East, Africa, including Jeep CKD programs from India and China. In the North, we'll mainly leverage the smart car platform, B and C segment cars, plus a full range of vans. In the South, we will complement with SUVs and pickups sourced at best benchmark costs from Asia.
To conclude, revenue is up 40% while sustaining a double-digit margin; a competitive transformation of our vehicle sourcing reaching 90% of the sales sourced from the region or from Asia; maximize the use of our best-in-class plants in Morocco and Turkey, scale our operations in Algeria; address performance shortfalls in South Africa and Middle East. Middle East and Africa will continue to be a profitable business growth engine for Stellantis. Thank you.
Please welcome Gregoire Olivier, Chief Operating Officer, Asia Pacific.
Good morning, everyone. Being the last one before the break, I'm going to focus on the essential. Antonio told us earlier, in Asia Pacific, we will focus on expanding our strategic partnerships to grow locally and export to other regions. We have, in APAC, something unique: Partnerships that no one else in our industry has.
First, Leapmotor. In the fourth list of new Chinese BEV manufacturers, Neo, Loto, Xiaopeng, Leapmotor, Leapmotor is the one growing the fastest with the most competitive cost position and the largest volume. 600,000 battery electric vehicle BEVs sold in 2025 and world's global BEV manufacturer, #6.
We are Leapmotor's largest shareholder with a close to 20% ownership, have 2 Board members and through Leapmotor International, which is a 51% Stellantis entity, have exclusivity of selling Leapmotor cars outside of China. Leapmotor International gets the cars at cost from Leapmotor. And 18 months after launch is at 11,000 BEV sold per month in March and April and growing.
Second partnership, Dongfeng. Having launched Citroen in China in 1992, Dongfeng has been a partner of Stellantis for the last 34 years. We have decided with Dongfeng to develop and manufacture in our Chinese JV, DPCA, 2 new Jeep and 2 new Peugeot model that we will sell around the world. This new BEV and PHEV at Chinese cost for Jeep and Peugeot customers in a number of export countries will be a significant contributor to Stellantis' growth, profit and energy transition. They will be mostly financed by DPCA, which will allow us to remain asset-light in the region.
And then Tata Motors. Tata Motors has been a Stellantis partner for more than 20 years and will provide a highly competitive platform to develop a new Jeep car that will be developed in India, assembled in India in our Stellantis-Tata JV in India for the world.
With those 4 new launches with Dongfeng and the fifth one with Tata, plus our current Citroen smart car program in India, we will profitably grow in APAC. But more importantly, we will export those highly competitive cars to more than 50 countries around the world, generating a cumulative amount of more than EUR 60 billion of vehicle and model sales over the next 5 years.
To conclude, our ambition for APAC is threefold. Number one, we will maximize our Leapmotor partnership synergies, which means grow Leapmotor International with the first milestone at 180,000 BEVs sold next year. Number two, we will maximize Dongfeng and Tata partnership synergies with 100,000 localized cars sold globally in 2028 and growing. Number three, in the APAC region, adding our imports from North America and from Europe, we will double in size with an AOI margin between 4% and 6%. Thank you very much.
Please welcome back, Charlie Christman.
Well, I hope you've been enjoying our presentation so far today. Just a couple of housekeeping items to mention before we go to the break. So for the next part of the day, we have some very exciting breakout sessions planned for all of you. These will be held in our design centers. So we have some shuttles just outside to transfer you over. You'll get on them in the courtyard where you arrived this morning. Now please note the color of your badges. These colors indicate which group you will be in once you arrive. Guides holding your color will be waiting for you there. Please make your way to them, and they'll lead you to your first module. All of you will attend all of the modules, but you'll remain together with your color group. Now if you need to use the restroom, there's restrooms here over there. And there will also be refreshments for you there if you need them.
Now due to the confidential nature of some of the things that you're going to see over there, we ask that, to the extent possible, you leave your electronics here in this room. Security will be in the room at all times to make sure that your items stay safe, and we'll be returning back here for lunch and for the rest of the presentations after these sessions.
So it is now about 10:09. The first module will start at about 10:25. I hope you enjoy it, and we'll see you back here later today. Thank you.
Please welcome Jon Nelson, Chief Executive Officer, Stellantis Financial Services.
Good afternoon, everyone. I'm excited to have the opportunity to talk with you today about our financial services business and the actions that we are taking to build upon this important asset for the group.
As Antonio highlighted, we have a well-established global foundation for Stellantis Financial Services that helps us to power customer experience. Now this business may be larger than you know, having managed over EUR 85 billion of average net receivables in 2025. In the next 10 minutes, I'll provide an overview of the foundation of this business and why it matters strategically to the group. From there, I'll take you through the levers that we are using to scale it for profitable resilient growth by building on our global foundation, diversifying our revenue and profit streams and increasing our wholesale and retail penetration. What resulted is a strategic asset for Stellantis that we will use to drive customer loyalty, engagement and ultimately, renewal.
Now financial services is not a support function. Rather, SFS helps enable a customer-centric approach by engaging the customer at every stage of the life cycle, shaping affordability from the first interaction, integrating vehicle finance and insurance at purchase, sustaining engagement throughout ownership and ultimately, delivering a data-driven journey at renewal. The impact is measurable. Customers that finance through SFS return up to 3 years earlier for the next vehicle, and they show up to 20% higher brand loyalty than customers who pay cash or financed through a retail bank.
Now what makes our position especially compelling is this. We already have a solid global foundation. We are not yet at the scale of our competition. This gap represents a significant opportunity for our customers, for the business and ultimately for you as shareholders.
Now financial services is not only a growth driver, it's also a stabilizer. When credit markets tighten and sales volumes contract, Stellantis Financial Services helps to keep the business moving. It provides credit to dealers and the retail customers precisely when outside financing is drying up, stimulating demand when it matters most. Equally as important, the portfolio generates cash and profit even as sales slow, sustaining the business through downturns without the need for significant additional resources. And when markets recover, SFS is the engine that helps to recapture customers and accelerate sales velocity. It doesn't just help us to survive a downturn, it positions us to emerge stronger.
Now as mentioned previously, Stellantis Financial Services entities managed average net receivables in 2025 worth over EUR 85 billion. We operate across key markets worldwide with captive consolidated businesses here in the United States, Brazil, China and Morocco. Strong joint ventures also with leading partners across Europe, Turkey, Argentina and Mexico, and we're not done. In the near term, we're targeting expansion into Canada and into select markets in the Middle East and Africa. Markets where Stellantis already has a meaningful commercial presence and where a stronger financial services capability will directly support the group's growth and profitability and resilience.
Nowhere is our execution and our opportunity more tangible than it is here in the United States. We acquired our U.S. captive business in 2021. At that time, we had almost EUR 1 billion in net receivables in that business. Today, the portfolio in the U.S. stands at more than EUR 21 billion, 25x its starting size. We are the #1 financier of Stellantis-branded new vehicles in the United States with new originations exceeding EUR 1 billion per month.
But our growth has been disciplined. An average retail FICO score of 762 reflects the credit quality that we have built into the portfolio. But our runway for growth remains significant. We have line of sight to doubling the portfolio over the medium term. Our recently approved industrial lending company bank charter will help to accelerate this, lowering our cost of funding, expanding our product offerings and improving net interest margin.
The U.S. is the playbook: Enter a market, scale with discipline, support dealers and customers. And what results is the generation of profit and cash flow. We continue to use this model as we scale the business in the U.S. and as we enter into new markets.
The results from this is a very clear path to growth, built on 3 executable priorities. First, we will build on our strong foundation, and we will grow our geographic footprint, expanding our activities into Canada and the Middle East, as I mentioned. Second, we will continue to scale our insurance and ancillary service offerings alongside traditional financing. Profit from these will double between 2025 and 2030, broadening our revenue base and reducing earnings volatility.
Now lastly, while our activities in Europe are more mature, meaningful headroom remains to grow wholesale and retail penetration to competitive benchmark levels in many markets, most notably here in the United States, where we're still in the process of scaling the business acquired in 2021. But closing the gap to these benchmarks is not some distant ambition. We are investing now in dealer and customer-facing tools and systems and in a broader, more compelling suite of finance and insurance products. Better experiences drive higher penetration, and higher penetration drives growth.
So let me bring this to the bottom line. These initiatives will drive adjusted operating income above EUR 1.5 billion by 2030 with a midterm return on equity that's in line with industry benchmarks in the range of the low to mid-teens.
Now I'd like to address 2025 directly. Our results here were affected by an industry-wide motor finance redress program in the United Kingdom and by lease portfolio impairment charges, that were tied to residual value deterioration primarily related to 2 now-discontinued nameplates in the United States. These issues are largely behind us. And the trajectory for 2026 forward reflects the underlying earnings power of the business and of the asset portfolio.
Now SFS will largely fund its own growth with limited net investment required from Stellantis through 2027. But from 2028 forward, financial services turns cash flow positive for the parent. And net dividends to Stellantis grow progressively from there, reaching EUR 500 million in 2030.
In closing, we are transforming financial services into a lifetime customer engagement business. This business is a countercyclical shock absorber that reinforces the group's resilience across the cycle. We're actively scaling an EUR 85-plus billion platform with significant upside ahead, resulting in a high-return growth engine, one that will deliver more than EUR 1.5 billion of AOI in 2030, along with a growing dividend contribution to the group. This is the full picture of Stellantis Financial Services, expanding, resilient and increasingly valuable. Thank you.
Please welcome Joao Laranjo, Chief Financial Officer of Stellantis.
Thank you. Good afternoon, everyone. It is a privilege to be with you on this important day for our company. Over the next 20 minutes, I will present to you our FaSTLane 2030 financial framework. FaSTLane 2030 is about measurable financial outcomes that you, our investors, can track and hold us accountable for.
Five priorities anchor our plan. First, we restore revenue growth. By 2030, revenue will grow by more than 20% and driven by broader market coverage, a stronger product portfolio and sharper local execution; second, deliver structural cost reduction. Through a comprehensive value creation program, we are targeting EUR 6 billion of annual cost reduction run rate by 2028. Third is scale financial services. By 2030, financial services is expected to contribute more than EUR 1.5 billion of incremental AOI. Fourth, allocate capital towards our highest return opportunities. Over the planned period, we will deploy more than EUR 60 billion of investment based on a disciplined, return-based approach to capital allocation. And fifth, generate sustainable profitability and free cash flow. Each year of the plan will deliver improved results, leading to 7% AOI margins and EUR 6 billion of annual free cash flow by 2030.
Let me now turn to the financial path through 2030. Revenue growth of 23% from EUR 154 billion in 2025 to EUR 190 billion by 2030. This revenue growth is broad-based, and I'll walk you through the contribution by region shortly. Value creation program to deliver EUR 6 billion by 2028 and continue to increase through 2030. This is a structural, multiyear and embedded in how we operate. AOI margin expansion to 7% of revenue by 2030 with a recovery to 5% margin already in 2028. I'll explain the key drivers in the coming pages, and industrial free cash flow will turn around from negative EUR 4.5 billion in 2025 to positive EUR 6 billion by 2030, driven by higher profitability and targeted capital allocation.
Before we move into the details of FaSTLane 2030, let me first reinforce our outlook for the remainder of the year. Our first quarter results show that we are moving in the right direction. As we stated on our first quarter earnings call, we are confident in the full year guidance we provided in February, despite inflationary pressures, including raw material cost increases that could represent up to the equivalent of 1% of revenue on a run rate basis in the following quarters of 2026. We're also closely monitoring the developments of USMCA negotiations and the ongoing legislative review of European regulations.
Let me now turn to the financial drivers of our FaSTLane 2030 plan. Let me start with how we get to 2028, a critical milestone in our plan. Top line growth contributes 2.1 points of margin improvement. The volume growth is driven primarily by a refreshed lineup and introduction of new vehicles in new segments to expand market coverage. Industrial cost savings contribute 5 points. This is the largest driver of improvement, reflecting the EUR 6 billion of value creation program, which is equivalent to 3.6 points of margin uplift and 0.9 points from other efficiencies, including the benefit of higher plant capacity utilization. It also includes 0.5 points from the nonrepeat adjustments in 2025. Financial service contributes a further 0.5 points. Against those benefits, we have included a headwind of 1.4 points from raw material inflation. We are also planning for a 0.6 point increase in SG&A spend to support growth.
Let me now walk you through our path for positive industrial free cash flow. As we outlined in our 2026 guidance, we expect a return to positive industrial free cash flow for the full year 2027. The trajectory is already improving. In the first quarter of 2026, industrial free cash flow improved by EUR 1.1 billion versus the first quarter of 2025. As profitability continues to recover supported by higher volumes and the ramp-up of value creation program savings, AOI expansion will be the primary engine of cash generation. Working capital will be a meaningful contributor, more than reversing the negative working capital in 2025 as volume growth improves operating efficiency across the business. Investment will be slightly higher in 2027 versus 2025 to fund our product investments. Finally, cash payments related to the H2 2025 charts will continue, but progressively decrease through 2030. As a result, we are confident that industrial free cash flow will turn positive in 2027. Then in 2028, we expect to reach EUR 3 billion of industrial free cash flow, driven primarily by further AOI improvement including the full run rate benefit of EUR 6 billion from the value creation program.
Talking about growth, every region has an important role to play in our profitable growth plan. In North America, we are targeting 25% revenue growth and 8% to 10% AOI margin by 2030. Over the planned period, North America will represent 60% of the total profit increase. In the larger Europe, we are targeting 15% revenue growth and a 3% to 5% AOI margin. In South America, we are targeting 10% revenue growth while sustaining 8% to 10% AOI margins. And in the Middle East and Africa, we are targeting 40% revenue growth with 10% to 12% AOI margin. This growth is supported by product actions explained by my colleagues today which are funded by more than EUR 60 billion of investment over the planned period, leveraging the partnerships to further amplify our capital reach.
Next, let's turn to costs. When Antonio talks about industrial execution, he's talking about 3 things: First, quality; second, industrial efficiency, both are already being addressed and showing signs of improvement. The third item is product cost, which is central to the value creation program. This is one of the most important levers behind our margin expansion. DCP is a multiyear enterprise-wide program designed to deliver EUR 6 billion of annual cost reduction by 2028 versus 2025 baseline with additional opportunity beyond that. And why today's discussion emphasizes the cost side of value creation. This program is broader than cost reduction and includes all aspects of our business. The same rigor, cadence and execution discipline we are applying to cost has also been applied to commercial performance and will contribute to our revenue growth targets. The cost-focused portion of the program represents EUR 6 billion with savings balanced between larger Europe and North America. These savings will be delivered through 4 enterprise-wide levers: components, manufacturing, quality and logistics and indirect costs. The largest opportunity is component costs. which represent 75% of our new vehicle costs. Our focus is to reduce components cost through peer benchmarking, design-to-cost analysis and a structured cross-functional work with our suppliers. We are taking a systematic approach.
In 2026, we worked through more than 80% of the total components cost base across in large Europe and North America. As an example, we have already launched a first wave covering approximately 35% of our components cost with dedicated teams from engineering, purchasing, cost engineering and finance. To date, they have generated thousands of initiatives and some of the items are individually worth more than EUR 10 million of recurring AOI impact. The strength of this program is its scale, agility and integration. It does not depend on one initiative, one function or one region.
Moving to investment. Smart capital allocation is at the core of our model. Over the playing filed, we will deploy more than EUR 60 billion in investment. Approximately 60% of our investment will be allocated to brands and products and 40% to global platforms and technologies. Within product investment, the largest allocation will go to North America, 60% of the product investment or approximately EUR 22 billion during the planned period. This will ensure strong support for our largest profitable opportunity. Throughout the plan, we expect annual investment to remain stable at roughly 7% of net revenues supported by the benefits of our global scale, common platforms and strategic partnerships.
Turning to the balance sheet. Our priority is to convert margin recovery into sustainable cash generation, while preserving a strong and flexible financial position. We entered the plan with EUR 6.7 billion of industrial net cash at the end of 2025. From 2027 onwards, we will generate positive free cash flow after fund investment at 7% of revenues. This cash generation will support shareholder returns while maintaining a strong balance sheet with more than EUR 15 billion of industrial net cash and approximately EUR 57 billion of total industrial liquidity at the end of 2030.
If we step back, the plan we have outlined today is designed to make Stellantis a fundamentally more resilient company. That resiliency starts with a more diversified global revenue base, higher capacity utilization, cost-efficient platforms and smart capital allocation. It is reinforced by partnerships that amplify the impact of our capital, technology flexibility across regulatory environments, a growing financial sales contribution and a strong liquidity profile supported by positive industrial free cash flow. Together, these pillars gives us the ability to navigate volatility, continue invest for profitable growth and protect shareholder returns through the cycle.
Let me close by summarizing our FaSTLane 2030 financial targets. We are moving from the reset in 2025 to stabilization and renewal growth in 2026. Our first quarter performance confirms that we are on track with our 2026 guidance. From there, we expect continuous improvement, positive industrial free cash flow in 2027, 5% AOI margins by 2028, and by 2030, EUR 109 billion in revenue, 7% AOI margins and EUR 6 billion of annual industrial free cash flow. These targets reflect the financial outcomes of the strategic choice we have already made across brands, regions, capital allocation, cost structure and partnerships.
Thank you for your time today. We look forward to updating you quarter by quarter on our FaSTLane 2030 progress.
Please welcome back Antonio Filosa.
As we come to the end of this Investor Day, let me first thank you all for spending your valuable time with us today. And I also want to thank all the people in Stellantis who have worked hard to support me and the management team in preparing the plant and this very important day. We have shared with you our plan for the next 5 years, FaSTLane 2030. This plan maps the path forward for Stellantis, a journey which this team started nearly 12 months ago.
At Stellantis, we move people with brands and products they love and they trust. This is our clear reference to our customer as we have placed them at the center of our plan and of everything we do every day at Stellantis.
Now let me leave you with a few key takeaways. First, we simplify our portfolio. With our 4 global brands and our 5 regional brands and program business unit serving professional customers. Second, we will allocate our capital efficiently. We will invest more than EUR 60 billion by 2030, supporting over 60 new vehicle launches. We will develop global technologies and improve EV competitiveness, and we will have a special focus on North America. Third, strategic partnerships. There will be a real force multiplier partnership with other OEMs and with the best technology providers. They will further optimize our capital efficiency, accelerate time to market, support our EV competitiveness and improve manufacturing capacity utilization. Fourth, we optimize our industrial footprint. Europe, North America and Middle East and Africa will significantly increase capacity utilization. In Europe, we will reduce our total capacity by more than 800,000 units. In the U.S., we will increase production, mitigated the impact of tariffs. Fifth, execution, execution, execution. My background is in manufacturing. And this team will create an industrial machine with faster time to market, top quartile quality and significantly improved capacity utilization to execute on our product promise to all our customers. And finally, the regions. Regions are where the rubber hits the road. As you heard today from my colleagues, we empower our regions. Each of them has built a tailored plan and owns the planned execution. And here to conclude our day is a reminder of what we intend to deliver.
We accept to return to positive free cash flow in 2027. By 2028, our plan is to reach EUR 175 billion in net revenues, 5% AOI margins, EUR 3 billion of free cash flow. By 2030, EUR 190 billion in net revenues, 7% AOI margins, EUR 6 billion of free cash flow with top quartile quality in all regions and in all segments by 2028.
Ladies and gentlemen, this is FaSTLane 2030. Our direction is clear, and our journey has just started. Thank you very much.
Okay. We've now reached the Q&A portion of our agenda. So while they're setting up the chairs, I'll explain how it's going to work. similar to how we do on the earnings calls, this will be for the sell-side analysts. Please ask one question and one follow-up. You will see my Investor Relations colleagues, Valerie and Stephanie, with microphones in the aisle. If you have a question, please raise your hand and they will find you. So we'll just invite the management team up once they get the chairs set up, and we'll be taking your questions. Thank you. Okay. We can begin.
2. Question Answer
It's Philippe Houchois, Jefferies. I'm here, I could see you. First of all, no, thank you very much for all the work that has gone into this event. Much appreciate it.
My question of reaction, I guess, is understand what's happening in the U.S., and I think nobody has any issue with what you're doing in North America. It's more about Europe, [ over ] 3% to 5% margin is pretty low, even by the low standards of European history. And my impression is we have almost like a 2-tier business. North America remains more traditional carmaker, reasonably well integrated vertically. And then Europe is basically shedding assets. So trying to figure out is this low margin, is it -- I'm sure it includes the fact that you expect more competence from China, no doubt. EVs maybe, but also you disintegrate vertically quite a lot. So effectively, you may gain on capital intensity, but you will lose EBIT over time. And I'm just trying to understand in that context, what is the strength of Stellantis long term in Europe? Is it a distribution business? So what's your edge to be a long-term competitor in Europe?
And if I can squeeze the second one is we know, for example, that regulation on CO2 and LCVs are important for European earnings. We don't see Europe doing anything to try to help the industry or protect. And I'm just -- love to have your view and why is Europe not helping what's going on? Because we see the Chinese coming in, you're helping them to some extent. And there's a logic to it, but kind of help thinking that you're helping the ship in the -- or the [indiscernible]. And that's it for me.
Well, thank you 2 questions, right? One Europe, one regulation. Okay. I will start answering, then I will leave Emmanuel the rest of the answer. I will answer as the CEO of a global company that developed a business in multiple regions. And this is a strength that we have because once 1 region is in a certain direction, can compensate or offset eventually other regions that may -- that may be small problems, which is not the case of Europe. So let me talk about Europe.
We will leverage 40% of our investment, which is EUR 60 billion, to develop global assets for all the brands for all the regions. And then we will leverage rest into the brands in the way 4 global brands, 2 being in Europe, will roll out first those global assets, and then we'll have all the other brands following. And what the region will do, they will work intensely with our brand to strengthen complementarity, which is something that we have geographically and as brand portfolio and differentiation. So this is how we want to work margins in Europe better on the efficiency of our global scale and on the differentiation of which one of the brands.
Now we go into the regulation. And Emanuele is the best person to answer. But number one, we are having a very productive engagement with the commission and with the institution in Europe. We are learning a lot. You mentioned regulation about like commercial vehicle, I believe we are not far for having a clear alignment on what that needs to be, which in our case in detail is 5-year average on CO2 emission, that we understand might happen in 12 months from here. That will be very beneficial. The way we understand that the alignment is closed because both in [indiscernible] here from the multiple interactions that we have with the government and institution there, we understand that everybody is aligning with the fact that those light commercial vehicles [indiscernible] through standards and targets needs to change, right? And it is just because we look at the customer and we understand what is the pain that is fitting.
So imagine a small entrepreneur, a florist that owns a fleet of 5 vans and is very close to change those 5 vans into new ones because they are getting aged. Today, if it does arithmetics. It is that total cost of ownership still is favorable to the old ones instead of electric ones. So it's postponing that purchasing.
And this is when everybody lose because this florist will lose in maintenance cost. His fleet is getting aged so will pay more for maintenance. The industry will lose 5 new units that could be built and delivered. And the environment lose because those 5 old vans, they pollute more than any other combination of any powertrain or 5 new ones, right? So we understand that by a constructive and constant dialogue with everybody, this alignment is very close, and we expect happening in the next 12 months. Said that, our plan is resilient. So our plan will go in the direction that you saw with or without those that we expect as the final alignment of regulation. And Emanuele, if you want to add.
I just want to say we need also to look at what is the current situation of Stellantis and the market today. Stellantis is today, first quarter in a good part of recovery compared with the prior quarter, the fourth quarter last year. And this is also with a mix of BEV that is quite increasing compared with the past. So the momentum for electrification is a good momentum.
Now in our projection for the long term, we decide to be very conscious and to look at what is the average profitability of the competition in Europe. The level of competition is high. The number of vehicle by segment is very high. So we prefer to be very conscious on our forecast. And on LCV, Antonio, I think you really define what is the situation today. The demand is not in line with the current regulation on CO2 on -- so we expect some modification. I think that all the stakeholders are very conscious. But at the end of the day, we need to see some real moves in the legislation.
Henning from Barclays. Thanks very much for having us for really well-delivered event I thought. I'd like to challenge you on North America actually a little bit. So you talk about that 35% volume growth in a flat market. So obviously, all of it in terms of taking share from competitors. I appreciate you have a few white spaces that you want to grow in, although some of them would appear to be a bit dilutive, right? So you're bringing some sub-$30,000 Chrysler vehicles back, for example, on the Ram side, rather smaller trucks seems to be a bit dilutive.
So I just wanted to understand what you would expect a reaction on part of your North American competition to be because you have flat mix, positive pricing, yet really high growth in a flat market. So I just wanted to challenge you a little bit on that and see what you think the reaction part of the competitors would be? That's the first question.
And then the other dominant part, of course, in the AOI bridge is the cost savings. And I suppose, Joao, you said it's about 50-50 between Europe and North America, and that we must hold you accountable quarter-by-quarter now for the delivery. So can you share a little bit how much of that is really in line of sight already? How much of that you have identified obviously, everybody is trying to get more out of the supply chain and so on. So how tangible is this already? When does it start to come through?
Perfect. Thank you for your question. So North America, we will launch products into 5 new segments, as you saw. Let's start with Ram. So Ram is the fastest-growing brand in North America in quarter 1. So without new product launches, it is growing in market share and profitability as we know.
Now Ram a few years ago was much higher than segment share and market share. And one of the reason is because three years ago Ram lost in its lineup Ram DS that was the entry offer of pickup trucks budget Ram, $10,000 in average more competitive than the DT, the current Ram 1500. We are already working on that entry part of the segment with the new entry version such as the Black Express, but we understand that inflation and cost pressure might move demand of pickup buyers into the lower segment as we see already.
In the mid-size pickup track, we target the competitor which is now number one, which is as we know, Toyota Tacoma. We believe we have a great product to battle face-to-face with Toyota Tacoma. Then we have in the compact pickup truck, what has been proven already a very good product in South America and Central America, which is the Ram Rampage coming to be built in North America. That segment today is just one player that is built in Mexico is Ford Maverick. We want to get with Ram Rampage with a very good product that by the way, in South America is doing much better here in North America. We believe that Ram really has been proven to have the ability to grow a lot into the large pickup trucks as it's doing in the latest 3, 4 months, can have a big edge, a big advantage to play in midsize pickup truck and also in the compact pickup truck, as we see already happening, for instance, in South America.
Now Chrysler, as you mentioned. Chrysler as Tim Kuniskis has shared with you is practicality and functionality. We truly believe there is nothing more practical and functional that the 2 cars that you saw in the dome that might be priced at $25,000. We have a strong competitor in that range out of the one of the D3 that sell 1/4 million units per year, and we want to really be competitive and bothering this competitor in that segment.
And then the other part of your question is about VCP and how close we are to be tangible. So all the initiative that have been so far produced by almost 3,000 people that are working on VCP in the company, we understand that 40% of those will be implemented in the latest part of this year, thus will mature next year. So in our business plan, next year there is the impact of those 40% and then growing, and we can give you to increase this level of tangible some examples.
So for instance, quality to us is a cost. Total warranty spending, total warranty costs are costs for sure. Now we are developing through AI adoption in VCP a set of tools in quality that connect immediately one claim, one issue on the field to the plant to the workstation where this issue was generated. Then the same tool will open to us all the similar issue that had been root caused already and sold it. So now we have in seconds, in minutes, an encyclopedia of possible root causes, possible fixes that will fix that problem in the field, thus will stop the recurrency, thus will be beneficial to total warranty cost.
Now you go in the plant again, manufacturing and you see preventing maintenance. So preventive maintenance before was a very articulated discipline to understand on the cycles of use deterioration of components. Now AI, as we are applying, will provide to the maintenance team immediate signals of early deterioration that would imply to go preventive instead of be corrective. So those are breakdown that you avoided in the plans that we spend less money or none. Just the ones needed to give maintenance. Those are just two example, by Joao, if you want to. Okay. Unless you want more, but that's all. Thank you.
Itay Michaeli from TD Cowen. Actually, I have two questions on software and AI. The first is I'm curious if you can dimension the contribution that you expect through 2030 from incremental software services, both in the consumer side and maybe the Pro One side. Secondly, we heard a lot about level two, level two plus. I'm curious if you could update us on your plans through 2030 on level three and level four. Thank you.
Okay. I will take the first part of the answer, and then I will give to Pro One, so Emanuele and to Ned and Davide the rest of the answer. We are working now with the partners that you saw and many others to implement the enablers to our leapfrog in digital techs. So Stella Brain, our central computing architecture will be deployed to our fleet in 2027. Then smart cockpit in '27 and '28. Finally, auto drive in '27 and '28 and AI assistance in our car in the same timeframe. By 2035, we will have 70% of our fleet with all of that. That means revenue stream coming south of that. Then if you want to answer on Pro One.
So on Pro One, there has been a shift in what are the success key factor for being #1 in like commercial vehicle. Before, it was just a matter of serving the best possible product for our fleet customers. Today, the shift is not only having the best possible product, but offering a full ecosystem of services. This is exactly what we are looking for, and we are building actually. We already launched the program in some countries in Europe, so it's ongoing.
The target is easy. Reducing the total cost of ownership, guaranteed the full uptime of the vehicle of the fleet that are circulating. This is where we are working on. On this, the AI is a fundamental rule because it's an enabler of providing the best possible services within the TCO management and the fleet management.
So on the software side and ADAS services side, we are not breaking down software revenue as you know, but eventually down the road, we'll probably break down the software revenue. I can tell you that our service subscription revenue grew roughly 50, 60% this year. Significant growth in a service. We expect that service revenue going to continue to grow that scale. We cleaned up lots of service offerings standardized between Europe and United States, cleaned up experience.
We see usage growing, not only subscription revenue, but usage. A churn rate has dropped. We keep over 92%, 93% of the customers that subscribe. They stay with our service on the consumer side. Then on a Pro side, we lining up, we have this free to move fleet service offering that we now bringing to United States and creating with a manual set of services that we're going to turn into service offering for the Pro. And we expect that very similar take rate and a very similar churn rate based on our learnings from consumer side to stick. We have learned how to manage the services part of the business.
On the ADAS side of things, as you've seen what we share today, we took roughly 70% of cost out of existing system on L2+. What does that mean? It means we can put it in much more cars today. The typical offering on the L2+ on our premium trim vehicles is roughly 2,000, sometimes 2,500, depending on how these things get priced.
And so these -- the take rate is relatively stable equivalent to other automakers, but we believe by dropping the cost and dropping the price will have a significant more take rate on these services. And so I think the way we packaging experience together with the right service offering, we'll be able to grow this software service revenue significantly over next couple of years. And some point then Antonio and Joao will get to decide when to break that and show you guys how we're doing there.
Yes. Michael Foundoukidis, Oddo BHF. Two questions also on my side. Sorry to come back on this, but on VCP and pass through assumption, the 2028 margin bridge seem to imply a very high pass through of VCP to AOI despite the competitive environment that you presented.
Could you explain us how it works? Because I guess that most of the OEMs, if not all, are looking in the same direction as you are in terms of cost and in terms of competitiveness improvement in the coming years.
And maybe a second one, a quicker one on platforms. You presented STLA One this morning. Could you help us or me understand better what numbers of platforms do you have today on passenger cars and what would be that figure in 2030 from now in terms of simplification?
Okay. So I will start answering the first question on VCP. And then Joao will compliment and Davide will talk about STLA One.
So on VCP, what we said before, we have an objective of EUR 6 billion run rate. What will happen by the end of this year that among all the initiative that we started we already brought, hired, 40% of those will start making money for us. That mean that we have a pass through in 2027 already of 40% of that objective, which is over two billion. It's 2.4 billion. And this is the first part of your answer then if you want to go.
Yes, just so a few things. You're right. It's EUR 6 billion of full impact on AOI and cash. And to put that in perspective, our total cost of sales, it's more than EUR 100 billion. So if you put that as in perspective, in percentage is not something unusual or something that other OEMs are not able to achieve, that does not include headwind because especially raw materials, we put that separate. So we are confident based on the benchmark that we have done so far and the initiatives that we already see that we can accomplish that number, which is a net number that would flow through the P&L and we also see the cash benefit on that.
STLA One.
On STLA One, as you have seen, STLA One is the first very modular platform by design that we are putting on the market starting from next year.
We are getting rid of our own boundaries that we were constraining ourself in terms of segmentation, in terms of dimension. And we are really addressing the modular concept as the base concept of the platform where, as you have seen with the software that started with the central compute that is as powerful to integrate various module. Then we're able to expand the coverage of this platform from the B to the D segment and from the ICE and the heavy electrification up to the BEV.
So that would cover from B to D. That would realize over time, basically 5 platforms that we have today to become one. So all these segments will converge over time to that.
When we think about that by 2030, three platform are going to be global platform with 50% of the volumes. When I count for the more regional platform, I add up other 2 platform and we're making basically up to 75 to 80% of the volumes. Then there will remain over time on regional platform like Middle East and Africa, South America, and in certain segment, of course, North America, some regional platform.
And by the end of the next plan, so we're thinking about 2035, then that's where we are halving basically the number of platform as STLA One as mature and has consolidated the 5. And the electrification roadmap in Europe has basically mature so to convert to unique powertrain lineup.
Christian Frenes, Goldman Sachs. First of all, thank you for setting up this event. Really interesting day and we appreciate it very much.
I wanted to come back to North America in terms of the price/mix volume contribution. I think for the group, you talked about 2.1% through 2028. And I'm wondering for North America only what your assumption for price/mix volume is and specifically when we think about the RAM contribution, there's a lot of new product being launched there. How significant is the RAM contribution and what's the cadence of it? When should we expect the most significant impact? That's my first question.
And I have one quick follow up as well, which is just on the raw material side. You talked about 140 basis points, I think, of headwind. And I think it was mentioned at 100 bps of headwind already in the second half of this year, if I heard it correctly. Could you elaborate on what your expectation is for 2027?
Perfect. I will start the answer. So how relevant is RAM today and the future? Very relevant. Very relevant. It is relevant already today with the pickup offer at the band offer that he has in the market. Will grow in relevance starting from '28, actually end of '27 and '28, '29, with the launch in North America of the midsize pickup truck and of the compact pickup truck. So the relevance is already very high in volumes, 0.5 million units sold last year in profitability overall and per unit. And our plan is to keep pushing on such a beautiful brand with a very strong lineup for the future to make sure that we accelerate on that. And crucial year is '28 because it's when all the volumes all launch will be materialized on the market, on inflation.
Yes. So just to answer, just to compliment on the volume mix price for North America, of the 2% that I showed on the group, half its price and that price is from North American price that we have already taken. So that's a carryover that we are assuming that is going to continue given the inflation that we see on the market. During the plan period, '28, '29, 2030, the mix verse '25 in North America will be basically neutral because we have benefits of regulation easing, but we are introducing vehicles in lower segments that has lower margins than we have. So mix of North America is flat and for the group as well because for the group, North America is the one that is growing the most. So has that positive market mix, but it's offset by the increase on LEV in Europe. So mix is both neutral in North America and for the group.
On the raw material, what we are seeing, and we're going to start seeing already in Q2, it's about 1% of raw material increases over a year, not exactly 1% in Q2, but we'll grow to up to 1%. And then in 2027, we expect that right now if price continues as it is today, we're going to continue to see a headwind because first hedges we're going to roll off. And also, right now we have still contracts that are usually one year and then we would renegotiate the contract.
So raw material we are forecasting as you saw in the walk by 2028, 1.4 points of increase. Basically, we are assuming the current price that we have right now, including the negotiations that we would have next year.
I tried to constrain myself the two questions because I probably have 10. I'm Horst Schneider from Bank of America. I've got the first question please is on, I'm not sure if I missed that, but when you say that you plan for positive pricing in your bridge, can you maybe outline what you assume for which regions and where maybe the pricing is negative, where it's positive? Because for car makers, it's unusual the assumption of positive pricing because usually in cars we have got negative pricing. So maybe you can explain that a little bit better why.
The second one is I do not fully understand the gross targets for Europe and for MEA. That looks very high. So in here you have got the partnerships with Leapmotor. So maybe you can break that up what comes from Stellantis itself and what comes in from Leapmotor and the JV. So the background of that question is also I want to understand what I need to strip out then at the end of the P&L from the minorities.
Okay. I will take the second question and then I will give Joao the answer for the first question. So let's go MEA first. MEA will grow 40% in revenue in the plan. Today, MEA is already the second -- Stellantis the second automaker in the region, is very profitable already with 30% of the overall volume that we sell in the region built in the region and region is very competitive.
So the major force of acceleration is to go from 30% of what we sell in the region built in the region to 90% as a combination of a very high product localization and the very competitive vehicles that will come from Tata, Jeep branded, from Dongfeng, Jeep, and Peugeot branding in some market and from Leapmotor. But the highest concentration of growth will happen because we will build more in the region.
Turkey is going to ramp up a lot by using the very strong industrial footprint in Tofas. Algeria, we are going to invest in additional manufacturing and other partnership that we have in the region itself.
In Europe, what we see is that already Leapmotor is a strong example of growth from 0 to 34,000 units sold last year, this year more than double. Then we are industrializing with this partner Madrid. And we will put in Madrid 2 the SUV segment. Then we are already now prototyping the first vehicle built one of our 2 lines in Zaragoza and leveraging this partnership we are putting an Opel on top of that as well. So a big step forward because of Zaragoza and Madrid.
Then Dongfeng. So with Dongfeng, we intend, we plan to materialize an agreement to share capacity of Ram and to put in Ram their top tier brand, which is Voyah. So yes, the contribution of the partnership is growing in Europe as is growing each one of the brand, the 5 regional brands that Emanuele has shown in the plan as well through high differentiation. You want to take the other?
Yes, sure. So a few things on the price, just to make sure that it's clear. We are not in the plan forecasting additional price increase for now. What we have and what we showed in the walk, we are walking this 2025. And what we have there is the impact of price that we have already taken, the carryover price, which is positive in North America. It's positive in Middle East and Africa. It's positive in South America and it's negative in Europe. Going forward, we are not planning for any price increase despite all the inflationary pressures that everybody's seeing.
And if we look back 5, 10 years, we have seen over time car prices increase but we are not taking that in consideration and will depend on the pressure that everybody's going to face on inflation, not only from raw material, tariffs, and other headwinds.
This is Federico Merendi from Wolfe Research. So my first question is you have a lot of stuff on the table right now. You have 60 models. I guess that you're planning also to redesign parts, a lot of things, right? And typically, when this happens in this industry, companies are more prone to have quality issues or things going wrong. So how are you planning to manage this level of complexity over your period plan?
And my second question would be if you could talk a little bit more about the commercial vehicle initiatives in the US and how much are you embedding of basically improvement in the region versus your competitors?
That's great. Thank you, because you touched on element that I really like to work around, which is product quality. So let me give you a little bit of numbers on product quality. So we measure product quality with a lot of indicators. The one that has the highest correlation to what happened in the field is what we call 3MIS kppm. So 3MIS kppm has been improved at the globally 31% so far being the highest improvement coming from North America.
Despite the launches that we had, usually a new product launch is the introduction on new supplier parts, or new technology, on recently trained manpower in our plants. So usually, you see some peak, but we have been able with our quality team to mitigate all peaks.
How we are doing that? Number one, we are really entertaining a very strong double-way conversation with all our dealers. Those are the ones that first receive claims, the ones that first they advise now in this moment.
Second, we applied overall AI to understand quickly how to correlate whatever we see as a signal to a potential root cause that we have seen already in the past to all the possible fixes that we did.
So we are really working hard on product quality, nameplate by nameplate, by intensifying field dialogue with dealers by applying last generation tools to be faster in root causing and to find possible actions for solve those issues. This is the first answer to your question.
The second is Pro One and commercial vehicle in North America. Well, this is already in good shape, but will be in a better shape. Why? On the pickups, we are launching a lot of pickups as you saw. So the mid size pickup truck is coming very soon. This is a white space for us. We believe that we have a very strong offer in the product that you saw in the Dome and with a brand which is already the fastest growing brand in North America overall.
Then we have the compact pickup. This is very interesting as well. It is a proven product. So your first question about future product quality, well, it is already very mature. So we've been working a lot technically on that product. It is doing very well on a similar consumer to the North America, which is the ones that are our consumer in Brazil and not only in Brazil. And then it is a segment where basically today there is just one competitor that is built in Mexico currently.
So we believe that on pickup truck, our plan and our brand are very strong to be successful. And once at the beginning of this year, we will relaunch in North America, in U.S. as well the City, so the small one, this is a white space for the industry, not only for us because today no one is there. And as much as we understand, our competitors will have something in 24 months from now. So we will have 2 year of anticipation of what we believe for the logistic last mile deliveries is getting a very hot market in many urban areas in United States. Thank you.
Martino De Ambroggi, Equita. The first question is on the recently announced partnerships. Just to understand if you could quantify what is the impact on the EUR 6 billion cost savings coming from these partnerships or other impacts. And I suppose you will continue to look for additional agreements which are not factored in the business plan, so will be eventually an add on, I don't know, Maserati, if it's something conceivable or not.
So the second is on the -- trying to summarize the light commercial vehicles and the Pro One and so on. I remember a few years ago you made an event in Balocco, telling that this business at truck and LCV were 1/3 of sales. You never disclosed the profitability, but probably was much more than 1/2 of the profitability of the group a few years ago. Could you share with us what is the current starting point and what is the arrival point that you have in your 2030 targets?
Okay. VCP and the EUR 6 billions, those are what we project as saving of the current cost structure. Obviously, we will learn a lot from the partners. We will learn how to develop faster, how to introduce faster additional cost saving ideas, but those are the saving on product costs mainly, but also manufacturing cost on quality cost that we see on the current cost structure. It will be accelerated by the additional learning, but today's fueled but what we see today by benchmark our products to our competitor's product.
That is the answer on the EUR 6 billion and how still marginally, but I'm sure they will improve the partnership will jump in to give us even more idea to improve the current cost structure of the products of Stellantis. You want to take the...
Yes, we don't disclose the figures for the Pro One, but obviously, it's a very important part of our business everywhere and especially in Europe and North America.
It's like 3 years ago.
Tom Narayan, RBC. There was a slide in the European subsegment we had with different types of bread. There was a croissant and there was a pretzel for Germany and it was great. I liked it. I know some people didn't. But basically, the idea there is that you have these national champions and that's what keeps the DNA away from, let's say the Chinese coming in. But then you also have the Chinese partners coming in. I guess the question is, what is to prevent those partners that you have from taking a chomp at the pretzel, the baguette, et cetera? Who are they taking share away from exactly?
And then a follow-up, just a quick clarification. Did you say that mix in Europe would be positive? I'm just thinking you have the EVs, you have the profit sharing with the Chinese JVs and these lower priced cars coming in.
Okay. So I will take the pretzel and focaccia in my case. In my case, part of the answer and then on the pricing in Europe, which will not be positive. Joao will explain.
The most important element of that beautiful and artistic representation of what we want to do with our European brands actually is what is nominal. The eggs, the flour, those are the same. This is the famous 47% of investment in the global asset. So we take the eggs and then by the magic of our designers, our brand management, we are able to differentiate and be distinctive in each geography for the customer that we have the privilege to serve by doing focaccia, by doing pretzel, by doing baguette, et cetera. So this is the recipe, partnership as you said.
There are two very important element of each one of the partnership that either we already have, Leapmotor, or we are building, Dongfeng in Europe. Those joint venture are meant to be distribution joint venture, so sourcing joint venture and capacity sharing joint venture. And in case of Dongfeng, also engineering joint venture, 51% owned by Stellantis. So we control distribution, if you wish.
In the agreement that we have both with Leapmotor and Dongfeng, we together select the products or the brands that our partner would like to produce and distribute through us because basically, it's mutual interest to sell both more and not to compete for the same customer in the same showroom.
So for instance, in Ram, once we will materialize the partnership with Dongfeng, Dongfeng will launch through the joint venture there, Voyah brand, which is a top tier brand, big cars. And Leapmotor in Madrid, one, we will finalize that venture as well, Leapmotor will launch there probably 2 D segment cars, which is not in our core strategy since our core strategy, as Emanuele explained, is A, B and C expansion in Europe. So this is the way we want to work together to win both.
So we win for some reason that I explained. And then the partners win because they will have access to our manufacturing knowledge and distribution very, very quick and scale or both will contribute to be even more effective in sourcing. And you want to take the prices?
Yes. Sure. The question was on mix, right? So the net mix impact in Europe was 2025 during the planned period, it's negative because of the increase of the LEV. For the group, it's neutral because the negative mix in Europe, it's offset by the higher growth of the North America, which has higher margins than the other regions through the plan period. So since North America is growing more than other regions, that has a positive mix effect that offsets the negative mix effects that we're going to see in Europe because of the LEV penetration.
Monica Bosio from Intesa Sanpaolo. The first question is on North America. Antonio, you said that 2028 will be crucial for North America because of Ram. So should we expect a more back-end loaded growth or a balanced growth in any case? How do you see 2027 in North America? That's my first question.
And the second one is on your partnership with Jaguar and Land Rover. I was expecting partnerships in Europe, but not in USA. So if you can explain me the reason behind.
No, thank you for your question. Actually, to us, to this leadership team, to the overall Stellantis team that we are grateful to lead every day, every day is crucial. So we start seeing as crucial today, this week, this month, second quarter, the year, and up to 2030.
When I said that '28 is very important is because number one, in '27, we go positive in free cash flow generation and we have a plan for that. In '28, we get to EUR 3 billion of positive free cash flow generation and we do that because we gradually and progressively improve our business KPI quarter by quarter, starting from quarter one versus the same period of prior year to execution through new product launches. And then we have a very high density of product launches in North America in '28.
So in '28 is when we mature the launches and the sales of the Chrysler that you saw the very competitive ones, when we have the 2 pickups already in the market. So accelerating ramp up of production sales, the mid-size pickup truck and the compact pickup truck. And we will already have accumulated more than one year of sales of the beautiful white spaces of Ram that you saw by Tim Kuniskis. So the sport truck, for instance, and the TRX.
So it is a year where we will accelerate because of accelerated product launches cadence. But when you talk on what is crucial to us is every day is this year is to be positive industrial free cash flow in '27, is to reach EUR 3 billion of industrial free cash flow in '28.
Partnerships. Partnerships are meant to be a multiplier of forces for us in many fields. And in Europe, it's very clear that when you talk capacity sharing, a capacity with region sharing, but not only, what happens in North America? Well, in North America, we can develop together products, we can develop together technologies and we can have opportunity or capacity sharing since the new trade condition makes our installed capacity very attractive to many other competitors or potential partners. And we have very a knowledge, manpower and industrial teams that run every day a lot of assembly plants in this region and in this country. Thank you. Thank you for your question.
That was the last question. Antonio, last word to you.
Well, I just want to thank John first. John, thank you very much for being with us. This is really a lot as a message to this team. We really appreciate your time. I know how busy you are every day, and we are very happy to share fast line 2030 with you in person. And I will obviously want to thank all of you for these important questions as you did.
As we close this important day for Stellantis, I want to thank you once again for being us today. Safe travels to all and see you next year probably. Thank you very much.
So this concludes our Investor Day. What follow next is this room is a press conference for the media only. So ask for the non-media to please gather up your things and depart. Buses are waiting outside to transport you to the hotel or to the airport. Thank you again. All right, turn it over now to my colleague for now.
Stellantis — Analyst/Investor Day - Stellantis N.V.
Investor Day rolled out "FaSTLane 2030": a regional-first strategy, three global platforms, €60bn investment and targets to restore margins and cash by 2030.
📣 Key Message
- Core: Stellantis shifts to a multiregional model: four global brands plus five regional brands, three global platforms and modular technologies to drive profitable growth, targeting improved quality, faster development and stronger local product-market fit while preserving scale.
🎯 Strategic Highlights
- Branding: Simplify portfolio to 4 global brands (Jeep, Ram, Peugeot, Fiat) for major global launches; 5 regional brands to adapt offerings locally.
- Platforms & Tech: Launch "Stella One" platform in 2027 and Stella Brain/Smart Cockpit/Autodrive software stack; targets: 50% volumes on 3 global platforms by 2030 and 35% of volumes with new tech by 2030.
- Capital: >€60bn investment to 2030 (≈40% global platforms/tech, 60% brands/products), with 60% of product spend focused on North America.
🔍 New Information
- Targets: Group revenue to ~€190bn by 2030 (from €154bn in 2025), AOI (adjusted operating income) margin to 7% by 2030, and industrial free cash flow €6bn by 2030; interim goals: positive industrial FCF in 2027 and 5% AOI by 2028.
- Cost & EV: €6bn value-creation program (run-rate savings by 2028); Stella One aims ~20% product cost reduction, LFP (lithium iron phosphate) battery scale and body-integrated battery design to cut cost/weight.
- Partnerships: Expanded partnerships (Leapmotor, Dongfeng, Tata, Qualcomm/Wave) including a hands-free Autodrive service planned in North America from 2028.
❓ Analyst Q&A
- Europe Concerns: Analysts pressed on low Europe margins (3–5% target). Management stressed resilience: platform scale, brand differentiation, and expectation of regulatory adjustments (LCV CO2 rules) to aid competitiveness.
- North America Growth: Questions on achieving ~25% revenue growth there focused on many new nameplates (mid/compact pickups, lower-priced Chrysler entries); management pointed to product white spaces, Ram momentum and back‑loaded impact with major cadence in 2028.
- Execution & Costs: Scrutiny of the €6bn program and timing — management says ~40% of initiatives will begin delivering by year‑end with material benefit in 2027; software/ADAS monetization and partnerships were highlighted as upside.
⚡ Bottom Line
- Takeaway: FaSTLane 2030 is a concrete, numbers‑driven plan: heavy capex on fewer global platforms, major regional product offensives (especially North America), €6bn cost savings and software/partnership levers to restore margins and cash. Execution, supplier/raw‑material pressure and EU regulation remain key risks; if delivered, the plan materially de‑risks the turnaround.
Stellantis — Q1 2026 Earnings Call
1. Management Discussion
Hello, and welcome to the Stellantis Q1 2026 Financial Results Call. [Operator Instructions]
I now give the floor to Mr. Charlie Christman, Head of Investor Relations, to begin today's conference. Sir, the floor is yours.
Thank you. Hello, everyone, and thank you for joining us today as we review Stellantis Q1 2026 results. Earlier today, the presentation material for this call, along with the related press release were posted under the Investors section of the Stellantis Group website. Today, our call is hosted by Antonio Filosa, Chief Executive Officer; and Joao Laranjo, Chief Financial Officer. After their prepared remarks, Antonio and Joao will be available to answer questions from the analysts.
Before we begin, I want to point out that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement included on Page 2 of today's presentation. As customary, the call will be governed by that language. I'd also like to point out that with our switch to quarterly reporting, we have made some changes to streamline our earnings presentation.
Now I will hand the call over to Antonio Filosa, Chief Executive Officer of Stellantis.
Thank you. Thank you, Charlie. And thank you all very much for joining us today as we discuss our first quarter results for the year. First, let me say, following the decisive reset action taken in '25, our focus is now on disciplined execution, and we are seeing early signs of progress, consistent with our expectations.
With that, I'm happy to share that quarter 1, '26, we are now seeing the results of that successful execution as we delivered a return to profitability. We are now back on a path to sustainable growth with key priorities being growing our business, improving our industrial execution and enhancing our profitability. This is evident by the market share gains in several regions and the 12% year-over-year growth in shipments. We are starting to -- we are very excited about our 10 all new products and 6 refreshed products in '26.
We remain realistic about the path ahead. The environment remains challenging and across all regions, but our strategy is unchanged, put the customer at the center of everything we do, empower regions to execute faster and apply rigorous capital and cost discipline. Now let me touch on some first quarter highlights from a regional perspective.
In North America, despite a challenging U.S. market where the industry was down 6%, our sales increased 4%, driven by Ram and by Jeep. We gained approximately 80 basis points of market share. Ram specifically had a very strong quarter 1, posting a 20% U.S. sales increase year-over-year, its best quarter 1 since '23. This success is what has made Ram the fastest-growing brand in the North American industry.
We also gained market share in Canada and in Mexico, reflecting consistent progress across all countries. As a result, Stellantis is the fastest-growing automaker in North America. Overall, we remain encouraged by our North America order book that remains strong, growing more than 20% year-over-year.
On the product side, we continue to benefit from the late '25 launches ramping up for the new Jeep Cherokee and the new Dodge Charger SIXPACK. And looking ahead for 2026, I'm very excited about the upcoming launches of the new Ram SRT TRX, the new Jeep Recon BEV and our first range extended, the Jeep Grand Wagoneer REEV coming this year.
Turning to Enlarged Europe. Sales were up 5% or 8% up, including Leapmotor as compared to quarter 1 '25 to over 730,000 vehicles. Our EU30 market share reached 17.5%. This is the highest share in a quarter since quarter 1 '24. Adding the sales from Leapmotor, our combined market share in Europe increased to 18.1%. We continued our leadership position in hybrids and in key markets such as France and Italy, with strong performance also in Germany and in Spain. Stellantis Pro One closed quarter 1 as the European leader in light commercial vehicle with a 28.7% market share.
On the European product wave, I would like to add that we continue to benefit from the recent C-SUV launches as they further ramp up this year, contributing to EU30 sales positively with 12,000 units year-over-year. The smart car lineup has been -- has seen quarter 1 sales up almost 60,000 units year-over-year. And overall, the European order book is up 9%.
Turning to South America. We maintained our dominant leadership position with highlights including the strong results in the region's two major markets, 29% market share in both Brazil and in Argentina. And also, we are #2 in Chile, another critical market for the region.
Let me touch on the important Ram Dakota launch. Ram Dakota launched in late '25 in Argentina and has been ramping up production. And we also launched Ram Dakota in Brazil during this quarter. Ram Dakota addresses the midsized truck segment, home of the region's largest profit pool.
Moving to Middle East and Africa. Market share for the region increased to 11.5%, up 50 basis points year-over-year, driven by 18% year-over-year sales growth in Algeria and #1 positions in both Turkey and Algeria. Geopolitical tensions remain. However, in quarter 1, we improved commercial performance, normalized our inventory levels and remain focused on localization, increasing our production levels, both in Algeria and in Turkey.
Lastly, in APAC, shipments saw growth of 15% year-over-year despite a weaker industry environment.
All in all, momentum is there, momentum has started and momentum is strong. And I could not be more proud of our Stellantis teams as they remain focused on improving product and commercial execution and stabilizing volume and mix while reinforcing cost management and operational discipline. Execution will define 2026. Our priorities are clear, and we are confident that the actions we are taking are exactly the right ones.
Before I hand you to Joao to walk you through the numbers, just a quick reminder of our upcoming Investor Day event on May 21, where we will outline the next phase of our strategy with clear priorities, clear targets and a focused road map for execution. Joao?
Thank you, Antonio. Good afternoon, and good morning, everyone. Q1 was a quarter of execution and a return to profitability. Let me start with the key financial figures.
Consolidated shipments were 1.4 million units, up 12% year-over-year, with all regions contributing to the growth. Net revenues were EUR 38.1 billion, up EUR 2.3 billion or 6% compared to Q1 of last year. This improvement was driven by two main factors. Volume mix contributed approximately EUR 4.2 billion, supported by volume growth across all regions with North America, the primary contributor. Foreign exchange translation had a negative impact of approximately EUR 2.4 billion, mainly driven by North America and Middle East and Africa.
Adjusted operating income returned to positive at EUR 1 billion for the quarter, improving by EUR 633 million compared to Q1 of last year. AOI margin was 2.5%, representing a 160 basis point improvement year-over-year.
The key drivers of the AOI improvement were volume mix had a positive impact of EUR 739 million, reflecting higher shipments across all regions and favorable mix with the largest contribution coming from North America. Net pricing contributed EUR 99 million, supported by favorable net pricing in North America and Middle East and Africa, partially offset by negative net pricing in Enlarged Europe. Industrial costs improved by EUR 412 million, driven by better product, manufacturing and logistic cost performance, supported by a more stable production schedule. The impact of tariffs was broadly neutral year-over-year as the recognition of approximately EUR 400 million of IEEPA tariff adjustment offset Q1 2026 tariff costs. SG&A costs increased by EUR 153 million, largely reflecting higher marketing expenses to support volume growth. Lastly, foreign exchange and other had a negative impact of EUR 383 million, mainly driven by the Turkish lira devaluation.
Moving to industrial free cash flow and balance sheet. Industrial free cash flow was negative EUR 1.9 billion in Q1, representing a EUR 1.1 billion improvement year-over-year. This improvement reflects stronger operating performance, disciplined capital allocation and normal seasonal working capital dynamics. Importantly, it was achieved despite approximately EUR 700 million of cash outflows related to H2 2025 charges.
I also would like to highlight that in March 2026, we issued 3 tranches of hybrid perpetual notes for a total of EUR 5 billion. This further is strengthening our capital structure and supported industrial available liquidity of EUR 44 billion at quarter end, representing 28% of net revenues and within our target liquidity range of 25% to 30%.
Now looking at inventory. Total inventory increased 11% year-over-year to 1.3 million units. Our inventory levels remain aligned with commercial momentum, support the launch pipeline while maintaining discipline.
Turning to our regional performance. Please note that following the change in our reporting segments, comparatives have been restated accordingly. Maserati is no longer reported as a separate segment and is now managed consistently with the other brands within the regions.
North America delivered a positive AOI of EUR 263 million with an AOI margin of 1.6%. This represents a year-over-year improvement of EUR 805 million, primarily driven by higher Ram shipments, combined with positive net price and improvements in industrial execution.
In Enlarged Europe, AOI was effectively breakeven. While the operating environment remains challenging with continued margin pressure, we're encouraged by the region's market share improvement and return to breakeven performance.
In South America and Middle East and Africa, both regions continue to provide strong earnings contributions to the group. South America delivered AOI of EUR 393 million, while Middle East and Africa delivered AOI of EUR 282 million.
Looking ahead to the remainder of the year, we are confirming our 2026 financial guidance as outlined on February 6. We expect an improvement in net revenues, margins and industrial free cash flow supported by strong liquidity and a more resilient operating model. We also expect to continue managing volatility related to geopolitical, trading and inflationary pressures.
Thank you. We'll now ask the operator to open the line for questions.
[Operator Instructions] Now the first question comes from the line of Jose Asumendi from JPMorgan.
2. Question Answer
Two questions, please. The first one, can you talk about the margin momentum in North America? Do you think Q2 earnings will be up in the U.S. versus Q1? And which vehicles and cost pressures do you think will drive into Q2 and second half of the year?
And then second question, please, when it comes to free cash flow expectations, can you elaborate a bit more on the movements we're seeing on working capital? Do you expect that working capital to unwind towards the second half of the year? And how should we think about restructuring cash outflow? Ultimately, I'm trying to understand if you're already seeing free cash flow towards breakeven or cash generation towards the second half of the year.
Okay. I'll address first the free cash flow question. So as you can see on the results, free cash flow has improved versus last year across all items, excluding provisions where we have the EUR 700 million of supplier claims. Working capital, it's seasonal, as you mentioned, both in Q1 and Q3. The improvements that we saw in Q1 is consistent to the guidance that we have.
And then looking forward, Jose, if you look at 2025, we had a negative industrial free cash flow of minus EUR 4.5 billion for the full year, of which minus EUR 3 billion in Q1. We did better in Q1 despite the EUR 700 million of supplier claims, and we expect to continue to do better than 2025 in the next 9 months with some difference potentially in seasonality where 2025 Q2 was relatively strong and Q3 very weak. We believe we'll have a more balanced free cash flow generation in 2026, still with seasonality, but we -- based on the improvements that we are doing and we already see in Q1, including the free cash flow, we believe that we will be -- we'll continue to see performance improvement versus what we have done in 2025. And again, consistent to the guidance. On -- go ahead, Antonio, the first question.
So thank you, Jose, for your two questions. I will take the first one. So generally speaking, on profitability and margins globally and in North America, I'm very encouraged by the strong momentum that we started, as you can check by the walks provided. North America improved in volumes, improved in mix, improved in price discipline. And out of the plus EUR 99 million of price positioning year-over-year, actually, North America is responsible for EUR 200 million.
So what we started, as we said since the beginning, is a trajectory of sequential improvement quarter-over-quarter versus prior year. What we strongly expect for quarter 2 is to keep on that trajectory and deliver a quarter 2, which is better than quarter 2 prior year for sure, working on pricing again, working on volumes, working on mix. And as we did, we started working massively on cost. So we recently launched a global program of cost management that is called VCP, value creation program. This is strong in North America, strong in Europe, strong globally, and we expect to see very encouraging results on costs as well during the year. Thank you very much for your questions.
Can you hear me?
Yes, perfectly.
Thomas Besson, Kepler Cheuvreux. I'd like to dig further on the two similar topics, please. On the cash flow side, the improvement you've reported in Q1 has partly been supported by another decline in CapEx and by the seasonality in working capital. I mean I'd like to try to understand what level of CapEx we should expect for the year in 2026, whether it will flatten versus '25, or whether you think it can further?
And on the NAFTA margin, I understand there is some momentum, but looking at the sequential development versus the second half of 2025, you had much higher volumes, a better retail share, much higher V8 revenues, but still we don't see a substantial traction on margins. What do you think is needed for margins to recover to mid-single-digit level, excluding the reimbursement of tariffs that helped a bit in Q1, please?
Okay. I'll take the CapEx question. So CapEx for this year, we expect to be slightly below 7% of net revenues. And the figures that we have incurred in Q1, it's consistent to that trajectory, and it's also consistent to the product plan that we will present at Investor Day.
And I will take the other question, which is about margin. So margins are improving already as they are improving along volume mix and price discipline. And what we expect to do for the rest of the year is keep improving. As we said, this is a trajectory. Momentum started. The trajectory will be a trajectory of progressive sequential improvement quarter-by-quarter versus prior year. And we will keep further improving those using price discipline, using mix and working a lot on cost as we started recently our value creation program across all regions, North America and Europe being the two most interested region on that. We expect this program delivering results along the next quarters of the year. Thank you very much.
The next question comes from the line of Stuart Pearson from Oxcap Analytics.
So I mean, just to be absolutely clear, and sorry if I'm not really understanding what you're trying to say on the improvement because I get there's an improvement year-on-year, whether that's free cash flow or North America. But of course, the base gets dramatically weaker as the year goes on given the profile last year. So I mean can you just -- kind of do you expect to sequentially improve quarter-by-quarter this year in North America profitability and on free cash flow?
And I guess then the sort of bigger question is the driver of that. I guess we sort of understand or think we do on the product side. But I just wonder if you can talk a bit about industrial costs and execution there, where there's an opportunity. I guess the IEEPA gain went into North America's industrial cost bucket. So that was still negative in Q1, if that's the case. But how do you expect those industrial costs in North America to develop through the year? And what's driving that?
Yes. Thank you for your question. I will take the first part of your question. I will be -- I will try to be as clear as you demanded. So yes, we expect to improve margins quarter-by-quarter sequentially this year in North America. We exclude in that the IEEPA refund. But yes, margins will improve quarter 2 against quarter 1. And then for the rest of the year, every quarter, we will see an improvement there. And on industrial cost, Joao?
Yes. So we expect for the full year, as we mentioned at the beginning of the year, industrial cost to be a tailwind for Stellantis despite the raw material headwinds that continues to increase. And the primary drivers of this improvement, it's improvements in manufacturing due to higher volumes, the cost opportunities that we see on product cost. And as we go throughout the year, we're also going to see -- start seeing some improvements in warranty as well given the adjustments that we have taken last year.
The next question comes from the line of Patrick Hummel from UBS.
It's Patrick from UBS, and thanks Antonio, for clarifying the sequential improvement in North America. I think that's what every -- focused on today. Can I just ask a bit broader? You also say H2 is going to be better than H1. You haven't touched the full year guide. You have those EUR 400 million IEEPA tailwinds that you probably haven't factored in. Is it fair to say that in the second half, we'll see more commodity headwinds than what you initially baked into the guide, that's more or less a wash with IEEPA? Or are the commodity headwinds potentially even larger? Some of your peers have quantified those. It would be helpful if you could help us framing the commodity impact in the course of the year in light of the elevated levels that we're currently seeing.
Yes. Right now, the headwind that we see on commodities versus what we had when we put the guidance together, it's slightly above the IEEPA credits that we have recognized in Q1.
Slightly above, you said, because it wasn't really audible, sorry.
Yes. Yes, it's slightly above the EUR 400 million IEEPA credits that we recognized in Q1. So it's not entirely a wash. It still has a minor headwind on top of that.
Understood. And if I can follow up, we got the color on North America sequentially. How should we think about Europe and the moving parts here? You've recovered some market share with the STLA smart platform. What about cost initiatives? What about the LCV segment that in good years is a significant contributor, but I guess still well below where you want it to be. Is that going to be a driver in the course of the year, supporting a better AOI? Or should we think about Europe staying close to breakeven levels in the coming quarters?
So maybe I'll take this question, and thank you for that one. So first of all, I want to celebrate what Europe did in quarter 1 because it's important to recognize the team that improved so much sales in a challenging environment, market share that topped to 18.1% if we include Leapmotor. And also versus quarter 4 last year was able to go back to breakeven, which was not the case of quarter 4 last year. So overall, a sequential improvement in Europe that we celebrate.
And what we see for the rest of the year in Europe is a strong focus on cost. As I mentioned before, the VCP, the value creation program that we just launched, we will have a lot to share in the Investor Day of May 21 about that. But I can anticipate that will be strong in North America and strong in Europe. That will be a massive focus. Also, profit per unit will be a focus and improving the mix in light commercial vehicle will be a focus.
Those focus will be able to manage and to offset the headwinds that we see, right? So the headwinds that we see are basically related to regulation, CO2 emission that specifically on light commercial vehicle, as you mentioned, it is proven that they are not attainable, right? So while we keep engaging together with our association, ACEA, with a common shared agenda on changing regulation on light commercial vehicles, the focus of Europe will be to deliver sequential improvement as well keeping as North Star breakeven plus for the rest of the year.
The next question comes from the line of Michael Foundoukidis from ODDO BHF.
Two questions on my side remaining. So first one, which launches do you consider as the most critical to delivering the expected H2 2026 margin uplift? And where do you see the highest execution or supply chain risk, if any?
And maybe a question for Joao then as a follow-up. Others' AOI swung to plus EUR 44 million in Q1. Usually, it's negative that line. We had also revenues up significantly. So what drove this? And is this contribution sustainable into the rest of 2026?
Okay. I'll take the second question. So the other -- holdings and others was a slight positive, and there are a few factors contributing to that. The first one is financial services, profitability increased. The second one is that with the regionalization, there was a reallocation of SG&A costs from the group to the regions to reflect the new organizations. And last year, we also had some losses on investments that didn't occur this year. If you are thinking about projecting these results for the coming quarters, holding and others probably will be between breakeven and it's slightly negative going forward. That is a good run rate for your assumptions.
And can you please read the first part of your question because I cannot hear you very well.
Yes. Sorry, I was asking which launches are the most critical to delivering the H2 margin uplift that you mentioned? And where do you see, if any, execution risk or supply chain risk for these launches?
Perfect. That's very clear. So what we are seeing already in quarter 1 and now talking of North America is a very strong profit contribution by our recent launch of the Hemi V8 engine into the pickup trucks. So we were anticipating a strong acceleration with that powertrain. And we know that, that is associated with higher margin than the rest of the lineup. And actually, we are positively surprised by seeing that 40%, more or less, of the deliveries of the pickup trucks with an Hemi V8 engine.
So obviously, for the rest of the year in North America, to push on Ram that has been the fastest-growing brand in the region and to have the V8 Hemi engine keep accelerating will be very good for volume, will be very good for mix and most of all, will be very good for profit per unit and overall profitability. This is one.
When we go to Europe, the ramp-up of the smart car launches out of the Trnava plant in Slovakia and the Serbian plant is going very well, is accelerating. And that is a good one for us for volume, for sure. But also those units are profitable, very profitable because those cars are very competitive. Smart car is our highest competitive platform and the products that we build in those two plants are among the most competitive for us and overall, in Europe.
Finally, in South America, we just started the ramp-up of our midsized pickup truck, Ram Dakota. Ram Dakota joins two things: Ram, which is recognized in South America as a top brand for pickup and us being strong into the pickup segment in South America, which is the largest profit pool over there. So again, that will be a good move for profit mostly, but also for mix, obviously, and volume.
In Middle East and Africa, we are ramping up the plants there, especially in Algeria and in Turkey. So in Algeria, we have a very strong leadership position in the market with a dominant market share. And in Turkey, we are, as Stellantis, a leader as well of the market and ramping up production, increasing volume, increasing sales. Both markets in the region represent among the highest profitable market that we have over there.
So we have many launches, many launches already done and some that are coming that will add volumes, will add mix benefits and for some of those very high profit per unit benefits. Thank you.
Sorry, the supply chain risk. So this is the second part of your first question. No, we don't see impacts so far. Obviously, we need to keep monitoring any evolution of the current situation that we have, for instance, Middle East and Africa, [indiscernible].
I want to just maybe celebrate that on supply chain risk containment, we have been successful in many regions. Talking of North America, for instance, we were impacted by the aluminum shortage out of the production disruption in Novelis, our aluminum supplier. We are able to contain that risk basically to lose 0 production. So this is a risk that usually we work very well around it. Thank you very much.
The next question comes from the line of Tom Narayan from RBC.
Yes, Tom Narayan of RBC. So I just wanted to clarify what you said on North America margins. So the tariff does get worse, right, because the one-time benefit, EUR 400 million goes away. So tariffs gets worse the remainder of the year. Raw material, commodity gets worse as well. And even with that, you're going to see sequential margin growth in North America. Is that true?
And then the second one, and this may be more for the Investor Day, but Volkswagen this morning announced some big, lofty goals, which included a lot of capacity pruning, especially in Europe, just lowering production volumes. Just curious, is that something you see as well as needed, just a lower breakeven level by cutting production? And if you're open to potentially doing partnerships with Chinese OEMs in the U.S.?
Okay. No, thank you for your question. So -- on margins in North America, yes, they will improve sequentially quarter-by-quarter. So in quarter 2, we'll see a margin improvement against quarter 1, excluding the IEEPA impact, which is a one-timer. And then in quarter 3, we will keep improving. In quarter 4, we'll keep improving. That will be a trajectory in North America of margin per unit improving quarter-by-quarter and also improving versus prior year. And that means that we will be able to contain what we see today as potential inflationary risks and other risks. This is point number one.
How we will do that? Well, as I said, we were able to improve dramatically mix in North America through some pickup trucks trims, especially the ones that are equipped with the V8 Hemi engine that represented 40% of the shipment. And on that mix lever, we want to keep pushing as we see demand growing and high interest from our customers and orders from our dealers. And then we have new launches, and we have the price discipline that we started, and we will be committed in having.
On top of that, and most importantly probably, globally, we launched this cost management program that has high ambitions, high expectations and high commitment from all of us in Stellantis. It will most probably also include fixed cost management, as you mentioned. On all of that, I would invite you to join us at our Investor Day, May 21. That will be, among others, an important topic that we will share and develop altogether. Thank you very much.
Sorry, I forgot the last part of your question, which is about U.S.-Chinese partnership. No. The answer is not. We don't see now a U.S.-oriented Chinese partnership. Obviously, as you know, we are very keen in developing our partnership in Europe, South America and also Middle East and Africa with Leapmotor. Through Leapmotor International, we have a strong commercial cooperation that is having Leapmotor and us growing market share in those regions. And we are sharing interest around potential industrial cooperation as well with this important partner. Thank you.
The next question comes from the line of Christian Frenes from Goldman Sachs.
Three quick questions since a lot of them have been asked already. In North America, you benefited from an increase in Ram mix in Q1. I'm wondering when you expect this Ram mix benefit to normalize or stabilize? That's question one.
And question two, looking at Europe, obviously, vehicle net price was a significant headwind. It seems that the structural reasons for that headwind are not going away anytime soon. So I'm just curious, should we expect sequentially that, that headwind will continue? And just what are your thoughts on that?
And then lastly, on Leapmotor International specifically, it's a really interesting JV. How do we think about profitability for that JV, especially as you sell into Europe?
Okay. Perfect. So I will start for North America. So we understand that revenue and mix will keep growing in North America along the year. The reason of that is because we see a very strong and robust order portfolio in the truck space and also around the highest-profit Jeep products. Also Dodge Charger SIXPACK is growing both in volumes and in our product portfolio -- in our -- sorry, order portfolio. And among the Dodge Chargers, the trim, which is powered by our ICE engine, the GME Turbo-6 is the one that has the best profit per unit. So mix will be a lever all around the year. And along with the growth of those cars and trucks, also revenue will be in our plan growing along the year.
When we see Europe, Europe is facing a regulation that is limiting the industry of light commercial vehicle. It is an important point that ACEA as association is taking as common agenda. The point is that if you look at the average small entrepreneur of Europe -- and we know that the GDP Europe is powered by those small and midsized enterprises.
Imagine an entrepreneur that distribute flowers and he has a 5 vans fleet and he's in the moment to change and to buy new ones. If there is a regulation out there that force this entrepreneur in buying BEV light commercial vehicles, vans, he will easily check that the total cost of ownership of the electric vans is higher than a used one, right? So he will stay longer with the 5 old vans before changing them into new electric ones.
What that will trigger for Europe? Well, a lose-lose situation where this small entrepreneur will pay higher maintenance because these vans are getting older. The industry lose 5 vans to build because there are no 5 new orders as expected. And finally, also the 5 old ones will pollute more than 5 new ones, whatever powertrain they have, so also environmentally.
So this is the point, right? Regulation is forcing an unattainable mix of BEV into light commercial vehicle. As a consequence, light commercial vehicle is shrinking as an industry. And this is something that we need to offset with cost actions, with price action, while we keep engaging the commission to -- as ACEA is doing, as the association is doing as common agenda to change this regulation.
Finally, Leapmotor International. So it's doing well. As you know, the offer of Leapmotor is on BEV only. On BEV, we are growing the volumes. So we have sold 24,000 units in quarter 1, growing in all major markets. The last market that posted relevant growth were U.K. -- was U.K. for Leapmotor, and it's profitable. Profits per unit on BEV are strong. And profitability is mainly driven by the high competitiveness of those products and the technologies that those products carry. So a good weapon for Europe for compliance and obviously, for profitability and volumes. Thank you very much.
The next question comes from the line of Stephen Reitman from Bernstein.
I have two questions, please. Could you comment on the United States, what the channel mix has been like? Has there been any increase in commercial activity in terms of sales to fleet and particularly thinking about daily rental and to other channels?
And secondly, Leapmotor, you sell the Leapmotor vehicles from existing Stellantis dealerships. What has been your experience of the cross-shopping? And with that strong growth you're seeing in Leapmotor sales, what does it come at the expense of? Has it come at the expense of Citroen or Peugeot or Opel or other vehicles?
Perfect. Thank you for your question. Those are really great questions, and I'm pleased to answer. So channel mix in U.S.A. So we are growing on all channels. Market share is growing in U.S. retail, is growing in Mexico, is growing in Canada. And the fleet sales, they are back to historic level. So they are not higher than historic level. They are just back at those historic level.
What we need to do is keep maintaining those historic level because they are good for us and keep improving as we started already, the mix in that channel. So as you know, there are three major sub-channels, if I can use that term. One is rent-a-car. The other one is governmental sales. The third one is commercial or small business sales. Obviously, governmental and commercial are the highest profitable sub-channels. We are growing in those, and we need to keep growing in those. But overall, channel is at historic level. And we want to maintain this historic level, while U.S. retail is growing market share, Canada is growing market share and Mexico market share. This is the synthesis of sales in North America.
When we go into your question on Leapmotor International, it's a very interesting one, and we are obviously monitoring a lot. But in quarter 1, Stellantis grew with and without Leapmotor sales. That means that all the brands that you mentioned, Fiat, Citroen, Peugeot, Opel, among others, have been growing, right? Especially Fiat has been growing a lot in Italy. Citroen has been growing a lot in the overall landscape of Europe. Opel has been very strong in accelerating in quarter 1. So what we see is general growth of all Stellantis brands in Europe and also a growth of Leapmotor that finally registered 24,000 units in quarter 1.
When we look at the service of cross-shopping, very, very, very limited. So we don't see so far risk of overlapping of offer. Actually, Citroen is growing through smart car, especially Citroen C3. Fiat is growing a lot through smart car with Fiat Grande Panda. Peugeot is growing all over Europe and also Opel is growing with Frontera. So we haven't seen so far, but we don't see risk of cannibalization and cross-shopping is limited with Leapmotor International versus the other brands of Stellantis. Thank you very much.
The next question comes from the line of Horst Schneider from Bank of America.
I have got two left. The simple one, we talked -- you talked in the previous comments a bit about raw materials and the impact from that, but I'm not clear what is now the guidance for 2026. So globally speaking, is it more than 1% of sales negative impact? And how much have you seen in Q1? If you could clarify that? And if this impact accelerates in the quarters going forward? Would be great.
Question 2 is, when I think about your comments about product mix, I ask myself, what impact do you see now from the higher oil price? Is there already a change in consumer behavior? I know that the perspective in the U.S. is a little bit different because fuel prices are below [ than ] Europe clearly. But I checked that basically a V8 uses 40% more petrol than a V6 and something like 3x more petrol than a PHEV. Don't you think that there's basically that there could be a shift again away from V8, that the market shift, the demand shifts more to HEV and to V6 also in the U.S.
Yes. On raw material, there is a lot of volatility. Based on the current price that we see on the market, if they persist during the year, net of the hedges, the full impact could be -- could approach close to 1% of revenue. And the impact in Q1 was still limited because of the curve of the raw materials and also the hedge position that we had at the beginning of the year.
And on oil price, thank you for asking me that because it is a very important and relevant question. So obviously, we cannot predict how long this oil price surge will stay, right? It depends on many geopolitical factors. They are external. And obviously, any external factors will be a factor for the overall industry. So the overall industry will move more or less, I believe, in the same direction now.
What we are seeing in the consumer behaviors, as you said very well, it's different in Europe and in North America, just to mention the two major regions. What we are starting seeing in Europe is a strong acceleration of order intake around our battery electric vehicles. And this is good for many reasons, mainly because we can offer in Europe among the best competitive battery electric vehicles of the market, think into Citroen C3, BEV, just to mention one and also, as you said, Leap models. So that we are seeing already. We will manage it as an opportunity for many reasons, being one compliance, obviously.
In North America, mainly in the U.S., the oil price pressure is lower than in Europe. What we are registering is a higher interest on hybrids. This is the powertrain that is fastest growing in the market, hybrids. And this is good as well because we offer Jeep Cherokee hybrid. We just started production. We are ramping it up in Toluca. We are starting delivering units to consumer, and we see that consumers are very pleased to receive their Jeep Cherokee hybrid. So this acceleration of the interest into hybrid is positive as well that we will manage as an opportunity because we have Jeep Cherokee hybrid.
On the other side, actually, the orders around Hemi V8 keep coming in, and they are accelerating. 40% of the deliveries of quarter 1 of our pickup trucks have been equipped with this engine, which is good for many reasons, including profitability. So what I think is this double side of the equation, right? A lot of interest for Hemi and a lot of orders coming paired with strong deliveries, but also higher interest in hybrids. That's why we plan to deliver more Jeep Cherokee hybrids for the rest of the year. Thank you very much.
But more hybrids and more BEV sales mix is margin dilutive or not? It's not a product mix improvement for margin.
You are right when you compare nameplate to nameplate, so Cherokee hybrid against Ram, but the volumes and the mix that we see growing overall with the trucks, the pickup trucks and specifically with the Hemi V8 engine will much more offset that partial gap. Actually, as I said, the fastest-growing brand in all region has been Ram and pickups are accretive for mix and for profit, as you know. And within pickup trucks, the fastest-growing powertrain, the dominant one has been the most profitable, and we keep seeing accelerating interest around trucks and around Hemi. So overall, mix will be positive for the rest of the year. Thank you.
The next question comes from the line of Henning Cosman from Barclays.
First one, please, on the underlying assumptions for the course of the year, specifically again on raw material and also on tariff. On raw material, Joao, I understand you're saying industrial cost positive despite the headwinds from raw material, but I was just hoping you could quantify the raw material headwinds you're expecting -- on the hedging a little bit. How much are you expecting sequentially perhaps in terms of raw material headwinds?
And on the tariffs, I'm just a bit surprised that with the increase in expected Cherokee and Charger volumes, you're not incurring more tariff headwinds. So I was just wondering, do you have any sort of expectation built in for USMCA [indiscernible]. Or why is the tariff headwind not increasing upon importing so many more of these models from Mexico and Canada at the very high tariff rate. So that's the first question on the underlying assumptions.
And secondly, Antonio, I know we're almost at the CMD now, but I'm surprised it hasn't come up. And I just wanted to give you the opportunity to comment on all these headlines that have come through since you've last talked publicly. We obviously have these headlines about potential combination with various Chinese companies in Europe, capacity reduction, focusing CapEx just on the four core brands. Just wondering if there was anything at all that you wanted to comment on before we see each other in a month from now.
Okay. So on tariffs, we are not -- we don't have any different assumptions for USMCA. The projections that we have on tariffs assumes the current tariff scheme that we have. The Cherokee and Charger volumes that Antonio talked about and the continued growth was already included in our plan. And then raw materials, again, it's very volatile, but the impact in 2026 net of hedge could be in addition to EUR 1 billion.
Perfect. And thank you for your question, by the way, and I'm very, very pleased to see you and meet you at our Investor Day, May 21, where we will touch for sure, and will share our strategies around the two topics that you highlighted, right?
One is, if understood well, brand portfolio management, right? And on that, I want to say a couple of things. Number one, every day, we understand we have the privilege to work with so many iconic brands. They carry an undisputed and privileged legacy, a beautiful history, a lot of tech and a bright future. They carry communities of clients absolutely in love with them. And they talk every day with the largest car park in Europe, specifically since I believe your question is about Europe.
So what is the equation that we will share and show to you what is our solution in Investor Day. How we manage this brand portfolio, considering the strong asset that we have with all of them and triggering two things. Number one is how we expand the market coverage of all of them. Number two is how we are efficient in capital allocation. The solution of the equation is to go in parallel on those two drivers and have the best efficient capital allocation that will allow our brand to express the full potential. And obviously, more details will come at the Investor Day.
The second part of your question is about partnerships, Chinese partnership. And I believe that you are alluding to fixed cost management. So we have one partnership, which is very strong with Leapmotor. We started commercially only Leapmotor International. It is growing our mutual interest in discussing of potential industrial partnership. So this is what we are working. And on the other potential moves, I would just be pleased to meet you and share our thoughts with you in our Investor Day in May 21. Thank you very much for your questions.
The next question comes from the line of Christoph Laskawi from Deutsche Bank.
It's Christoph Laskawi from Deutsche Bank. The first one, I'm sorry, to come back on European pricing. Could you comment a bit if the pricing was basically driven by LCVs being very negative, also, on the pass car side? You alluded to the CO2 regulation obviously being one driver. And then again, raising the question, just do you expect that pricing to be sequentially flat throughout the year in Europe? Or is there increasing pressure and we should expect it to come sequentially down? That will be my question.
Those are very important questions. Thank you for those. Pricing in Europe, so we expect two things happening in Europe, right? Why we'll keep working on regulation, as you said. On pricing, we understand that we have the opportunity to stay flat on the position that we have. But we have an even larger opportunity to work on cost. As we said, we launched this massive cost management program, VCP, value creation program all around the globe, mainly focused in North America and in Europe. So this is what we expect on pricing and mainly on cost.
Then there was a second part of the question, I don't remember. Okay. So I believe that was your question, correct? Or you have more?
Just if you can comment if it's more driven by LCVs or pass cars, the price decline?
It's all around the lineup. It is in the lineup. So I'm talking on an average. Obviously, mix improves when sales of light commercial vehicle improves, but my comment was on the average price.
Ladies and gentlemen, this was the last question. With this, let me now hand the call back to Mr. Antonio Filosa for the conclusion.
Very well. And again, thank you, everyone, for the time and focus you have put into reviewing our results and listening to our business updates. And we look forward to speaking to you next at our Investor Day event on May 21. Thank you again. I'll see you in Auburn Hills. Thank you very much.
Stellantis — Q1 2026 Earnings Call
Stellantis — Q1 2026 Earnings Call
Stellantis returns to profitability in Q1 2026 as shipments rebound and execution tightens, guiding the year with discipline.
📊 Quarter at a Glance
- Shipments: 1.4 million units, +12% YoY
- Revenue: EUR 38.1B, +6% YoY
- AOI / Margin: EUR 1.0B, 2.5% margin (+160 bps YoY)
- Industrial FCF: -EUR 1.9B, improved by EUR 1.1B YoY
- Liquidity: EUR 44B available, ~28% of net revenues
🎯 What Management Says
- Momentum: Return to profitability with disciplined execution, customer focus and stronger regional execution.
- Launch cadence: 10 new products and 6 refreshed models in 2026; upcoming Ram SRT TRX, Jeep Recon BEV and Grand Wagoneer REEV.
- Cost & capital: Global Value Creation Program to improve costs and capital allocation; Investor Day on May 21 to outline targets.
🔭 Outlook & Guidance
- Guidance: 2026 targets reaffirmed; revenues, margins and industrial free cash flow expected to improve; strong liquidity and a more resilient operating model.
- Risks: Geopolitical volatility, trading and inflation pressures; commodity headwinds partly offset by hedges and IEEPA benefits.
❓ Analyst Q&A
- NA margins: Sequential margin improvement expected in Q2 and through 2026, excluding IEEPA one-offs, supported by mix, pricing and the Value Creation Program.
- Europe & Leapmotor: Pricing expected to stay flat; cost focus via VCP; Leapmotor International is profitable with limited cross-shopping risk.
- Capex & cash: CapEx guidance about below 7% of net revenues; working capital is seasonal; free cash flow expected to improve vs 2025 in 2026.
⚡ Bottom Line
Q1 2026 confirms a return to profitability and momentum after Stellantis’ reset, with guidance reaffirmed and a robust cost-discipline program to lift margins and free cash flow through 2026, despite ongoing macro headwinds.
Stellantis — Q4 2025 Earnings Call
1. Management Discussion
Hello, and welcome to the Stellantis Full Year Results 2025 Call. [Operator Instructions] I now give the floor to Mr. Ed Ditmire, Head of Investor Relations, to begin today's conference. Sir, the floor is yours.
Thank you, Tibro. Hello, everyone, and thank you for joining us today as we review Stellantis' full year 2025 results. Earlier today, the presentation material for this call, along with the related press release were posted under the Investors section of the Stellantis Group website.
Today, our call is hosted by Antonio Filosa, Chief Executive Officer; and Joao Laranjo, Chief Financial Officer. After their prepared remarks, Antonio and Joao will be available to answer questions from the analysts.
Before we begin, I want to point out that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement included on Page 2 of today's presentation. As customary, the call will be governed by that language. Now I'll hand over the call to Antonio Filosa, Chief Executive Officer of Stellantis.
Thank you, Ed. Thank you very much. And thank you all for joining us today. What we will discuss today will be familiar to you from our preliminary results announcement on February 6. In summary, first, our return to top line growth in H2 '25. Second, the decisive reset we announced on February 6, which by putting the customer back at the center of everything we do, will enable our return to profitable growth. And third, after this reset, '26 is our year of execution. What we have committed to deliver its progressive performance improvement on all of our business KPIs. As you can see, we have a very full agenda. So let's get started.
First, just a quick summary of what we will talk about. '25 was a year of reset with results that reflect the considerable cost of needed changes. But H2 '25 also showed encouraging the first signs of the benefits of that reset. We returned to top line growth in H2 '25, and that momentum was carried over into early '26. For example, in January '26, our U.S. market share was up year-over-year and European share saw a sequential increase compared to H2 '25. Our decisive results around our customer preferences will drive profitable growth.
And let me give you just 2 examples of what this means in practice. Number one, after the return to the ICE muscle-car segment, this week, we have started production on 3 new Dodge Charger SIXPACK variants. Those will represent 90% of the expected volumes. Number two, our global, offensive to improve quality started very strong with 1 month in service over 50% improved in North America, over 30% improved in Europe and 20% improved in South America since 2025.
Let me ask now Joao to walk you through the numbers.
Thank you, Antonio. Good afternoon, and good morning, everyone. Let me start with the financial figures for full year 2025 on Page 7, which reflect a time of reset for the company. Consolidated shipments of 5.5 million units were up 1%, with increases in South America, North America and Middle East and Africa. Net revenues of EUR 153 billion were 2% lower year-over-year. AOI margin was negative at 0.5%. This reflected the early stage of our recovery and substantial net tariff expenses as well as a number of specific items.
Our adjusted diluted earnings per share reflect our decline in AOI. And our industrial free cash flow saw outflows of EUR 4.5 billion for the full year. For net revenues, overall, a challenging picture for the full year with a negative 2% year-over-year comparison, but an encouraging second half at plus 10%, particularly where it comes down to 2 elements most under our control, volume and pricing. The H2 net price improvement is driven by increases in North America and Middle East and Africa, partially offset by negative net pricing in Europe.
And as you can see here, FX headwinds were even stronger in the second half, especially due to the Turkish Lira. Keeping our focus on the second half, we look at the AOI walk. Here, we see the beginnings of improved results. First, in the form of top line bridge factors like volume and net pricing. At the same time, on the cost side, H2 results were subject to a list of specific items, which more than offset both the top line positives of volume and price as well as improvement of other more foundational industrial costs, which were moving in the positive direction. Most of these items called out in orange are not expected to be repeated.
Next, FX headwinds were nearly EUR 1 billion negative to AOI. This was driven overwhelmingly by the Turkish Lira devaluation, which was partially offset in the period by net price improvement in that region.
Turning to the industrial free cash flow. Both full year and H2 showed improvements. This was largely due to improved working capital and lower capital expenditures. H2 industrial free cash flow of negative EUR 1.5 billion represented a 50% sequential improvement compared to H1 2025 and 73% year-over-year improvement. Our cash flow is now moving in the right direction. But of course, returning it to positive is the objective moving forward.
Now on new vehicle inventory. 2025 was a year of strong inventory discipline in terms of the relationship between stocks and sales. The stock levels increased in absolute terms towards year-end, aligned with sales growth, plus new white space products that began shipping to dealers. Lastly, I would mention here North America and European order books, both finishing 2025 at 3 months of sales.
Now turning to our regional review, where I will focus on the second half. In H2 2025, shipments saw increases in all regions year-over-year. North America posted the strongest contribution, a 39% increase in shipments and a 31% increase in revenues, reflecting the benefits of normalized inventory dynamics as well as higher sales. North America H2 AOI improvement versus prior year was driven by higher volumes and pricing, partially offset by higher industrial costs, mainly tariffs.
Enlarged Europe, H2 AOI decrease versus prior year was driven by higher LED mix and net pricing decline due to the strong competitive environment. The South America H2 AOI decline versus prior year was due to some increase in costs. Lastly, in Middle East and Africa, shipments had solid growth, driven by increased [ Stellantis ] production in Algeria as well as strong Turkish market. However, margins declined primarily due to the very competitive market environment in Turkey, which prevented FX pressures from being fully offset by net price increase.
Moving to our summary financial figures table. There are a couple of things I want to point out. Our net loss of EUR 22 billion primarily reflects our strategic shift to adjust to customer preference and in response to change in the U.S. regulatory framework. The net loss was steep, but most of the impact was non-cash, and therefore, the company's balance sheet ended the period in a strong place. Our industrial liquidity finished at approximately EUR 46 billion, 30% of revenues at the upper end of the company's target range.
Looking ahead to 2026 now. As Antonio mentioned in his opening remarks, we are confirming our 2026 financial guidance laid out at February 6. As previously disclosed, we will start reporting full year earnings results on a quarterly basis, something which I know many analysts and investors have been asking for.
There are also some changes in our segment reporting. Most importantly, we will integrate the Maserati business into the regional segments in the way that is consistent with all of the other brands. To help analysts and investors prepare for how we will report in 2026 and beyond, we will publish in March an updated financial reference sheet, which shows the updated segments and quarterly earnings results for 2025. I will now hand you back to Antonio.
Thank you, Joao. Let's talk more on our return to growth in H2 '25 and the actions we have taken to keep that momentum into '26. First, let's discuss how the company is returning to top line growth in H2. Let's start exactly where we began. With our North American inventory management, the discipline we reestablished at the end of '24, when we cleared the accumulated inventory was carefully maintained in '25. And now we see rewards for that. U.S. [ neo ] supplies ended the year at 69 days, a very healthy number. At the same time, we need good progress with our net pricing that was up 2% year-over-year in H2 '25. With these healthier dynamics, we have seen year-over-year improvements in both sales and net revenue.
Now let's move to the actions. We said we would take in '25 to strengthen the business. On growth, we launched 10 all new products in '25. Among them, the return of the Jeep Cherokee in the midsized SUV segment, the largest segment in the world. We also progress in the rollout of our smart cars in Europe and ramp the quota launch in South America that addresses the midsized truck segment, home of the region's largest profit pool.
On execution, we launched a deep reset of our quality organization, hiring over 2,000 new engineers to drive improvement. And finally, on profitability. We will increase production of the HEMI V-8 engine by 100,000 units in '26. We already launched the SRT division in the U.S. And in Europe, we will benefit mix gains with the recent introduction of Fiat 500 hybrid. These are only a few actions among many that we lay down strong foundation for '26 results.
So let's look at the early effects of those actions. Looking at the combination of Europe and North America, starting from the left, you see net revenues in Europe and North America, up 13%. In the same period, order portfolio in North America and Europe combined is up 46% with North America up 150% and Europe, up 18%. And then looking at the rest of the world, while performance was always and already strong. We see their commercial strength keeping momentum.
Now turning to industrial free cash flow. We are making progress from a very difficult place, sequentially improving in each of the last 2 halves. We expect that progress will continue in '26 and '27 when we expect industrial free cash flow to turn positive.
Okay. So now that we have covered how we started the journey in '25, let's talk about the important changes we made to position the business for long-term profitability. Starting in the U.S. We are investing to dramatically improve our market coverage while improving the utilization of our U.S. manufacturing footprint. This $13 billion investments over 4 years is a strategic long-term business decision designed to drive big growth.
Under this plan, we will introduce 5 new vehicles and complete the renewal of our current lineup with 19 additional product actions. At the same time, we will deliver to our customers freedom of choice in powertrains with innovative new ICE, BEV, hybrids and range extended products. And it is exactly that freedom of choice that takes us to the next slide. And why on February 6, we announced the profound reset that puts the customer back at the center of everything we do.
We have reset our organization to empower the regional teams, reset our stakeholder relationship so that we can address challenges together, reset our product plan and EV supply chain to reflect real-world customer demand. And we are resetting our manufacturing and quality processes to deliver to our customers the experience that they deserve.
Now let's turn to 2026, the year of the execution. First, let's look at our ongoing product wave, which is critical to enable growth. In '26, we will benefit strongly from a long list of new product launched in late '25 that address white spaces of the market with several more being introduced in early '26.
Our product wave paves the way for us to grow in the right segments. For example, it includes our midsized SUV offensive in the U.S., the largest segment of the world with our all-new '26 Jeep Cherokee, also our C-SUV offensive in Europe, which is the largest profit pool there, now [ threatened ] by the all-new Jeep Compass and Citroen C5 Aircross.
With this next slide, I just want to highlight 2 new models recently announced by RAM. These show the quick and decisive actions we are taking to connect again with buyers. The return of the TRX with 777 horsepower from its supercharger HEMI V-8 and immensely capable Power Wagon. Those are examples of products that bring next level performance and next level appeal to some of our most demanding customers.
Next, the Jeep Twelve 4 Twelve Program represents an exciting reinvigoration of our Jeep Wrangler franchise with monthly drops of special editions. The latest, the Willys 392 has been exceptionally well received, combining the HEMI V-8 power with a more affordable price.
Now a couple of important topics outside the U.S., starting with Leapmotor. We had an incredible first full year of the partnership with around 50,000 units shipped in '25, and we are accelerating across multiple dimensions. We continue our commercial expansion in Europe, not only with additional products, but with local production in our plant in Spain, planned to start in the second half of '26. This will be followed by South America, where we intend to start local production in our Pernambuco plant with big commercial expansion there, too. So stay tuned.
Next, let's turn to the Smart Car platform, those vehicles that are becoming a bigger part of what we do both in Europe and in the rest of the world. This platform was designed to produce affordable multi-energy vehicles. Those include Citroen C3, Citroen n C3 Aircross, Fiat Grande Panda and Opel Frontera, all already in the market. These Smart Car vehicles go very well with 325,000 orders collected in '25 and an order book, which is up 80% year-over-year.
Now we'll walk through high-level regional updates, starting with North America. As we have touched on, the return to growth was strongest in North America in H2 and the product we will continue that momentum as we begin '26. In H2, we achieved a 4% growth in sales, improved our market share by 20 basis points and grew our order book by 150%. RAM continues to be a huge long-term opportunity for us with more details to come at our Investor Day in May.
Now Europe. Here, we continue to have strong positioning, #2 in overall share, #1 in B-segment, #1 in light commercial vehicles. Building on this, we have product tailwinds that will help us in each of the A, B and C segments in '26. At the same time, the regulatory dynamics present real headwinds for the industry and our customers, in particular, in the light commercial vehicle business.
The trajectory of electrification demanded by regulators for light commercial vehicle is nowhere near real market demand, and we continue urging practical solutions in our engagement with institutions and policymakers.
Now for the rest of the world. South America continues to maintain its #1 share position. The Ram Dakota launched in Argentina in December and will launch in Brazil in March, entering into the very attractive midsized truck market. In Middle East and Africa, we have improved our market share and have seen shipment up 9%. We are deepening the roots in the region by expanding local production.
Lastly, in China, in India, Asia Pacific, shipments saw growth up to 18% year-over-year. Well, a quick reminder of our upcoming Investor Day on May 21, where we will communicate in detail our new strategic plan. The registration for this event is now open. You can register now online, and we look forward to welcoming you in May to Auburn Hills or virtually on the webcast.
Before opening to your questions, let me recap the key points from today's presentation. H2 '25 saw a return to top line growth as we executed a deep reset of our business to put the customer back at the center of everything we do. As we move into '26, which will be the year of execution, we expect to see progressive performance across all our business KPIs. Thank you. And now I'll ask our operator, Thibault, to open up the line for questions.
[Operator Instructions] Now the first question comes from the line of Jose Asumendi from JPMorgan.
2. Question Answer
It's Jose, JPMorgan. One question, one related follow-up. With regards to Europe, it looks like you may need to take larger restructuring measures to turn the business profitable. We see that market share is rebounding, thanks to the strong product lineup. But we can potentially argue that it's coming at the expense of incentives. So can you talk a bit about Europe and whether we need larger restructuring measures to turn the business into profit making?
And the related follow-up, we already obviously in the first quarter, do you think the U.S. business is starting to turn the corner and bring profits? If you could give us any color there?
Okay. Thank you, Jose. Thank you very much for this very important question on the 2 main important and largest regions that we manage around the world, Europe and North America. So let's start with Europe. As you said, very encouraging rebound of market share and on volumes in January, we see the same results coming for February as well. We see very strong demand for smart car products and also will be one of the foundation for profit building in Europe in 2026.
We have an order portfolio, which is very large, up 80% year-over-year. We also see our strong position, our immense strength in light commercial vehicle in Europe where we have a dominating position in the market with a market share of around 30%. And obviously, this is the second lever for a profit building in '26. Obviously, Europe stay a tough environment, where regulation still is unclear, and we are engaging the policymaker to talk about regulation mainly on light commercial vehicle where we understand that there is a very urgent change of rules.
In North America, what we are seeing in January is, again, market share up, I believe, around 0.3% year-over-year. We see new products coming into the inventory of our dealers, much expected Jeep Cherokee will be visible in March to our dealers. Charger SIXPACK where we have already launched the higher trim, and we will complete the lineup of this important ICE model with 3 additional trims. They will represent 90% of the total volume. And obviously, profit coming from additional production of trucks, light duty and heavy duty and very strong demand of the V-8 engine HEMI. On the cost structure of Europe and North America, we are working a lot. Obviously, higher detail will be disclosed to you in the Investor Day. Thank you very much.
The next question comes from the line of Michael Tyndall from HSBC.
I wonder if I could just ask one -- well, a couple as it were. Just on operating leverage in North America, very, very strong shipment growth circa EUR 7 billion increase in revenues year-on-year. But the volume drop-through seemed to be quite low on that revenue. I wonder if this is part of the rebuilding relationships whether that means that the business is perhaps going to take a bit longer to get to that cadence in terms of operating leverage?
And then sort of related, South America, just on the Brazilian real impact on industrial performance. Could you just unpack that a little bit for us? Is the cost base not in real? Or is there some other factor there that's driving that? Just trying to figure out what happens going forward on the margins in South America.
Perfect. Well, thank you very much for this question. So what happened in H2 '25 in North America is a very strong growth in volume, as you said, this is very encouraging. This is commercial momentum that we will strongly carry on into 2026. We also had pricing up, as you mentioned, and what we had is some mix effects driven by light-duty and heavy-duty truck production, a little constrained by technical issues that we have in the ramp-up of our plans that now we have basically entirely solved.
So what we see for 2026 is mix improvement driven by light-duty and heavy-duty additional production mainly due to very high demand of the HEMI V-8 engine. Also mix will improve in '26 because we will build and sell less PHEV. So those are the major driver of the growth of North America in profitability in '26, and this growth will be the largest contributor in the world for Stellantis profitability.
Now let's move to South America, which is your second part of your important question. So in South America, in H2, we see 2 things. One, cost structure in Brazil impacted by FX headwinds. For '26, we'll be keen in doing 2 things, reducing costs technically and recovering price difference.
Then we go to Argentina, and in Argentina, what we see in H2 '25 is price, not fully recovered the strong devaluation of the Argentinian pesos. So that will be, for sure, the focus of '26 of the team. Now South America is a big contributor to our profitability. South America enjoys a very large leadership position in the market with us #1 and #2, which is less than half of our market share. Based on that, we will build profitability for '26, again, working on price and cost both in Brazil and Argentina. And Joao, if you can add something.
Just on South America. On the industrial costs on the second half versus prior year, there is also an impact of the -- one of the specific items that we communicated on February 6, and we've repeated at this call. It's a provision for a supplier and part of that provision was recorded in South American industrial costs. So there is a portion of the industrial caused a negative impact in the second half of 2025 that is not going to carry over to '26.
The next question comes from the line of Itay Michaeli from TD Cowen.
Wanted to ask a question on the mid-single-digit revenue growth outlook for 2026. I was hoping you could provide a bit more color on some of the market assumptions for the U.S. and Europe as well as perhaps some of your market share assumption. I ask because it seems like the outlook might be a little bit conservative just relative to some of the U.S. retail sales target, at least we've seen reported out there for the company. So hoping to get a little bit more detail on the assumptions behind that outlook.
Yes. First, on the market assumptions, we are forecasting North America to be slightly down about 2% year-over-year in terms of total market. In Europe about flat and as we talked before and Antonio also explained the growth that we expect to see it's on the back of the new vehicles. In North America, the HEMI and the RAM Express, the Jeep Cherokee and the Dodge ICE Charger. And in Europe, it's realization of the ramp-up of the smart car. So we are very excited about the demand that we are seeing on those products. And that's basically what's going to drive the revenue growth. So I'm sure Antonio, do you want to add something here?
No, you said it all. We are seeing a big response of the market on what we are launching, a lot of expectation for the Jeep Cherokee, a lot of expectation for [ DM ], a lot of expectation on the fourth no charge ICE, as I said, we are completing lineup with additional 3 trims that we are launching this week. So we see North America in a context of, let's call it, stable industry, potential market growth available to us because of the new products, these are all launching in white spaces of the market for us.
The next question comes from the line of Thomas Besson from Kepler Cheuvreux.
A couple of questions as well. Maybe circling back to the earlier questions and asking a bit more bluntly. Should we expect or can we hope to see your 2 main regions, North America and Europe in positive territory in 2026 in terms of AOI? This is the first question.
And then the second, you've been building up your FS, financial services operation quite dynamically over the last couple of years. Could you please talk about the equity addition and profit contribution in 2025 and what we could expect would be a driver to help you effectively move back to profits in the U.S.?
I will take the first part of your question, I'll leave the second part to Joao. First part of your question, the answer is very easy is, yes, being North America, the largest engine and the largest contributor for our '26 profitable growth for Stellantis in the world. And Joao?
Yes. So the first comment here is just to reinforce that we are fully committed with our financial sales and especially the financial sales in the U.S., we see that as a huge opportunity for growth to support the OEM sales, increased loyalty and obviously generate AOI and cash flow. We expect to continue to grow in 2026.
The apt contribution that we have forecast for 2026, it's similar to what we have done net of dividends in '25 for SFS overall. SFS globally in 2025 had impact of some of the specific items, 2 of them, it's the U.K. fines and the PHEV residual. So definitely, SFS will be a big contribution for the year-over-year profit improvement for Stellantis globally.
The next question comes from the line of Patrick Hummel from UBS.
It's Patrick from UBS. The first one is on your investments. They came down quite a bit in the second half of the year. And from a conversation I had earlier today with Ed, it seems like 2026 is not going to see any increases in investments. Can you confirm that is correct? And if so, how does that square with the $13 billion you're planning to invest in North America? Are you taking money off the table elsewhere just to understand the context of -- yes, how are you going to that low CapEx or overall investment level. .
And my second question. Regarding Maserati, you said you're going to integrate it into the regional accounting. Should we read that as a strategic decision that Maserati is going to remain part of the Stellantis Group, even after the strategic review of your entire brand portfolio? Is that a decision now already taken?
Well, thank you for your question. I will take the second part of your question, I will leave Joao answering the first part. So the overall organizational strategy for Stellantis starting from half 2 of '25 has been to increase level of regionalization. Since we strongly believe we are a strong global company with even stronger regional routes. So putting back Stellantis as individual segment into the regions where it is sold, is a follow-up of this execution of having our organization much more regional than before. Then for details on Maserati on all the brand portfolio, I will invite you to attend our Investor Day May 21.
Now we'll leave the first part of your question to Joao.
Yes. So I confirm that we are forecasting investments to be flattish year-over-year. It includes all the commitments that we have communicated. The $13 billion were over 4 years period. So the investments that we have for 2026, it's consistent to that. Again, at the Investor Day will give you more information about how you're thinking about investments going forward. But one thing that we can anticipate is that we're going to focus our investments where we have the highest opportunity for return on capital.
The next question comes from the line of Philippe Houchois from Jefferies.
The first question is can you make any comments on your recent quality development? You've told us you've updated on the cost, on the cash impact. Would you say industrially speaking, right now, is quality trending up, down, flat? That would be helpful.
And the follow-up question is, sorry to go back to this issue of operating leverage. The volume dropped through I mean, you mix volume and mix, so we cannot separate the 2 and like GM, for example, separates the two. But it feels like if you have a normal volume leverage, then the mix looks like a drag. And am I misreading this? And would you give an indication maybe what this normal drop-through should be in North America going forward? To me, it should be around 20% at least. If you have any comment on this, that would be helpful.
Okay. I will answer starting from the second part of this question. So as I said before, there has been a mix effect by half 2 of '25 driven by production of light-duty and heavy-duty trucks, restrained by specific operational issues that we have solved. So I can tell you very clearly that mix will improve already in quarter 1 a lot. We will increase production of light duty, we'll increase production of heavy-duty, and we will follow and reflect the higher demand that we see on HEMI V-8 engine. So this is the second part of your question.
The first part of your question is about quality. So we have changed the organization. We have put the leadership of quality in our SLT team, so in the top tier of our organization. We have included 2,000 additional engineers mainly dedicated to quality improvements and quality is improving already and a lot. So we see, for instance, in the 1 month of services indicator in North America improvements in about 50%, we see in the same indicator 1 month in service in Europe, improvement over 30%, and we see 20% improvement of the same indicator in South America. Now it's execution, it's daily execution that will drive even more positive momentum in quality.
The next question comes from the line of Michael Foundoukidis from ODDO BHF.
Two questions on my side. First, in the U.S., including recently, you talked about upcoming launches, great products, high mix. But what could you tell us about your answers and plan for more affordable options, meaning well below $40,000 to provide consumers in the current economic context in the U.S.? That's the first question.
And second one, very quick one. More for Joao. In terms of one-off adjustments for 2026, of course, it will hopefully not be comparable to what we had last year. But even excluding last year, the average in Stellantis berth is around EUR 3 billion per year. So could you confirm that we should assume a much lower figure than that at this point?
Okay. I will start. So when we look at U.S. and when we look at the sub $40,000 market, for sure, this is a portion of the market where our current penetration is low, and we are investing within the $13 billion investment over the next 4 years. Also in that part of the segment, we will deliver products to be credible players also in the below USD 40,000 portion of market, which is very large.
I will give you an example that we already announced around additional affordability on our lineup. Well, RAM, we launched a midsized pickup truck that we will develop now, and we will launch to the market by quarter 4 '27. Now for the other part of the question, I will leave Joao to answer.
Thank you, Antonio. As we have communicated on February 6, we have taken the vast majority of the charge in H2 2025. We do not forecast unusual items. But if your question is specific to restructuring expense, although we don't forecast that either. I could confirm that any restructuring expense would be well below EUR 3 billion for 2026.
The next question comes from the line of Henning Cosman from Barclays.
There seems to be a huge amount of focus on this operational leverage in North America. So I was just hoping you could maybe be a little bit more precise, Antonio with respect to the mix drag from the inefficiencies at the end of 2025, which you're hoping to not repeat in the first quarter and from there in 2026. So that we could perhaps ourselves calculate a more sustainable operating leverage for North America.
And then outside of that, if you could help us with some of the other important buckets for the North America EBIT bridge, for example, the CAFE savings that you hope to have, I believe, on the preliminary call, we talked about some relief on D&A attributable to some of the impairments you were able to have, of course, non-repeated one-offs. Anything at all that you could help us to substantiate a little bit, the positive AOI in North America that you had kindly confirmed before?
And then the second piece, if you don't mind, in terms of others, so the other segments separate to the regions, at least compared to my expectations, it was a little bit more negative than I had expected. So perhaps you could tell us what we should expect as a sustainable level for the other segment? Or specifically, what do you think that could be in 2026?
Okay. Thank you. Thank you for your questions. So again, on H2 '25 in North America, what we saw was volume up, as we all said, very high up, net price up and mix offsetting a little bit the volume effect and the net price effect because we produce less pickup trucks, light-duty and heavy-duty. We have a set of operational issues in the plant that we have solved.
So what we see now already in January is higher production of light duty, higher production heavy duty, a better mix driven by those volumes plus all the volumes of V8 engine that is very profitable to us. So this is one of the major lever of growth for 2026.
On the others, I will ask Joao to answer.
Yes. Okay. Thank you, Antonio. So for 2026, we expect to see, as Antonio mentioned volume growth on the back of the new products. We expect to see better mix both because of the increase on mainly light duty, but also the reduction of BEV and especially we have volumes in 2026. And we expect an improvement on the operational efficiencies, both because of the non-repeat of specific items that we had in 2025, but also because of the more stable operational environment that we have, plus the additional volumes.
So net of the headwinds that has been on tariffs and raw materials, we expect to be a headwinds in 2026. We expect that net of those headwinds, we're still going to see positive industrial cost through operational efficiencies.
So the improvements in North America are primarily driven in 2026 by volume mix and operational efficiencies. Those will be the key drivers. And then related to the other segment, the biggest driver for the deterioration in 2025 was on financial sales due to the charges that we have taken there. So for 2026, we expect large improvement year-over-year because of no repeat of the charge and we continue the improvement on the financial services business.
The next question comes from the line of Harald Hendrikse from Citi.
Just wanted to ask a little bit more about your assumptions regarding the market and specifically market pricing in 2026. You have lots of new products. I know they're white space for you, but they're obviously not white space for the market, and you have some really, really strong competitors Toyota, specifically Hyundai and maybe GM, the white spaces you're looking at. So can you talk a little bit about what you're expecting for the pricing environment in the market and how you expect your competitors to react to your new products? I doubt they will do nothing.
And then in the rest of the world, European pricing obviously was dramatically negative in the second half of 2025. I think your competitors are kind of saying the same thing. Chinese competition is obvious, not just in Europe but also in EMEA and South America. Should we expect that to continue and remain as negative? And again, how can you deal with that environment? It seems like a very difficult environment to improve profitability strongly.
Yes. So first on the U.S., we expect the market and also ourselves to be -- to see a stable to a slightly positive price environment as the tariff impact continues to have an effect and the market has not priced for the tariffs yet. For Europe, we expect just to continue strong competitive environment. So we continue to expect a price pressure in Europe. Globally, for Stellantis, we expect the price to be basically flat with some positives in North America offsetting price pressure in Europe.
The next question comes from the line of Emmanuel Rosner from Wolfe Research.
My first question is a follow-up on CapEx. Obviously, your CapEx was down by about EUR 3 billion last year, you're maintaining it at a lower level in 2026. I wasn't super clear on a go-forward basis. Are you constraining it in the near-term because, obviously, there's some free cash flow consideration. Is this the new sustainable level? Or do you anticipate having to spend more in '27, '28 in order to achieve some of the projects and investments? And if so, how do we get comfortable with the 2027 positive free cash flow? And then I have a follow-up.
So we expect to see CapEx increasing in the coming years, and we will talk more about that on the Investor Day and the cash flow positive for 2027 will be on the back of the continuous volume increase as we continue to launch new products and ramp up the ones that we have launched right now and continues the operational efficiencies that we are driving will continue to drive. Antonio just mentioned earlier improvements in quality. So we believe we have a lot of opportunities on the industrial cost that we're going to pursue this year and next year.
My follow-up question, if I could. Just wanted to -- I think you made some announcements today around this Leapmotor. I'm just curious if you could just articulate for us how does this help European profitability?
Yes. So obviously, we will have time, May 21 to talk about that, about Europe, about Leapmotor in Europe and in the world. But this is a partnership that is very strong for us commercially since we are accelerating our market reach in Europe, in South America and in Middle East and Africa, but also is a technical partnership that will help us in getting to higher level of competitiveness, especially for electric cars, and this is very important for Europe and the partnership that will improve our collaboration also on new tax development. That is all for now. I invite you to join our May 21 Investor Day.
The next question comes from the line of Horst Schneider from Bank of America.
Yes. My first question is on Middle East and South America. So in a way, the third engine region. You have been clear on your expectations for North America and Europe. Could you maybe also outline your expectations specifically for these 2 regions. My perception is what I see for January, for example, is that your sales were more or less down, in some cases, down a lot in Middle East and South America. So what should we expect in terms of trade-off volume and price, given that the Chinese competition is increasing in these regions a lot. .
And that takes me also to the follow-up question with regard to volume and price. You have been clear that you expect this volume increase and you expect flattish price just in case, what has got for your priority from here? Let's assume that the competitive pressure increases by the Chinese globally. Would you have a higher emphasis on volume or on price?
Okay. No, thank you for your question. So for both South America and Middle East and Africa, we see increasing volumes in 2026. January specific month for South America and also for Middle East and Africa, but our vision is higher business and higher volumes for '26. What we reported globally in '26 is profitability. And we know we have a large volume opportunity because we are launching, especially in North America, where obviously, Chinese competition is not there, many new products. But what we are pursuing is to grow with profitability.
The next question comes from the line of Stuart Pearson from Oxcap Analytics.
Quickly on working capital, can you just give us some indication what your expectations there and especially excluding any impact in that line item from obviously the cash costs and restructuring going to suppliers. So is that a tailwind this year. And with that in mind, we think about free cash flow this year ex those cash restructuring costs, and given what you're seeing on all the line KPI items improving, is it possible that that's positive ex the restructuring this year.
And then the follow-up is more just a bigger picture on the strategy. Antonio, I guess, the Head of the Capital Markets Day. I mean I know you're going to say us to wait a lot for that, fair enough. But just so we know what to expect, is this more of a, I guess, an operational plan? Or is it a bigger strategic reset? Or is it by which, I mean, is it more of just execution, improving on quality, improving efficiency and a lot of the things that you've mentioned? Or could we start to see some more radical decisions that you're preparing as well as you've been working on this plan for some time?
Well, thank you very much. I will answer to the second part of your question, and will leave Joao to answer to the first part of your question. So obviously, I invite you May 21, but I can anticipate to you that we will see both things, right? We will see a very strong focus on operational execution and operational efficiency improvement. This is quality. This is time to market. This is obviously industrial productivity. But also, we will see, I must say, a lot of answer to all the other strategic items that we have in our mind. So stay tuned. And again, I invite you to join us in Auburn Hills, May 21. Joao?
Okay. On the working capital, just to remind what we said on February 6 is that of the charge that we have announced the cash out will be EUR 6.5 billion, of which EUR 2 billion in 2026 and of that EUR 2 billion, EUR 1 billion it's in Q1. But if we exclude this EUR 2 billion payments in 2026, working capital would be a tailwind, primarily due to the volume growth that we are forecasting for this. So excluding payments, working capital will be a tailwind. On the cash flow positive, excluding payments, we have no other comments versus what we have already communicated in our guidance.
The next question comes from the line of Christian Frenes from Goldman Sachs.
Hello. Can you hear me? Hello.
Yes. Yes. Yes, we can hear you.
Great. So you took an exceptional -- significant warranty charge in H2 2025. Could you help me understand how your warranty run rate in North America and Europe will change as we move from 2025 into 2026. That's my first question.
And my second question has to do with the CAFE opportunity, the elimination of some of the penalties from CAFE. What sort of opportunity that presents. I heard Henning's question earlier on and you don't seem to be willing to answer the question and I'm just wondering, could you help me understand why you would be unwilling to answer? Is it because it's not such a significant opportunity in 2026 and it's a longer-term story? Or just as you could -- or is it just conservatism or what have you. If you could just help clarify sort of your stance on that?
And then the third one is just a detailed sort of housekeeping question. I can also follow up with that after the call, but I'll ask it now. You appear to have restated the components of the profit bridge in H1 '25. So for North America and Europe, when I look at the profit bridge, so for example, for North America, H1 '25, your net price was reported at the time to be negative EUR 1.2 billion, but the restated number appears to be negative EUR 1.5 billion. I'm just trying to understand what's behind that. I can also follow up with that. Thank you.
Okay. I guess you asked what level of opportunities new CAFE regulation are providing to us, if this is your question, the major opportunity that we will...
No, no. That is my question. Yes.
Yes. So I do understand that before, and I apologize for that. But the main opportunity that this new regulation will provide to us and we will absolutely pursue it is to improve our mix of production and sales, profit optimizing in North America. That means basically U.S., we will sell less PHEV and more ICE. And on the ICE side, we have the advantage to launch now HEMI V-8 engine, and we are setting up our production to produce 100,000 units more in '26 than in '25 of overall V-8 engine, which is obviously very positive in mix. And I hope that this is the answer that you are expecting. Now we'll leave Joao to answer to the rest of your question.
Yes. On the third question on the walk, we didn't restate anything, but there is -- the way that we do the walks for H1, we use the H1 '24 average margins. And then for the H2, we use H2 average margins. And then for the full year, the full year average margins and the same thing for FX. And that's why stacking the walks do not work.
On the warranty, we have provided a detailed schedule on February 6, and we can take offline. But the way that you should think about that is what we have booked on the P&L, which we have detail on H2 that we have classified as AOI, which were related to the shipments in 2026 -- 2025. The only thing that you should exclude there is the EUR 500 million that were related to the H1 and that will give you a good run rate going forward.
Ladies and gentlemen, this was the last question. Let me now hand the call back to Mr. Antonio Filosa for the conclusion.
Very well, and thank you again for joining us today. As we close today's call, I would like just to let you know, this is the last call of our Head of Investor Relationship, Ed. Ed will be leaving us in the coming weeks and before that, we'll be supporting a handover to his successor, [ Charlie Chrisman ] that have been with us for the last 8 years working closely to our CFO, Joao Laranjo. All of us at Stellantis would like to extend our thanks to Ed and for these years of services and wish him the best for his future.
Thank you, everyone, for the time and focus you have put into reviewing our results and listening to our business updates. And we look forward to talking to you regularly throughout that what we expect to be a very productive 2026. Thank you again. See you next time.
Stellantis — Stellantis N.V., H2 2025 Guidance/Update Call, Feb 06, 2026
1. Management Discussion
Hello, and welcome to the Stellantis Preliminary Results H2 2025 call. [Operator Instructions] I now give the floor to Mr. Ed Ditmire, Head of Investor Relations, to begin today's conference. Sir, the floor is yours.
Thank you. Hello, everyone, and thank you for joining us today as we review Stellantis' H2 2025 Preliminary Financial Results. The presentation material for this call along with the related press release were posted under the Investors section of the Stellantis Group website.
Today, our call is hosted by Antonio Filosa, Chief Executive Officer; and Joao Laranjo, Chief Financial Officer. After their prepared remarks, Antonio and Joao will be available to answer questions from analysts.
Before we begin, I want to point out that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement included on Page 2 of the presentation. As customary, the call will be governed by that language.
Now I'll hand over the call to Antonio Filosa, CEO, Stellantis.
Thank you, Ed. Thank you very much, and thank you all for joining us today. What we are presenting today is a decisive reset for our future profitable growth. We are today resetting our organization by empowering our regional teams so that they can accelerate the decision-making process and maximize the rigor of execution.
We are dramatically resetting our stakeholder relationship, improving all of them, including relationship with our employees, with our partners, the dealers, the suppliers, the governments and the unions. We are resetting our product plan and our EV supply chain to reflect much more real customer demand and shifting regulation following an initial overestimation of pace of adoption of electrification in the regions.
We are resetting execution and improving quality management processes to address previous operational issues triggered by past decisions. Those are changes very needed, necessary that we are aggressively implementing. Implementation is all in progress, and they are delivering to us initial signs of recovery already in H2 '25.
So let me talk a little bit about those initial signs of recovery that will deliver positive foundation for '26 and forward. The first bucket of early improvements is execution improvements. We have a new leadership team in place. We have a much leaner organizational structure. We have given power to the regions, enhancing local decision-making processes.
We have recruited more than 2,000 engineers in '25, mainly in North America [indiscernible] and together with them, a lot of field professional, skilled traders for our plants. We have already enhanced quality with 1 month in service KPI, which is improving more than 50% in North America, more than 30% in Europe, this is in '25.
The second bucket of improvement is about our product momentum. We have launched in '25 10 all new products in all regions. We are returning the HEMI V-8 to our Ram 1500 pickup truck, and we will increase HEMI production a lot in 2026.
We are progressing the rollout of smart car lineup in Europe with substantial incremental product offerings such as the Fiat Grande Panda, for instance, [indiscernible]. We have been launching in quarter 4 '25, recovering past delays, many new products, including Jeep Cherokee Hybrid, which is our Jeep fundamental player in the largest individual segment in the world, the Midsized SUV segment in the United States, more than 3 million units sold every year.
We are launching Dodge Charger ICE SIXPACK that together with the Dodge Charger Daytona BEV is Car of the Year for North America recently awarded. We have launched the Fiat 500 Hybrid in Italy. And those launches will all expand our market coverage in '26.
The third bucket of improvement is about our return to growth. We increased our global shipment half 2 '25 versus half 2 '24 by 11% and our North American shipments in the same period by 39%. In Europe, we are retaining our segment leadership in the all-hybrids market, in the B segment and in a very profitable light commercial vehicle market. And in South America and in Middle East and Africa, we are keeping our growth.
The fourth bucket of improvement is our order book, which is very robust. So our order intake in Europe increased by 13% in half 2 '25 when compared to half 2 '24 and 23% only in quarter 4 '25 when compared to the same period of '24. Our order book in North America is up more than 150%, and this is driven by accelerated demand of the new Ram, Jeep and Dodge products.
We have received year-to-date more than 60,000 orders for our 26 model year RAM 1500 HEMI V-8 Engine Powered. And we have sold out our planned production for model year '26 of the recently launched 2-door Dodge Charger SIXPACK Scat Pack.
Through the renewed product strategy, we are addressing many white spaces in the markets where we compete, and this is a very big opportunity for us in '26. So in half 1, '26, we will launch our Ram 1500 TRX. We will launch our all-electric Jeep Recon. We are already launching the new Jeep Grand Wagoneer. We are already launching the new Fiat Grande Panda ICE. All those products will enhance our market coverage for '26.
And also the many launches of half 2 '25 will give us a full benefit in '26 of additional market coverage. This is the case of the 8 launches that we see in the bottom of the slide, including Ram 1500 HEMI V-8; Ram 1500 Express; in South America, the Ram Dakota, our midsized pickup truck over there. As we mentioned before, our Dodge Charger ICE SIXPACK together with the BEV Car of the Year in North America; our Fiat 500 MHEV; our Jeep Cherokee Hybrid, the return of a historic and iconic nameplate in the largest individual segment in the world; in Europe, the Jeep Compass BEV; and in Europe, again, the Citroen C5 Aircross BEV.
And now I leave the word to Joao.
Thank you, Antonio. As part of our 2025 second half results, we are announcing EUR 22 billion worth of charges that are excluded from AOI. We have broken this out for you into 3 categories: EUR 14.7 billion related to product plans. It includes write-offs of canceled products of EUR 2.9 billion and also impairment of certain platforms of EUR 6 billion. This is primarily due to substantially reduced volume and profitability expectations for BEV products.
It also includes approximately EUR 5.8 billion in projected cash payments expected to be paid over the next 4 years. EUR 2.1 billion related to steps taken to resize the EV supply chain. This includes a total of EUR 700 million in cash payments expected to be paid over the next 4 years. EUR 5.4 billion relate to other items. This includes EUR 4.1 billion due to a change in estimate for contractual warranty provisions and EUR 1.3 billion of restructuring and other charges. The vast majority of charges relate to necessary corrective actions have been taken in 2025.
Now let me review the preliminary results for the second half. Revenues rose 10% year-over-year at the preliminary estimate midpoint on 11% higher consolidated shipments. AOI was negative in the range of EUR 1.2 billion to EUR 1.5 billion. Industrial free cash flow was negative in the range of EUR 1.4 billion to EUR 1.6 billion. This represents approximately half of the negative EUR 3 billion in the first half of 2025.
Now let's dive deeper on the AOI topic. We finished below our AOI expectation for the second half of 2025 due to a combination of specific items, which more than offset improvements in other areas.
First, let's go through the items impacting industrial costs. Warranty expense for second half was EUR 700 million higher year-over-year. EUR 500 million of this was triggered by the change in estimate related specifically to vehicles shipped in the first half of 2025. Another EUR 200 million of warranty expense related to the recall of certain now discontinued PHEV models. The company also booked EUR 500 million in compliance fine provisions related to European LCV volumes. This represented the entire 2025 full year accrual booked in the second half. And moving forward, we project this should be about EUR 300 million lower in the first half of 2026.
Lastly, there were also EUR 500 million related to 2 items, a supplier bankruptcy and for costs incurred due to disruption of the aluminum supply chain. Next, 2 items in the Financial Service business had a negative impact of EUR 400 million in the FX and other bucket. The first was due to the residual value impact incurred in the U.S. for the now discontinued PHEV models; and the second was a provision related to an industry-wide motor finance redress program in the U.K.
So in total, there was EUR 2.1 billion of negative impact from the specific items I mentioned. At the same time, core foundational business drivers like volumes, price, industrial efficiency and purchasing costs were all moving in the right direction.
Now let us go over what we expect for the full year 2026 financial guidance. Net revenues are expected to rise by a mid single-digit percentage with the largest contribution from North America. The margin guidance is low single digit with improvement expected comparing the second half to the first half of 2026. And industrial free cash flow are expected to improve year-over-year. Included in this is approximately EUR 2 billion in projected cash payments in 2026, of which approximately EUR 1 billion is expected in the first quarter. We expect a return to positive industrial free cash flow in 2027.
Now let us turn to capital. The message here is that the balance sheet is strong and will remain so. The decision to not pay a dividend this year reflects our net loss. Next, the Board has authorized the company to issue up to EUR 5 billion of hybrid bonds. These actions will contribute to preserving a strong balance sheet and liquidity position, while the company works to return the business to positive industrial free cash flow generation.
The company finished 2025 with industrial available liquidity of approximately EUR 46 billion, representing a ratio of 30% to net revenues, at the top end of our 25% to 30% target range. I want to briefly flag that we are sharing a supplementary slide for you to better understand information on the change in estimate on warranty.
I will now hand you back to Antonio.
Thank you, Joao. So to conclude, I present to you this final slide where, again, I'm presenting a decisive reset to make customer preferences our only guide star for the future of our business plan and for the business of Stellantis. We have a new CEO, we have a new team in place, we have a new approach to the many markets where we are relevant and the new vision that we will be delighted to share with all of you on May 21, '26, in our Investor Day.
Just some highlights about what we said today. Customer is back at the center of our business strategy. We drive our product plan driven by demand rather than command. And we are very delighted by the very positive reception of our dealers and our customers of the new products that we recently presented to the market.
We have a new organization in place. We have empowered regions and our decision-making process will be faster and leaner because closer to customers. We have new expanded range of products, some attacking white spaces where we were not present, some others that represent important return of beloved nameplates in our lineup.
We are improving a lot manufacturing execution. We are improving a lot quality governance and quality processes. Our 1 month in services in North America has improved in '25 by 50%. Our 1 month in services in Europe, as KPI, has improved in '25 by more than 30%. And we are recruiting. We are recruiting engineers, more than 2,000, to support our quality and time to market needed improvement.
A profound reset that put our customer at the center of what we do, it comes with a cost, as Joao has already explained, but a very needed and important one to set us back on the road of business growth.
That is all from my side. And now we will take your questions. Thank you very much.
[Operator Instructions] So the first question is coming from the line of Patrick Hummel from UBS.
2. Question Answer
I would like to start with AOI. Looking at your 2026 guide, low single digit, I guess, translates into 1% to 3% AOI margin. Now the second half of 2025, if I strip out those nonrecurring items that are within the AOI, the clean margin of the second half of last year seems to be around 1%. So basically, you're guiding for a very moderate margin expansion, if I take the midpoint, of just around 100 basis points, and that despite quite strong progress made on the commercial front, and you're guiding the top line up mid-single digits.
So I'm just wondering if you can share a bit more color about the puts and takes why there is so little operating leverage despite a better top line? And if you can also by regions, is it just that Europe or the third engine is worse? Or is it that the recovery path in the U.S. is flatter than what we had in mind?
And my second question is a very, very simple one. Can you just say loud and clear that with the measures announced today for the balance sheet, a rights issue is off the table?
Okay. Patrick, thanks very much for your question. So I'll address the second one first. We are not contemplating any equity raise. So that is not something that we are contemplating. On the AOI, we expect to see a continuous improvement in 2026. And the key drivers for the improvement in AOI throughout 2026 will be volumes as we ramp up the production of the new volumes as we are indicating in our guidance.
We expect mix to be positive in U.S. with a reduction of PHEVs and BEVs and increase of HEMIs. We expect price to be basically flat with positive improvements in U.S., likely some negative price in Europe, given the strong competition. And then we have headwinds on tariffs and raw materials of around EUR 1 billion that we expect to offset with industrial cost efficiencies due to the higher volume and much better operational execution and then there is the nonrecurring specific items. So our guidance incorporates those levers, and we expect to make as much progress as we can throughout 2026.
And complementing what Joao just said, so the pace of our reset, because this is a profound strategic reset, will be driven by new successful product launches that we will execute with very high quality. So the speed of this reset is driven by those launches that requires time, obviously, that we will deliver to the market with high-quality standards.
When it comes to the regions, the major engines of our business growth will be North America, U.S. specifically, where we have a big concentration of new product launches coming to the market and a very high expectation around that. It is important to remind that our order book in North America is up 150% year-over-year, and our market share is growing, especially the U.S. retail market share, which is obviously the most profitable, and this is a very good sign. So those are the major answers to your question, and thank you for that.
The next question comes from Jose Asumendi from JPMorgan.
It's Jose from JPMorgan. Just one question, please. I can clearly see how the white space products or the products coming into white space are going to give you that additional momentum in volumes and earnings. My question is, is there not a need to take more drastic action in Europe, taking down capacity? And simply in other words, can you talk about how the announced measures are going to help improve your industrial footprint, both in Europe and in North America?
Well, thank you very much for this question, and I will answer to that. This profound reset that has been done to put back our customers in all the regions at the center of everything we do as a company, obviously, it comes with a strategy of business growth, that is why we are investing $13 billion in the next 4 years in U.S. with the launches of 5 all-new products and 19 relevant products.
That is why only in 2025, we launched globally more than 10 all-new products, North America, Europe, but also South America and Middle East and Africa. So once we put our real world customer demand at the center of what we do and once we set up for ourselves a foundation through product launches of growth, our main strategy is to grow, is to grow in North America, is to grow in Europe, is to consolidate South America, is to grow in Middle East and Africa and elsewhere.
Then obviously, our business is also a business of efficiency. So we will take a lot of care at industrial efficiency as well. And for what we think on our brand portfolio and our industrial footprint, well, we will share with a lot of pleasure all those considerations in our Investor Day, May 21, 2026. Thank you very much.
The next questions come from Philippe Houchois from Jefferies.
My question is on the perpetual hybrid bond. I'm just trying to understand, considering that how much liquidity you have on the industrial balance sheet, am I right to assume that the driver of that hybrid bond is more to protect the rating rather than add liquidity?
And if I can follow up with that is to what extent that kind of rating or how does -- I guess, you're trying to protect the rating to continue to invest in the [indiscernible] organization in the U.S. And if you can comment on this, if it is the right logic, am I thinking right in the right way? And does your balance sheet in any way constrain your ability to continue building that finco?
And I'm just wondering is, you said up to EUR 5 billion, which suggests you could do less. And how could we think about the cost of that instrument? Currently, Volkswagen pays about 4.5% interest growth on that -- on a similar facility. Is that the kind of cost of funding we should be looking at?
Yes. Thank you. Well, the first thing is obviously the hybrid, it's one more instrument in our toolbox to make sure that our balance sheet continues to be strong, and it's something that we are very focused on, including to make sure that we protect our investment grade, which is very important to us, and we are working very hard as well to improve the operating performance, including to protect the growth of the finco here in the U.S. So all the points that you mentioned relates to the hybrids are the rationales that we are also looking at.
And the cost of the hybrid, right now, it's at historical low. So we think it's a very competitive instrument. And as you said, competition and other large companies, especially in European use those instruments at larger scale. So we think it's a very good instrument to add to our debt portfolio.
The next questions comes from Thomas Besson from Kepler Cheuvreux.
It's Thomas Besson, Kepler Cheuvreux. I'd like to ask you a couple of questions, please, as well. First, when I look at your deck on Page 7, could you please explain us the difference between your operating cash burn at about EUR 2.4 billion and the industrial free cash flow at EUR 1.5 billion? Can you isolate the elements that are related to the bank and other items that can explain why there isn't a greater industrial cash burn?
And the second question is on the EUR 6.5 billion cash portion of the charges that you plan to pay over the next 4 years. Could you confirm that it has been agreed with your suppliers that this payment can be done over 4 years or is it something that you still need to negotiate?
Yes. Thank you for the question. So first on the reconciliation between the operating cash flow and the industrial free cash flow. So the operating cash flow, as shown here, it's IFRS measure and it does not include CapEx, but it includes the operating performance of the finco primarily in U.S. So that operating cash flow, it's a view for the group, and it's basically including operating drivers, not investments or financing, while the industrial free cash flow does not include the finco actives, but includes the investments on the industrial company.
So the walk between the EUR 1.5 billion to the EUR 2.5 billion, there is a CapEx of EUR 4.5 billion and then an operating from the finco of EUR 5.3 billion, and that is the delta that reconciles. And if you'd like, we can provide the details after the call. But that's the difference between the operating cash flow at group level and the industrial free cash flow as we are reporting here.
On the cash payments, the EUR 6.5 billion -- yes, and on the cash payments, we are in negotiation with the suppliers. We have not closed all the negotiations. The negotiations that we have closed so far are aligned with this payment terms condition, including the deal that we have announced today, the EUR 700 million that we stated to be in 4 years, that is exactly the terms of the transaction that we just closed.
The next question comes from the line of Christian Frenes from Goldman Sachs.
Just 3 questions from me. Regarding the provisions that you've announced today, can you just confirm that any risk to your European operations from increased pricing pressure or what have you is sort of captured in these provisions? That's question one.
And question 2 would be just a detail on the EUR 6.5 billion cash out from your restructuring activities. It's clear that EUR 5.8 billion comes from the product realignment and then you have EUR 0.7 billion from the EV supply chain. What about the EUR 1.3 billion from workforce reductions? How much of that is a cash issue?
And then lastly, for finco, for your financial subsidiary, there was already a question on that, but could you just outline the cash investment that the finco will consume in, I guess, both for 2025 and maybe your thoughts on 2026, what we should assume?
Yes. So on the provisions, we have provisioned what we have listed here. Obviously, based on our regular closing process, we take in consideration risks on the residuals and related items, including in the European market. So that is contemplated on our regular closing. But on the provisions, there is nothing exceptional for price in Europe.
On the EUR 6.5 billion or the EUR 1.3 billion of restructuring, as you can see on our financials in '24-'25, we continue to have restructuring actions that is about around EUR 1 billion. So the cash out in 2025 was about EUR 1.3 billion, and we expect a similar amount or slightly less or around EUR 1 billion in 2026. And then the finco, especially for 2026, I'll follow up with you on the full year earnings call.
Okay. And just to be clear, so that's an additional EUR 1 billion then out from restructuring that we should assume?
Yes, but that is -- it is not a headwind versus 2025. It's actually going to be -- the restructuring cash out in 2026 we expect to be slightly lower than 2025. In 2025 was EUR 1.3 billion, and we are expecting about EUR 1 billion in '26.
The next question comes from the line of Stephen Reitman from Bernstein.
Yes. Stephen Reitman from Bernstein in London. My question is about market share in North America -- or rather in the United States, excuse me. Obviously, after the 8.1% you achieved in the fourth quarter, which was obviously heralded as a sign that things are improving from the lower levels you've seen before, we went down to 7.5% in January in the United States.
Now obviously, the weather played a large part in disrupting a large number of the U.S. automakers. What would you feel comfortable with or what would be your expectation for the market share that you should be able to achieve in the United States in 2026? And could you comment on some of the newspaper reports that were coming out last year suggesting that you were looking at more of a volume strategy, you're going to put more emphasis on fleet sales as well in order to grow volume?
Thank you. Thank you for your question. I will take it. So our market share in the U.S. and in North America is overall growing January '25 against January '24, growing in all the segments and the channels that includes U.S. retail, U.S. fleet, Canada and Mexico. It's also growing in January '25 versus December '24, if we consider U.S. retail only. So U.S. retail is growing.
What is not growing is fleet when we compare December with January, and this is because basically seasonality of our production. So we usually plan our plans to ramp up in January and the beginning of February and then go full production starting from second half of February and going forward. And obviously, on that, we limit our supply of fleet volumes.
In quarter 4, we grew, as you saw, and U.S. retail is still growing in January. So our market share in '26 will grow. In those numbers, neither in quarter 4 numbers nor in January, there is a significant impact of the new products, that will become significant starting from March. I just want to remember that the new products are the Jeep Cherokee produced in Mexico, so there is a lead time to get to the U.S. retail stores to our dealer network, that will start showing up in March and also a new product, which is Dodge Charger that is producing in Canada, this will start to show up in our dealer lots starting from second half of February.
But again, our firm trust is that the new products and the additional performance in U.S. retail and fleet will lead us growing the market share in U.S. and in North America. Thank you very much.
The next question comes from the line of Tom Narayan from RBC.
Tom Narayan, RBC. First question on brands. I didn't see any commentary on brand rationalization. It seems like the idea is to keep all the brands intact that you have. And just a follow-up on that. Jeep Cherokee, you mentioned the market for that in the U.S., 3 million cars. We haven't really seen much volumes yet on that. Just curious if maybe there's some supply issues related there or strategy there? And then if I could just squeeze in an accounting item. Given the charges today, can we expect an improvement on D&A for 2026?
Okay. Thank you for your question. I will take the first answers, and then I will leave Joao to the charges answer.
So Jeep Cherokee has been launched in production in December last year, thus recovering a past delay from the past years and it's coming now to the dealer lots by March. Again, the production site of Jeep Cherokee is Toluca in Mexico. So there is a logistic lead time to get to our U.S. dealer network. You will see Jeep Cherokee starting being visible in the dealer lot in March, starting to accelerate deliveries of this fantastic car to our consumers starting from March. This is the major lever of our market share growth and recovery.
On the charges, Joao?
Yes. On the depreciation, we expect to see a benefit of about EUR 250 million of lower depreciation, amortization versus 2025, driven by the adjustments that we are announcing today.
Okay. And then on the brand, you're okay with all the brands?
Yes. So brand portfolio is something that we are working a lot on top of it. We are very proud of our brands. They represent iconic brands for our consumers. If you imagine there is no more iconic brand in U.S. than Jeep, Ram, Dodge Chrysler, and we have many, many iconic brands in Europe such as Fiat, Peugeot, Citroen, Opel, Alfa Romeo and the others. Obviously, we have an Investor Day already scheduled for May 21 this year, we will be more than delighted to share with you all the important consideration that we have for our business plan around our brand portfolio for our future. Thank you very much.
The next question comes from the line of Martino De Ambroggi from Equita.
On free cash flow, my focus on. In 2026, it will be probably negative excluding -- well, including the EUR 2 billion cash out related to extraordinary charges. If we exclude the extraordinary charges, could be positive? And follow-up on the free cash flow, what are the main components in terms of CapEx, net working capital and your assumptions?
Okay. Thank you. Well, on investments, first, I'll address the second part of your question. So thinking about the 2026 free cash flow, we expect investment to be very similar to 2025 and we also expect working capital to have a similar performance despite the EUR 2 billion payments because of higher volumes and also more efficiency on inventories and then some tariff credits that we are going to collect in 2026.
So to your question about the results of free cash flow in 2026 will be primarily correlated or very close correlated to the improvement in AOI. And on the AOI, at the beginning of the call, I provided the key drivers for the improvement in 2026. So we expect all the improvements that we see in AOI in '26 versus '25 should flow through the cash flow.
Okay. But excluding the EUR 2 billion extraordinary cash out could be positive?
It will depend on the improvement of the AOI in 2026.
The question comes from the line of Michael Foundoukidis from ODDO BHF.
Two questions on my side remaining. So Joao, earlier, you mentioned the very intense competitive environment in Europe. Yet at the same time, you highlighted that order intake improved meaningfully in H2, which should be reassuring. However, as recently as last week, we also heard from European teams at Stellantis that they intend to adopt a much more aggressive pricing strategy to regain lost market share.
So could you help us reconcile these 2 points and indicate whether you believe that Europe can realistically return to profitability at some point in 2026 or whether 2027 is a more plausible time line?
And maybe second one, very quick. Could you tell us if you expect to be back in positive territory at the AOI level already from Q1 as you will report quarterly earnings from now on?
Okay. So first on the second question, we expect to be profitable at Grupo level throughout 2026. As I mentioned before, we are seeing a lot of competitive pressure in Europe. So in our forecast for 2026, we expect some headwind on pricing in Europe. We're not going to comment today a specific forecast by region. But as you mentioned, we see a lot of positive momentum as we start the year with the market share in Europe.
Antonio, do you want to comment?
No, just reassuring that we will be profitable as a group throughout all 2026. This is exactly what we will do this year.
The next question comes from the line of Horst Schneider from Bank of America.
My question on Europe has just been asked, so therefore, I just have got one large question left. I'm not sure if you want to debate that also at the Capital Markets Day in May. But Antonio, from your perspective, what are now -- are there still any synergies left between Europe and North America? So put it in a different way, is there maybe a debate at some point if Stellantis should break up so that there should be Stellantis North America where the profit pool is the highest, where you have got now, where you can do as many ICE engines as you want. And in the rest of the world, you still have got more EV regulation, maybe that entity should stay together. What do you think about this way of thought?
Thank you for that question. So there is no doubt that Stellantis make a lot of sense being a very strong global company, proud to have a very strong regional roots. So globally, all the region will enjoy of a global development of global platform, of global architecture, electric electronic architecture, global modules and global powertrain. And we will do that globally by interacting globally with global suppliers.
What stays regional and local is the go-to-market, right? So what we have done in our organization by regionalizing it is to have those global assets developed globally with global partners and making sure that at a regional level, leaner regional teams are able to address specific consumer demand and specific geographical regulation in the proper way. This is how we want to leverage our global synergies that are mainly technical and of supplier base with our regional go-to-market tactics. Thank you very much.
As a follow-up then, maybe, since you just restructure largely Europe, I'm not sure, is there other plant closures in Europe on the agenda? And why you don't restructure also North America? Because if I get it right, there is also a larger amount of overcapacity.
Well, this strategic reset comes with a strategy of business growth, that is why we are investing. We are investing $13 billion in our U.S. brands in the next 4 years for Jeep, Ram, Dodge and Chrysler and for all our U.S. plants. And we are investing in Europe by launching many of the 10 all-new products that we launched, for instance, in H2. Then, of course, our business is a business of efficiency as well. And we will take a very close care to industrial efficiency as well. And for all of that and for all the consideration that we might have, I suggest you to join us in our Investor Day, May 21, 2026.
The next question comes from the line of Henning Cosman from Barclays.
I wonder if we could talk a bit about the H2 performance by region? Is it possible to indicate a bit if you did achieve profitability in North America? I think that's something that was contemplated by the previous management. I believe your team, your current team, hasn't entertained that anymore. But I think it's quite important to understand as a starting point to extrapolate from. To your point, Antonio, the shipments were already up almost 40%, mix was improved, albeit not with the run rate perhaps of the HEMIs that we are going to see, but it was pretty strong.
So I'd be really interested to hear even if just directionally if that made it into the positive territory? And going forward, the white space product, the most 2 important ones, the Cherokee and the Charger, of course, coming from Mexico and Canada, which currently still have the very large tariff, so if you could perhaps speak about the unit margins of these products or the unit economics considering these tariffs and if that's perhaps the reason that the profitability increase or the margin accretion despite the revenue increase is perhaps a bit more modest, that would be great?
Okay. I will take some part of these questions, and thank you for that, and then I will leave Joao answering on the regional view and the other aspect of the same question.
So what is happening in '26 is that we are delivering to our execution, very strong foundation to grow. And I'll tell you some numbers, just reminding all of that. Our shipments are already growing 11% H2 '25 versus H2 '24. Our order book in North America, as you mentioned, grew 150% year-over-year. And our market share is growing, including in January against January last year in all channels, including January against December last year in U.S. retail, which is the most profitable one.
The new products that will make us accelerating growing are many. Some of them are produced out of U.S., so they pay tariffs. This is Jeep Cherokee case and also the Dodge Charger case. But we have strong mix adjustments and also we have strong cost efficiencies that we are implementing to have profitability out of those.
Others, mainly in the numbers, are the ones that are produced in U.S. So we are launching Jeep Grand Wagoneer, which is very profitable to us out of our Michigan plant in Warren. We are increasing a lot Ram 1500 HEMI production. In '26, we estimate close to 100,000 units produced and sold more, and this is a big profit to us. So we have a very important mix lever to activate to accelerate our profitability growth.
And then on the regional view, please, Joao.
Yes. And Henning, I appreciate very much your question. And obviously, it's an important point, but we are planning to talk about the regional results on our call in February '26, so if we can wait by then to provide you all the necessary informations and key drivers by region, we would appreciate. So thank you.
The next question comes from the line of Stuart Pearson from Oxcap Analytics.
A couple of quick ones to finish up. On the warranty side, obviously, one of the big buckets of provisions that you've booked. But the spending hasn't really gone up that much year-on-year, I think EUR 6.2 billion up to EUR 6.4 billion. And I think the provisions you put through for '25 itself were around EUR 7.6 billion, so around EUR 1.2 billion ahead.
So I mean, what are you seeing on that rate of warranty cash going out of the door in the last quarter-or-so? Is that starting to stabilize? Are you expecting that to carry on increasing in 2026 and into '27? I just wonder whether that gap between what you're provisioning and what's going out the door has some space to narrow because you seem to have provisioned quite a lot for that and your balance sheet provision looks similar to [indiscernible] now.
And I have a quick question just on the capacity side. A few people have already touched on that. I just wondered, other than closing the other options, we're seeing the Chinese OEMs that reported looking to partner with incumbents and obviously, Geely and Ford one speculated route there. I mean what are your thoughts on those kind of partnerships, the pros and cons of that? Obviously, you have the international JV of Leapmotor. Could you expand that structure a little bit? Is it impossible in any region, not just Europe, that we see you do something more in terms of where plants sit within your different, I guess, legal entities when we get to the CMD?
Okay. Thank you for your question. I will answer a couple of aspects of your question, and then I will leave Joao talking about the warranty spend. So before talking of warranty spend, which is very important, I want to talk on product quality. We have refocused our industrial team in improving our product quality dramatically, and we are achieving that. We have recruited more than 2,000 engineers, mainly in North America to support both quality improvements and time-to-market improvements, and this is working.
The early indicators of quality in our business is the 1 month in service. In 2025, since we started this new level of execution, we improved 1 month in services on our product by more than 50% in North America, by more than 30% in Europe. So quality is improving and will improve further. And then the spend, I will leave in a moment to Joao.
On the capacity question that you just asked. Well, we read the declaration of Ford CEO on proposal of capacity sharing with Geely. Actually, we were pioneering that because with our partner, Leapmotor, through Leapmotor International and through our network of distribution in Europe, in South America and in Middle East and Africa, we're already selling their cars. And we are already planning capacity sharing with Leapmotor in Europe and in South America, as we announced already. So we are already on that path.
I believe that this path will benefit them and us, them to localize production, us to share supplier basis, to share capacity, to accelerate in some technological step-up. And on the warranty spend, I will leave Joao the answer.
Yes. Thanks, Antonio. So on warranty, as you know, '24 and '25 were basically flat, albeit at high levels. We don't expect warranty spend in 2026 to increase versus 2025 levels. As Antonio mentioned during his prepared remarks, we are starting to see improvements in warranty, both in North America and Europe. So eventually, we expect to see benefits also on the warranty spend. But for sure in '26, we don't expect warranty spend to be a headwind versus '25. Thank you.
The next question comes from the line of Emmanuel Rosner from Wolfe Research.
I have a couple of questions on the cadence, if I may. So you're signaling an improvement in first half margin, but then the second half better than first half and then 2027 better again and then same thing for free cash flow. Besides for maybe the volume or market share trends from ramping up some of the new products, are there any other puts and takes that we should consider that will make the second half better than the first half and then further improvement in '27?
Well, no, thank you very much for this question. I will take it. Yes, as you mentioned, we see a very big improvement in volumes, driven by new products, but also in mix. So one of the largest volume improvement will happen in the space of Ram pickup truck, V-8 HEMI Engine-Powered, where we are planning to produce and sell 100,000 units more in 2026 versus 2025, and this is obviously a big profit maker for us.
The other and third lever of profit enhancement that we see for '26 and forward is to improve industrial execution that will mean to us to improve quality output, as we said. They are already improving and we'll keep improving them in many war room that we started in all the regions, in all our organization by improving cost that we are working a lot with our engineering, we recruited more than 2,000 only in 2025, with our suppliers that we are engaging in many and several supplier tables to technically work on components, system and subsystems. So volume, mix, cost and industrial execution will be the major levers to enhance our profit for '26 and forward. Thank you very much.
And then a quick follow-up on cadence as well, and apologies if I missed it, but in terms of the cash out for some of these realignments, you said, I think it will be over 4 years. Are you able to give us some sense of cadence of how much of it is in which year or specifically, how much of it is in '26? And again, apologies if I missed that.
Yes. So of the total EUR 6.5 billion, we expect about EUR 2 billion to be paid in 2026 and of that EUR 2 billion, EUR 1 billion to actually be paid in Q1 '26, as we close negotiations. So that is the cadence. So in '27, '28, '29, it will be evenly spread. But in 2026, we expect to pay EUR 2 billion out of the EUR 6.5 billion.
Ladies and gentlemen, this was the last question for today. Let me now hand the call back to Mr. Antonio Filosa for the conclusion.
Well, thank you very much. Again, thank you for joining us in this important moment. What we announced today is a profound strategic reset for our company, one that will put back our customers real needs at the center of everything we do. We are very optimistic for 2026 and for the future. Please, I will have all you back, hopefully, in our Investor Day, May 21, 2026. Thanks again. See you later. Bye-bye.
Stellantis — Goldman Sachs Industrials & Autos Week
1. Question Answer
A little bit from me and then I'll open it up to the audience.
But maybe we could start with North America, no surprise, probably. We've seen some positive signs, improving share, stable pricing post 2024 adjustments. How sustainable are the trends that you're seeing currently in the North American market?
Very well. Well, I believe that is very sustainable. I believe that because I have already some proof points of what I'm seeing. And I see all the conditions in the market internally and externally to promote this sustainability. So let me give you some numbers. So half 1 U.S. only, Stellantis market share was at 7%. Quarter 3, we went to 8% more or less. We stayed in around 8%. And now we are launching new products. The new products that we are launching or some of them we have already launched, by the way, they have been already immediate strong and positive acceptance reaction from the markets, right?
So for instance, in quarter 3, we presented the return of Ram Hemi V-8 engine. This is a legendary engine that we did phase out in the past. In less than 12 months, it's a record time, we returned the engine to the pickup trucks, and we launched in quarter 3 the pickup trucks with this engine. First day of announcement, we received 10,000 orders, 6 weeks after those orders went up to 50,000 and growing, right? So huge acceptance. By the way, in quarter 3, just last week, we shipped already and we delivered to customers 10,000 of the V-8 equipped engine Ram. In quarter 4, we mean to increase from 10,000 to 20,000 and then grow from that. So we had 7%, now we're 8%, and we are shipping a bit. Now this month, at the end of this month, we are launching Jeep Cherokee, right? Jeep Cherokee is a very credible name plate, it is the car that invented the midsize SUV segment that by chance, it became the largest individual segment in the world, right?
This segment in the U.S. makes 3.2 million, 3.3 million units per year. This is in 1 segment having a full U.K., a full Spain industry, right? And we invented through Jeep Cherokee this segment. We decided a few years ago to phase out the product, but now we are relaunching. And by the way, we are relaunching a much improved product versus last generation. For instance, last generation Jeep Cherokee that sold a lot received some complaint of customer around the fuel economy. The new Cherokee is hybrid. So fuel economy is just good, right? The average American family we spend $100 per month to drive their Jeep Cherokee, so great fuel economy. Internal space, this Jeep Cherokee will be built on top of our biggest platform, STLA Large, so a lot of space internally. Trunk volume, the trunk volume of these Jeep Cherokee just best-in-class in the industry and Jeep capabilities.
So we are getting back to the largest individual segment in the world, that being reinvented with a much improved Jeep Cherokee. So obviously, we will have volumes opportunity there. The muscle cars. So the muscle cars are coming back with ICE engines in U.S. that was all what Dodge community was expecting. Now they have it. We presented the car, huge interest. So this will be a sequence of product launches that will make this volume growth, as you were asking, highly sustainable and progressively better quarter-by-quarter.
So it sounds like a tremendous amount of momentum in North America in the second half, volumes, mix, price. Are you -- can you comment a little bit on the profitability expectations for the second half?
Well, well, I will not comment because we will have to close the year and we will have those information properly shared by the end of the year when we close the year. We already said something in Q3, right? Through the end of November, we are on track on our guidance. But obviously, I'm cautious by nature also as an engineer. So the job is done when it is done, right? So let's wait the end of the year.
Okay. So you're making incremental progress. Stellantis is taking corrective actions. What kind of business decisions and strategic shifts are driving these actions, sort of product planning and?
Yes. I believe that many, right, because we realize that we have obviously many opportunities. We need to be fast and rigorous the way we explore them. So -- but we can talk a lot about product, if you want, and product planning and what we have learned, right? So what we have learned is that some assumption of the past strategy resulted to be wrong, right? So we were thinking of a battery electric vehicle penetration in U.S. up to 50% by 2030. Last month was less than 6%. It will say 6% or 7% a few years, right? We are planning to have a BEV penetration in Europe at 100% by 2030. It will be, for sure, higher than U.S., but not at that level, we believe. So we understood that was needed to change strategy around those assumptions, number one. The other thing that we learned was on ourselves, right, by listening more to our customer, we discover what they really wanted from us, right? For instance, the return of the Hemi V-8 engine is exactly the results of listening to them and understanding that they badly wanted that engine back in our cars, right? And this is what we are doing. So by mixing what we keep discovering about ourselves and our customer base and the change of strategy that we are implementing, I believe that we have a good recipe to do what you said, which is incremental improvement quarter-by-quarter on all KPIs, including profitability.
And the execution is also sort of seems to have improved and that's in addition...
Yes, so execution is improving. You see that the product launches now are much more on time, right? So we promised by the end of the year, Jeep Cherokee is coming in this month. We promised in quarter 3, the V-8, it came in record time. We promised by quarter 4, the new Dodge Charger with ICE engine, we presented it -- we launched it in production last week. So we are getting sharper and more rigorous in execution on product launches, we have a lot to improve, and we will do that heads down, working rigorously day by day. But I believe that we have a clear part on how to move forward.
Excellent. So there's some anticipation, I think, amongst investors for the EU's December 10 announcements, the regulatory, the industry, I think, has been lobbying fairly hard. Do you have any personal sort of expectations? Or what do you expect to happen? What's the impact -- the potential impact for Stellantis?
No, that's interesting. That's a very interesting question. It comes in a very special moment for me because yesterday I was at White House talking about CAFE standards with -- a new regulation on CAFE standards with President Trump and President Trump administration, together with other competitors we see how different is the approach to CO2 emission in U.S. and Europe. There is not a perfect recipe, but we see a lot of differences. So what we believe is going to be in Europe. So first of all, we appreciated a lot, the recent messages delivered by very important European political leaders to the commission, right? So we saw recently Chancellor Merz's letter, right?
We heard -- I personally heard when I was in Turin on the 25th of November for the launch of Fiat Cinquecento hybrid, the words and the messages delivered by Minister Urso. And I believe 2 days ago, we also heard to the French government message around local content. All of them are creating a new story, I believe, and a new opportunity to rethink together about regulation in Europe, right? So what I believe should be the real equation to solve, an equation made by 3 elements, right? #1 element, for sure, environmental protection, decarbonization. The second element is job preservation and the third element is obviously market affordability and affordability for customers, right?
So if we put those 3 elements in the equation, what would be the perfect recipe, actually not Stellants, but ACEA already provided to the European Commission, what we all collectively believe shared that is the good recipe for product in the new regulation. It is an easy one, at least the way it has been written. It's made by 4 elements. Element #1 is to recognize that light commercial vehicle industry and passenger cars industry, they share a lot in common, but they are very different from a customer perspective. So the light commercial vehicle, a typical customer, the small or midsize entrepreneur we decide to buy a new 1 or to keep the old 1 by controlling TCO, total cost of ownership, right?
And it's no secret has been demonstrated that currently total cost of ownership of a battery electric vehicle vans is higher than other motor propulsion, unless you do a very long -- very high volume of mileages, right? So that is why the target set for light commercial vehicle industry on CO2 emission needs to be changed because they don't refer the reality. They are not attainable, right, number one. And then we have passenger cars, right? And on passenger cars, I believe that what ACEA called flexibility that has been proposed are very good to be adopted. So number 1 is technological neutrality, right? So there are many options. Biofuel, for instance, why not? I believe that there is a bright future for biofuel in the future.
The second flexibility is, for sure, smartcard super credit which is ACEA recognizing that a small car, whatever motor propulsion always will pollute less in terms of fuel emission than a bigger car just because of the mass, the weight, right? Finally, car park renewal. So in Europe, we have a car park of 256 million units per year, 150 million of those vehicles are 10 years old or older. So obviously, if you create a mechanism to have the average consumer enjoying a benefit to trade in an old car in the new car that will be good for environment, will be good for job preservation. Obviously, will be more accessible, et cetera, et cetera. So the equation is this one, the 3 elements that I mentioned meaning the job preservation, the protection of the environment and the market affordability. And finally, this needs to be planned in the new regulation that will aim, in my opinion, ideally, to a milder energy transition than the 1 current. So let's see for December 10, what happens then.
Excellent. Thank you for the comprehensive answer. I'll ask 2 more questions.
Pretty long one.
No, it's good. It's really good. But I'll ask 2 more questions and then open it up to the audience. The U.S. tariffs, obviously, a topical point, especially with the Cherokee and the Dodge Charger. So when we think about 2026 and mitigation factors or even maybe that's an unfair question maybe a bit longer term as well. But just mitigation factors in general. Can you frame that for us a little bit in terms of measures you can take?
There are many short-, mid-, and long-term mitigation factors that we can deploy. Number one, we see month after month a much clearer scenario on U.S. tariffs, and they are getting milder. I believe now they are stable, right? So what we have as a mitigation factor, right? So obviously, we will work on cost a lot on the below material on the transformation cost. So we will make efficiencies around those 2 elements. And in mid and long term, we are reshoring production, right? So for instance, the Jeep Cherokee will go very soon to Illinois, right, in 2027, 2028, we will have 2 jeeps out of Illinois plant, Belvidere plant, thus they will not be tariffs, or very minimal tariffs, right? And this is the other thing, right?
On the other side, while we see tariffs that are getting stable and even milder and for those, we can work on cost that we can work on reshoring production, we'll see regulations that is getting much more market friendly, much more. So yesterday I was at White House and President Trump announced the new CAFE standards that up to, I believe, 2031, they will stay and they will be realigned to real market demand, right? And it's a great opportunity for volumes and for mix because there is no secret that the highest mix you have on ICE motor propulsion, especially when ICE means V-8 in our case, or GME-T6 another strong engine that we have, the best mileage you have out of your car. So there is a big mix improvement and volume improvement opportunity there. So there are many things on mix, as we said, on volumes growing, as we said as well on cost and on reshoring that can blend together to mitigate maybe to offset those impacts.
Excellent. My last question. A little hypothetical. But if we were to have you at -- if you were to attend this conference in a year's time, what would have changed about Stellantis?
A year's time?
Yes.
Hopefully not the CEO.
Hopefully not, but what would the changes be?
If I would have the privilege to be with you in 1 year, hopefully, that will be the case. It's a nice question. So I believe 3 things now that I think a little bit about it. One is we already are doing good things. We need to stay good in that. So we have fixed the dealer inventory management issue that was so bad last year. And that has been fixed and we need to stay there. As you said, we increased rigor of product launches. So if we were able to fix for those product launches, we need to stay good for the ones to come. So what we are doing is already better. We need to go or even better, but stay there, right? Then we started a lot of stuff, right?
We started this product expansion for Ram, for Jeep. Those are the most profitable brands that we have in our company. And we need to complete it, right? What we are doing on Ram, for instance, which is the most profitable brand that we have, it's just amazing, right? So we said about V-8 engine, we will launch a range of standard motor propulsion for a pickup truck that will put us as the most innovative pickup brand in North America because nobody else. They will come, but we will start before the rest. We are launching, as we announced it already out of a U.S. plant in Ohio, Toledo, a midsize pickup truck for Ram. This is a space where Ram does not participate, right? With all the brand equity that brand Ram carries, I believe we have a lot of reason to believe that we'll be successful also with the midsize pickup truck that we will launch in Toledo, Ohio, by the way, beautiful truck already.
We will have a large SUV for Ram, which the market is expecting very badly, and we will have it. That will be built in Michigan as well. So what we are doing on Ram, really we are turning Ram as the most exciting pickup truck brand in the world, and you will see many things happening on Ram, but also on Jeep. So what we started there the second thing. I want to tell you that we are on track with this product expansion. And then by the middle of next year, the third thing is in H1, we will have Capital Market Day. So we will present into this community to all the other colleagues, our vision of future of Stellantis, that will be our strategic framework that we might discuss in 1 year. So those are the 3 things that I would be privileged to share with you next time that we meet.
Thank you very much for that answer. Let's open it up to the room a little bit, Jolyon maybe to kick it off and then right in front.
It's Jolyon Wellington from Centiva. Question, as you execute on your turnaround strategy, you are still in the process of consuming cash. I'm just wondering if you can give any comments around how you see the balance sheet? And then as a follow-up to that, you are -- your earnings will be negative this year because of the restructuring charges and your low margins. Would you rule out shareholder returns as per your dividend policy at this point?
There are parts of this question that I cannot answer now. Obviously, we -- not because I don't have the information, but because we will answer by when we close the year. But obviously, we need to get back to cash generation for sure. What we will do is we will improve all business KPI quarter-by-quarter gradually but progressively. So you will see that. And for the dividends, well, we will have a Board of Director to be scheduled on that where as every year, we will decide what to do.
Just a quick follow-up because we are investors, we care about numbers. For the free cash flow, we generate in North America is a very important part of the puzzle. If we think about it, the volumes in the second half have been very good, and we have seen a lot of progress on the market share, pricing, I think the comment was roughly 4%. And you can now optimize for mix as well. I think tariffs are also stabilizing or have gotten better. So is there a reason we shouldn't assume some profit in the second half? Or there is any other part that you think still needs time for fixing and how you think about what is the missing piece of the puzzle as the top line components look in entirety?
I believe that we are on a good start, right, in this half. Obviously, we need to consider that last year, we closed with a negative cash generation of, I believe, EUR 6.6 billion. First half, our negative cash flow generation was higher than EUR 3 billion. So we need to do, as I said, quarter by quarter, and we will get there, right? We need time, obviously and we need volumes coming from the right products, which is happening already as first step, we need to keep going on that ratio.
Antonio, thanks for coming here in person, especially given that you were with the President in the White House last night. So question is the opportunity in terms of mix in the U.S. for next year, given the meeting that you attended last night, I think most of the Detroit 3 CEOs are quite excited by this opportunity. So how much were you constrained by emission regulations over the last maybe couple of years? And how does that switch over in '26 and '27. And it's good to talk about V-8s, but there must be some capacity limitation in your engine manufacturing plants as well. So I guess the question is, help us maybe quantify or give us more context in terms of...
I will give you context.
Of how you can capture this opportunity. And as a follow-up to that is what happens to the investments you've made in plug-in hybrids or in hybrids? Are you still planning on selling them? Or is now sort of more of a demand pull situation on all that?
That's a good question. And I will give you a context, right, about those, right? So first of all, mix. So in U.S. and North America, mix opportunities given by the decision of yesterday are just huge, right? The good thing is that we have anticipated a little bit that, right? Because we launched it again, V-8 quarter 3. That is before the final decision on CAFE regulation, right? Because we are seeing that happening, and we got in time, right? That's good, right? And on capacity availability for V-8 out of Saltillo engine, which is an engine plant that we have in North America. Well, we were able to restart the engine, put the engine into the pickup one version in 10 months and restart capacity. So we have been demonstrated that we have been very fast by acting on that, that 10 months ago, we were seeing as a huge business opportunity, and it became real now in terms of mix.
So yes, this is a leader that we intend to pull very hard next year and years to come because not only through V-8, in general, through ICE, we see huge mix opportunity in North America, just not because it's a profit calculation, but it's also a volume opportunity since it's what customers want there, right? Much more than anything else, right? This is number one. And then the second part of your question was about what?
Hybrids. The ICE opportunity, if you could give us a bit more color on.
So we have -- I will give you many details if you want, but starting from V-8, we have 3 possible V-8s to launch in our cars. And we have 3 brands that could offer nameplates for those V-8s because we can put V-8 in Jeep, we did already. We can put the V-8s in Ram. We did it already. We can put the V-8s in Dodge, right? For instance, the muscle cars, they love V-8 and we are thinking to do that, right? And we can put 3 V-8 because we can have a 5.7 engine, V-8, which Hemi that we did. And then we can do the 6.2 and the 6.4. So actually, volume opportunities are very big if you combine all those stuff, right? And the capacity at the plant, that plant was doing around 20,000 sometimes per year, V-8s. So we really have capacity to leverage once we develop each one of the nameplates. And that will come in a sequence, right? So the opportunity is very big on V-8, but not all. We have GME-T6, which is another ICE engine, right, that we have on the Grand Wagooneer of Jeep, we have on the Ram pickups and we have on the Dodge muscle car now as well.
So really a lot of capacity, a lot of opportunity, we've enough capacity installed, obviously, the phasing of each nameplate requires time to be developed, but we have been fast already for the first part. So this is one. And then hybrids and plug-in hybrids, different story. The segment of the U.S. market that fastest growth in the latest year has been hybrid. So we are launching hybrd because we truly believe that hybrid is going to be one of the favorite powertrain in U.S. Jeep Cherokee is the first hybrid of jeep in North America, right? So we really believe in that technology, we want to expand this technology for other applications. Plug-in hybrid is a little bit different. We are leader in plug-in hybrid market, which is good, but we don't see the same growth than in hybrid. So we will focus more on hybrid than plug-in hybrid.
I just want to get your quick thoughts on Stellantis Europe. You've got the investment with Leapmotor. You've got some unique opportunity there. We know the Chinese are now at 7% market share in Europe. Can you just kind of give your quick kind of 2-, 3-year view of that market opportunity for you? What's reasonable? And then also, obviously, the margin competitive dynamics. I mean it's against the contrast of Volkswagen, you just made the comment this morning that their market share has actually been stable. They've been actually not losing share, the Chinese. So I just want to kind of get your quick thoughts on Europe.
No, that's an interesting question as well. So both in U.S. and Europe, we lost market share in the latest 5 years, right? Actually, in Europe, we lost even more percentage points than the U.S. U.S. was a story of market coverage. That's why product planning. And Europe was also a story of market coverage, but also on execution that we need to improve. So in Europe, what weapons will have to recover market share. You mentioned Leapmotor, this is the fourth, but I will tell you the other. So we are strong in 8 segments historically in Europe, we just launched Fiat Cinquecento mild hybrid, right? This is a huge launch for Italy because Fiat Cinquecento obviously is massive in Italy, but we are offering Fiat Cinquecento only as a battery electric vehicle. And the demand in Italy is not that big for battery electric vehicle yet. So mild hybrid, not a lot of pent-up demand that we will see volumes coming from there.
The other segment that we are very strong in Europe is B segment, right? And we have a very competitive platform, Smart car, the most competitive platform that Stellantis has in the world. And on top of the Smart car, we are ramping up the volumes of Open Frontera, Fiat Grande Panda, Citroen C3 and e-C3. So we will see volume coming out of this platform. C segment. C segment, we have not been very strong in the past as Volkswagen. You mentioned Volkswagen before, Volkswagen is very strong in that segment. Well, we have STLA medium which is a platform that represents to us a very nice synergy with North America as well. And we are launching a very decent number of products on STLA medium, for instance, Jeep Compass that we will start production in the next months, right? So these are another one. And Leap model. So Leap model, we started as a commercial experience and partnership in Europe, but not only in South America as well in Middle East and Africa as well, is going very well.
By partnering with Leapmotor, we understood how good is their competitiveness so we want to learn and partner more on that to bring part of this competitiveness also in our products. So we have a margin positive effect out of that. And we also want to do more with the Leap models starting from Europe. This is the fourth one. So those are the 4 things that internally we will move to make our market share going up. Then there is the industry and the volumes. In industry Europe has been shrinking a lot. Pre-COVID was 19 million units. Now it's 16 million units so lost 3 million units. And in our vision, but not only in our vision, the major root cause for the shrinking has been regulation, right? So that's why ACEA together is proposing this agenda of rebalancing the 3 elements of the equation to make sure that the industry goes up again. That's all.
Any other questions. I can continue. A couple more minutes we have. There's question over there.
Just curious about your thoughts on the number of brands that you have. So what's the framework that you have to assess whether you need to streamline or not?
It's a very interesting question. And again, Capital Market will be the perfect meeting altogether to talk about that. But it's a small anticipation on that. Every brand has a story and every brand has a specific super power in our already, right? Look at Ram, for instance, right? We talk a lot about Ram, but it's good to elaborate a little bit more. Well, Ram has many super power. One is brand equity. The other one is profitably, which is very high. The third superpower that Ram has is very large local, meaning North America and global, meaning outside of North America volume opportunity with high profit. Where we see this volume opportunities? Well, geographically, we already demonstrated that Ram is very strong in U.S., obviously, Canada, Mexico, Brazil. We have a plant that produce Ram there. Argentina, we launched a midsize pickup truck in Argentina plant as well recently. And we believe there are other geographies where Ram can grow in volume and profitability for the future.
Then product line, we talk about the midsize pickup truck. This is the territory where Toyota Tacoma sells a lot of vehicles. And we want to be part of that story, right? A successful part. We talk about the implementation of our ranger standard. Why ranger standard is important for a pickup truck because it delivers to the customer everything that specific customer wants. This customer wants best-in-class horsepower, it is there. Best-in-class torque, is there. Best-in-class towing capability, is there. Best-in-class payload, is there. Huge fuel economy opportunity, ranger standard is there. [indiscernible] because this customer travels in, I don't know, the Midwest states in U.S. where charging infrastructure still is not at the level of California, for instance, right? So every brand has a super power. This brand specific has a lot of superpowers. And obviously, we want to explore all of them. Then you have Jeep, other super power. And then we know why we are so intense 1, 2 or 3 brands where we see a lot of potential, [indiscernible] as well, then we need to balance actually to understand how to fund that thoughtfully, right? And then this would be probably what we discuss in the Capital Market Day as well.
Perfect. We have time for 1 more question. .
About superpowers.
Maybe Abbas again.
I think in -- so the story in the U.S., very clear, mix driven product ramp coming, Europe again products and there's a degree of protection from Chinese competition. But in sort of LatAm and a lot of your very profitable Middle Eastern and African markets, how do you assess the Chinese competitive threat? And what's the plan to sort of deal with that threat? Because they're kind of blocked from the U.S. perhaps we learned from Europe that some more walls will go up in Europe as well. So what's the Stellantis plan to address it in sort of places like Turkey, North Africa, where I guess you're very profitable, LatAm, et cetera?
However, this is what we call not properly thrid engine, right, which what we call third engine is a strange way to talk about South America and Middle East and Africa. But they are very, very distinct, also for Stellantis right? So what we understand in South America, we have a very dominant position there that we built over the latest decade, I must say, and we need to consolidate that position. right? Obviously, Chinese are coming very strong. They are coming to Brazil. Now import duties will be raised to 35%. So it will be a little bit harder to come. They are coming in Argentina. They are coming in Chile since forever. So they are coming. We are learning more about that, but we have this dominant position, made out strong localization that we can explore. And by the way, in Brazil, but not only in Brazil, we will launch Leap model, right?
So our Chinese offer that has been presented is the latest Sao Paulo Auto Show 2 weeks ago, it was just a big success, right? So this is 1 story. The other store is Middle East and Africa, here is even more interesting because I'm very familiar with South America, been living there for 18 years, right? I'm not familiar with Middle East and Africa, but I'm getting to know better and better that business and the people there, our team there. Number one, our team there is fantastic, very creative, full of ideas and approaches. And I believe that together, we can build our Middle East and Africa what we built out of South America, which is growing through localization.
In South America, we've been localizing everything, engineering, design, specific products, suppliers, if we follow the same recipe in Middle East and Africa, specifically in some markets, right? And then I believe that we will enjoy a similar success also there, right? So I'm very thoughtful and focused on Chinese offensive in those jurisdiction. But in the Middle East and Africa still we have a lot of room of improving, right? You mentioned Turkey, for instance, [indiscernible] Algeria. It's a huge interesting market for us. And in South America, we can consolidate further our leadership there.
Right. With that, I think we're out of time. But thank you so much for attending.
Thank you very much.
Stellantis — Q3 2025 Earnings Call
1. Management Discussion
Ladies and gentlemen, welcome to the Stellantis Third Quarter 2025 Shipments and Revenues Call. I will now hand you over to your host, Mr. Ed Ditmire, Head of Investor Relations at Stellantis. Mr. Ditmire, please go ahead.
Thank you. Hello, everyone, and thank you for joining us today as we review Stellantis' third quarter 2025 shipments and revenues. Earlier today, the presentation material for this call along with the related press release were posted under the Investors section of the Stellantis Group website.
Today, our call is hosted by Antonio Filosa, Chief Executive Officer; and Joao Laranjo, Chief Financial Officer. After their prepared remarks, Antonio and Joao will be available to answer questions from the analysts. Before we begin, I want to point out that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement included on Page 2 of today's presentation. As customary, the call will be governed by that language.
Now I'll hand over the call to Antonio Filosa, Chief Executive Officer, Stellantis.
Well, thank you, Ed, and hello, everyone, and thank you all for joining us today. First of all, please let me to recognize our teammates that are struggling with the effects of the terrible hurricane in Jamaica and surrounding areas. We are very close to them.
So let's get started. There are 3 important topics we want to cover today. First, our commercial plan is progressing with a third quarter return to top line growth. Second, I want to cover our recently announced a $13 million investment in our U.S. manufacturing and product to explain the new opportunities it opens.
And third, Joao will take you through the numbers we are reporting and give you our assessment of the second half 2025 outlook. So let's begin with a summary overview of the third quarter. First, let's look at the performance, which improved as we progressed our commercial trends. Consolidated shipments and net revenue both increased 13% compared to prior year, and we delivered a global sales performance that was 4% higher year-over-year.
Net sales performance included a sequential increase in market share in North America and even stronger trends in the United States. At the same time, we also saw some share contraction in Europe for reasons I will explain shortly. Second, we announced our $13 billion U.S. investment program, which directs significant capital into our U.S. products, plants and production.
For customers, this means we are reentering segments where we have been missing for too long and extending powertrain choices in ways we know our customers love. Lastly, we are confirming our second half 2025 financial guidance which implies continued sequential improvement and at the same time, we'll continue what we started in the first half to structure our business for profitable growth.
Now let's go into more details on our commercial progress. First, products. This year, we set out a plan to launch 10 major new products. In the third quarter, we launched the fifth and the sixth of those, the Citroen C5 Aircross and the DS N°8, both on the rapidly scaling STLA Medium platform. We have 4 important remaining products scheduled to launch very soon, 2 in North America and 2 in Europe. And I will detail why each can be very impactful.
So let's look at the 2 launches in North America. The Jeep Cherokee marks our return to the mid-sized SUV market in the U.S., the largest vehicle segment, around 1/5 of total volume of the industry. Jeep Cherokee will bring us back into that huge mid-SUV segment with a very competitive design and capabilities. For example, the new Cherokee has significantly more room and the brand's first ever full hybrid powertrain, dramatically boosting fuel efficiency and range.
Moving to Dodge, we will soon begin production of the exciting ICE Charger SIXPACK in both 2 and 4 door configurations after more than 2-year absence. The initial Scat Pack high output 2 door frames sold out the entire 2026 model year when we opened for orders.
Now let's go to Europe. The Jeep Compass has had considerable success in the past. This new generation Compass built on the STLA Medium platform features 3 powertrain options, BEV, PHEV and hybrids for the first time ever. And then the Fiat 500 hybrid, one especially close to my heart as an Italian, which will enable this very successful nameplate to appeal to a much wider audience than it could be as a BEV only product.
Now let's look closer at North America. This was a very exciting quarter with market share in U.S. starting to improve, a strengthened order book and strong execution of the new product pipeline. U.S. sales rose 6% versus the prior year, with several Jeep products, Wrangler, Gladiator and Wagoneer showing solid gains. Our new Ram expressed a 1500 HEMI V-8 variants began shipping. These products are likely to show a bigger sales impact in the fourth quarter as availability on dealer lots increases.
Since announcement, we have received more than 43,000 dealers orders. And in fourth quarter, we are launching our updated Jeep Grand Wagoneer large SUV and that all new Jeep Cherokee mid-size SUV. So our momentum in the U.S. is starting to pick up even before the very important new U.S. investment program that I will discuss shortly.
Now to Europe. Here, we are making solid progress executing the product plan. But the context is tough with softer volumes in the French, Italian and light commercial vehicle markets, where we are the biggest player. Due primarily to these market mix headwinds. Our third quarter EU30 market share was down 70 basis points versus prior year. We are taking the necessary step to earn that back. In the A segment, we will be introducing the Fiat 500 hybrids, where we see significant pent-up demand, especially in Italy. In the B segment, we are continuing to ramp up the new smart car platform products.
Next, we will launch an ICE version of the Fiat Grande Panda. And in the C segment, we will launch soon the Jeep Compass. At the same time, together with other members of the ACEA, we are heavily engaged with European policymakers to define and implement urgently needed reforms to revitalize the European auto industry. I believe there is a strong cross industry consensus that the rules need to change and change quickly.
Last quarter highlighted 6 near-term opportunities we had to improve profitability, spending new products, changes for the new model year vehicles and improved manufacturing and operational efficiencies. And I'm happy to report we are making good progress. The return of the HEMI V-8 to the RAM 1500 light-duty trucks in the third quarter has delighted many of our customers.
Next, SRT. We will bring an initial SRT model, the Dodge Durango SRT Hellcat to market in the fourth quarter. This will be the first of several SRT products that we will launch in the coming years. And we pointed to the ramping up of the 4 smart car platform products in Europe. In the third quarter, we increased production by 57,000 units year-over-year, which is exciting because we have approximately 120,000 orders for these vehicles in our order book.
Next, I want to recognize our global Pro One commercial vehicle organization. This is a critical differentiation for us. Our grid commercial vehicle products represent roughly 30% of our revenues in aggregate across the regions. Europe, where we are #1 in commercial vehicles with a solid 28% share. We are expanding our in-house customization options.
In South America, we are also #1 in commercial vehicle with a 31% share. We are expanding how we cover the mid-size pickup segment with the new launched Ram Dakota. And in Middle East and Africa, where we have a 20% share, we are launching a local production of compact Fiat [ Benz ] in Algeria, market where we have especially strong share leadership.
In North America, we have a 12% share. We have returned the Ram 1500 HEMI to the lineup with more product actions to come. Now let me touch briefly on a topic where we have some exciting announcements recently. We are excited to, by the way, technology and other dynamics are evolving to bring robotaxis closer to commercial viability, and we have announced a new collaboration with incredible partners.
First, in October, we announced plans for Pony.ai to adopt our fully electric LCV and jointly develop a program to launch a large robotaxi people-mover. First prototype vehicles have already begun testing in Luxembourg. And then just this week, we announced a collaboration with NVIDIA, Uber and Foxconn to build fleets or robotaxi based on our AEV-ready platforms, LCV and STLA Small targeting U.S., U.S. cities as first. We are extremely proud of the fact that these outstanding partners recognize the advanced capabilities built into our platforms, and I'm convinced we can deliver substantial value in the emerging robotaxi market and space.
Now let's turn to our exciting investment news. Since I took the CEO role, I made clear inside and outside the company that the U.S. is a key priority for our success. Because when we are strong in the U.S. we are stronger and better as a company everywhere. The $13 billion we will invest in U.S. in the next 4 years is an investment in growth. This is the largest single investment in our history and a proud commitment to our U.S. people, plants, products and communities.
This investment will support the introduction of 5 all new vehicles to U.S. plants and critically increase the level of U.S. production by 50%. I want here to recognize the administrations for their important focus on making pragmatic changes to regulations and tariffs. This is truly making the difference. So let's look more closely at how this investment enlarge a lot opportunities for us.
First, Jeep. Jeep is showing gradual improvement in U.S. in 2025, with quarterly sales growth of 11%, nearly double the U.S. market growth of 6%. We also have an exciting quarter 4 planned with all new Cherokee and refreshed Grand Cherokee and Grand Wagoneer. To build on that momentum, the new U.S. investment includes plans to manufacture, Jeep Compass and Jeep Cherokee in our Belvidere plant. This is critical to our strong offensive in the sub-40k U.S. dollar market. We are also investing to bring new technologies and other strong product actions to the iconic Jeep Wrangler and Jeep Gladiator.
Our ability to serve the mid-sized SUV segment, the largest in the U.S. car market at 20% of total industry volumes is extended in a powerful way with Jeep Cherokee and a very unique trade rated Recon, which arrives in 2026. Overall, we are substantially stepping up our market coverage. The lineup is incredibly fresh and exciting, and our manufacturing sites will be ready to support higher demand.
Now Ram. I've spoken already about the strong product actions at Ram in 2025, which have helped us drive year-to-date retail sales 26% higher than last year. Now with the U.S. investment, we are opening up additional growth. First, we are putting in place a much more comprehensive product range. We have now set the plan to return Ram by 2028 to both the mid-sized truck and large SUV segment.
Second, we are leading on innovation. With this new large SUV, the Ram lineup will include 2 models alongside the Ram 1500 REV, both set to future our unique and very innovative range standard powertrain. Lastly, Ram will be showing even more of its trademark passion with 2 new SRT performance products to be rebuilt in the coming months each with utterly distinct value propositions. We are building the most comprehensive, the most innovative, the most passionate ramp ever.
Now over to Joao, who will take you through the numbers for the quarter. Thank you for now.
Thank you, Antonio. Good afternoon, and good morning, everyone. It's my pleasure to be speaking to you for the first time as a Stellantis new CFO.
So let's start with the top line figures. In the third quarter of 2025, Stellantis saw a return to year-over-year top line growth. This ended a tough period of 7 quarters of year-over-year declines. Consolidated shipments of 1.3 million units were up 13% or 152,000 units. Most of the increase came from a 35% improvement in North America. That increase mainly reflects the benefits of normalized inventory dynamics.
To elaborate the prior year shipments were heavily impacted by the second half of 2024 U.S. dealer inventory reduction actions, which entail substantial factory downtime. Net revenues of EUR 37.2 billion were also up 13% compared to the third quarter of 2024. That was driven by increases in North America, Europe and Middle East and Africa.
Let's turn to the revenue bridge to understand the 13% revenue increase in more detail. The improvement was driven mainly by the volume increase in North America and Europe. The 13% revenue increase year-over-year was driven mainly by the 13% volume increase. Other factors, including positive mix and pricing were offset by FX headwinds. On volumes, in addition to the improvement of 104,000 units reported by North America, we also saw a net total 48,000 units increased from the other regions with positive contributions in Europe and Middle East and Africa, partially offset by a moderate decline in South America.
Next, pricing was up 2% compared to the third quarter last year. This was driven by gains in North America, where a roughly 4% increase reflect a low prior year comparison point when higher incentives to clear aged inventory were in place. We are also benefiting in 2025 from a strong inventory discipline. We continue to see ongoing pricing headwinds in Europe, but positive pricing dynamics in South America and Middle East and Africa. FX remained a material headwind in the third quarter, with EUR 1.7 billion negative impact at the group level. This reflects the devaluation of the U.S. dollar, Turkish lira and Brazilian Riyal versus the Euro. The U.S. dollar impact was by far the largest part of this.
Now let's move to our regional segments. The third quarter saw year-over-year volume and net revenue improvements in North America, Europe and the Middle East and Africa. Jeep Wrangler and Ram light-duty nameplates in particular, drove volume improvement for North America. Europe saw the ongoing ramp-up of European smart car products, the second quarter of 2025, which helped sales. At the same time, we are seeing generally subdued registration volumes in Europe year-to-date. Middle East and Africa had a strong shipment increase of 21% driven mostly by higher volumes in Algeria, where the company has significantly raised its local production.
South America revenue was down 5%. This is in part due to tough comps compared to the third quarter of 2024 when Stellantis benefit from a recovery in Brazilian shippings that had been delayed by the second quarter of 2024 flood in Rio Grande do Sul.
Turning now to inventories. The stock levels remain well managed at the end of the third quarter of 2025. Total inventories rose 4% sequentially compared to the end of the second quarter. That is primarily due to higher stock in North America, mainly to the ramp-up of any V-8 Ram 1500. U.S. dealer inventory days of sale remained in the mid-60s, consistent with where we ended 2024.
Moving forward, we expect to continue to see some absolute increase sequentially at the group level as we continue expanding the product lineup in the market. While the relationship to sales will remain relatively stable. Let me end this section with our 2025 guidance, which we are confirming in all respects. We expect the second half 2025 to continue the third quarter's return to year-over-year growth and to be above first half 2025 levels, stronger volumes and their contribution to improved industrial efficiency will put us in position to deliver low single-digit adjusted operating income margin in the second half and we are working to deliver sequentially improved industrial free cash flow.
Please note also, we have refined our projection for net tariff expenses for 2025, now approximately EUR 1 billion compared to the prior EUR 1.5 billion. There are a few other things I'd like to touch on which, while they are currently expect to have limited impact on the aforementioned second half guidance metrics will likely affect other aspects of our second half financial results. First, as we indicated in July, we are engaged in the ongoing process of reviewing all aspects of the business as part of updating our strategic plan. This will likely lead to further charges in the second half.
We expect that a large portion of the charges will be excluded from AOI to the extent that they are not indicative of our ongoing operations. Second, we are in the process of updating how we estimate warranty costs. Our historical model was in line with industry practice and worked well. However, in recent periods, we've experienced cost inflation. While this change in estimate does not change the actual cash cost or their time, it is likely to result in a onetime charge, which would increase the level of balance sheet reserves. It is not expected to materially impact future period profitability compared to the 2025 run rate.
Now I'll hand the call back to Antonio for some closing remarks.
Thank you, Joao. Before opening to your questions, let me recap the key points from today's presentation.
The third quarter revenue and shipment performances give an early signal that our actions are beginning to have a positive impact. You can see that in quarter 3, we continued the accelerated the actions we started in January to correct past strategic and operational decisions. We quickly changed our organizational structure to restore proximity to our customers, dealers and suppliers. We reconnected with our governments and regulators, and we took important decisions such as the product actions and major investments we discussed today that have restored the freedom to choose to the very heart of our strategy.
And lastly, confirming our second half guidance signals our belief in further steady sequential progress quarter-by-quarter. That concludes our opening remarks. And so I would like to ask our operator to open the line for your questions. Thank you.
[Operator Instructions] The next question comes from José Asumendi from JPMorgan.
2. Question Answer
A couple of questions, please. Antonio, certainly a very exciting product launches coming through in North America and product refreshes. I was wondering if you could talk a little bit around how everything comes together when it comes to improvement of production capacity, utilization of the plants and ultimately also improving pricing power I know that it's a question that goes into 2026. But as we think about the short-term and maybe longer-term, what are you thinking in terms of those 2 metrics?
And then second question, Joao, again, most welcome. And I was wondering if you could just give us a little bit your thoughts with regards to the key levers to improve free cash generation maybe second half of the year where you are hinting towards an improvement. Is there an opportunity to even generate cash in the second half? Or if not, how do we think about the levers of the improvement in second half versus the first half?
Thank you, José, for your questions. So I will take the first part of your questions, and then I will leave to Joao the second part of your question.
So let me start, please, by saying that today in quarter 3, we celebrate a return to top line growth, both in shipments and in revenue after 7 quarters of shipments and revenue decline. And also since your first part of the question was around pricing power, we celebrate a favorable pricing for the first quarter after 4 quarters in a row of unfavorable pricing. And still, we are very competitive into the market.
So we believe we are very well positioned for future growth. And the way we want to address our future growth even in pricing power is through a strategy that we are setting since the beginning of the year, and we are implementing since then, that is aimed to correct the past strategic decision. So we know that our major issues was product gaps, both in North America and Europe, and we are implementing strong corrections in the short-term and in mid-term around those. This is the case, for instance, of the re-introduction of the V-8 engine of Ram 1500, which is a big volume opportunities but also very accretive on profit per unit.
This is the case of the relaunch of the ICE engine for the muscle cars of Dodge, again, both opportunity and profit opportunity and this is the case of the launch of Jeep Cherokee in the largest individual segment in the world, which is the U.S. mid-SUV segment that accounts for 20% of the entire industry in the U.S. This is the way we want to correct the past strategic decision, fulfill our product lineup with products that we know our customer wants and grows both in volume and profit.
This is the first part of my answer, and I will leave Joao to answer the second.
Thank you, Antonio and hi José. So on your second question on the biggest driver for the free cash flow improvement in the second half, it's primarily volume growth in North America. That is the primary driver for the improvement and underscores the importance of continuing to improve sales and volumes across our machine.
The next question comes from Philippe Houchois from Jefferies.
I have 2 questions. One is on the free cash flow dynamics. Because I understand the improvement from H1 to H2, you had negative EUR 3 billion in the first half. It seems the market seems to be anticipating being EUR 1 billion and EUR 2 billion negative in the second half. But I just want to clarify, in the second half compared to first half, the past utilization both in the U.S. and in North America and in Europe is probably up.
And then trying to understand sequentially as well as long as you have sequential improvement in your production, which I think is the case. And then normally, working capital should be a significant contributor to free cash or to cash generation notably under the payables at the year-end. If you can help me make sure that I'm not the wrong in our assumptions or I know you're not going to tell us what the cash flow is going to be second half. I'm not asking, just to understand the dynamics, that would be helpful.
The second question is on tariffs. Again, thank you for clarifying that the $1.5 billion is lower. Some of that, I guess, is the timing of the tariff on the full-size pickup. 2026 normally should be a higher tariff because you are going to have 12 months of Ram in Mexico, and you're going to have the relaunch of the Cherokee. Then in 2027, you start having the benefit of reshoring to more production to North America, to the U.S. specifically, both vehicles and engines.
Is it right to assume that 2027, I know it's far away, but understand the dynamics, the 2027 tariff is going to be lower than '26 and potentially going back to the level of 2025. If you could help me understand that, that would be great.
Yes, for sure. Thanks, Philippe. On your first question on the free cash flow, the way that you're thinking, it's correct. The only piece of information is the second half versus the first half. The region where we're going to see primarily the volume improvement is North America. But other than that, your rationale is correct. On tariffs, I'll leave Antonio to answer the question.
So on tariff, my answer is the following. So our new strategy that we have been starting to implementing since January, has been meant to grow in our most important and largest market, which is U.S. but also has a positive side effect to reduce exposure against tariffs as you said, in the next years. Then obviously, many things around this topic will happen, including the final settlement of USMCA and we'll be ready to manage this new variable of our business equation as we are doing already. Thank you.
The next question comes from Henning Cosman from Barclays Auto.
Can I just ask you a little bit higher level, your predecessor management had given us a bit of a steer saying that you've abandoned all-weather above 10% margin company narrative. I think the indication then became more like 6% to 8%, perhaps in favor of growing volume, growing market share. I just wanted to ask again, if you're still endorsing this kind of narrative now as a new now complete management team and what the underlying prerequisites for this are? Does that still imply something like 10% U.S. market share, 20% European market share? Does it require incrementally positive pricing from current levels? How does the reshoring in the U.S. fit into that?
I would imagine it would come with higher depreciation, it will probably come with higher labor costs. If you could just give us like a sort of updated framework where you see the company going over the next few years in a sort of steady state. And then secondly, perhaps more again with respect to near-term free cash flow dynamics. I just wanted to clarify, I wasn't sure in response to Philippe's earlier question, if you endorsed that minus EUR 1 billion to minus EUR 2 billion if you didn't mean to make any statement in that respect.
So I'll take this second piece. No, I was not referring to the number, but the dynamics. We are -- the guidance that we have here, it's improvement versus H1, and that's what we are confirming. Thanks for asking for that clarification.
So thank you, Henning. And I will take the first part of your important question, and thank you for that one. So I believe that we will deploy -- we are deploying already since January, a strategy of growth that will deliver to the company, a steady sequential improvement in all business KPIs quarter-by-quarter. This is our major target, and this is what we will do.
Now what we understand is also that a 6% to 8% AOI business is a reasonable target for the mid-, long-term for this company, and we will have Capital Market Day to discuss further on those objectives. The most important to us is now to deliver what we want to do, which is a steady sequential improvement quarter-by-quarter or all business KPIs.
The next question comes from Thomas Besson from Kepler Cheuvreux.
I have 2, please. Firstly, for Antonio, I'd like you to talk more about the order intake, please. Could you give us a bit more granularity on the higher U.S. order intake? What has been already the impact of relaunching HEMI on Q3 volumes, what the initial reaction -- reception of the Cherokee so far since the order intake has been opened? How much benefit should we see in Q4 from this already? And when should we expect the full impact on your registration figures of these new products? Could you also give us an assessment of where you see the overall U.S. market in Q4? I think GM and Ford have talked about the 16 million market that would be useful.
And then the second question, probably more for Joao. On warranty cost and provision, you talked about a change in methodology that will drive some one-off charges. Can you remind us broadly the recall costs for '25 you expect versus '24 and '23 and confirm that setting up this provision for using this new way of assessing future recall costs has no cash impact on H2? And can you eventually make as well some comments by region, whether you're using different methodologies or whether costs vary a lot between North America and Europe in particular?
Well, thank you, Thomas, and I will take the first part of your important questions, and I will leave Joao answer in the second part. Thank you for the 2 questions. So your first question, the dynamics of order collection in the U.S. is going very well. Actually, it has been already 12 months in a row that we had almost improved month-over-month every month our order portfolio and the new products have been received very, very well and very strongly. So for instance, we have been accumulating more than 43,000 orders since we announced the Ram V-8 legendary HEMI return.
After announcing the Dodge muscle car charger with an ICE variant, we received the orders that we need to close the full production up to next model year. And Jeep Cherokee announcement has been received very, very well, very strongly. Both by customers, dealers and also journalists. Not to mention the last presentation of the renewed Jeep Grand Wagoneer that also has received a lot of interest from dealers, from customers and also from journalists. So we are very pleased to see our order book strengthening month-over-month and this is very important to build upon for next year.
For your question about what industry we see next year, well, we see an industry that can be fought in around 16.4 million, 16.5 million units for U.S. This is my answer, and I will leave Joao answering to the second question you did. Thank you.
Okay. So -- on the warranty, the first thing is that the methodology that we are reviewing would primarily impact U.S. and Europe. And the potential adjustments would be a noncash provision in 2025. The warranty cost, the total warranty cost for the group in 2023 was EUR 8.9 billion. In 2024, sorry -- corrections here. It was actually mentioned the balance sheet for warranty in 2024 was EUR 9.3 billion. And then on the details specifically to the recalls, we can follow up on off-line if it's okay, Thomas, because I don't have the numbers on hand here.
The next question comes from Patrick Hummel from UBS.
Also 2 questions from my end. The first one, Joao, your predecessor said that the second half AOI in North America should be positive. Now this is nowhere in the deck, you had a good volume balance over the first half in North America. So I was just wondering if that statement is still valid that we should expect a positive AOI for North America in the second half?
And my second question relates to free cash generation of the business. I appreciate today is not guidance day. But if we qualitatively think about the puts and takes for the cash flow as we're heading into next year, is it fair to say they are going to be higher investments year-over-year because you've got that $13 billion plan for the U.S., I guess some of that CapEx is going to be incremental and I'm still wondering if there is a little trailing effect on free cash flow of any bigger further one-off announcements you might have in the second half of this year.
So would you say with confidence that next year's free cash flow should be in positive free territory? Or is that too early to say?
Yes. No, thank you for the question, Pat. So first on North America, we are not providing guidance by region. But we are very focused on sequentially improving quarter-by-quarter, as Antonio mentioned. And then on free cash flow, despite the investments that we have announced in the U.S., we continue to focus on [ monthly ] investments around 8% of our revenue going forward.
And the -- in relation to the adjustments that we are working on our strategic plan, we are still going through them and assessing the amount. So I don't have right now final figures to understand the impacts for next year. And we'll provide an update, obviously, on that when we have the financials for the full year financials.
The next question comes from Michael Foundoukidis from ODDO BHF.
Two questions on my side. First one on the U.S. investments you recently announced with plans to significantly increase vehicle production in the country. This could have some implications on your cost structure, I guess, and probably for your peers as well, if they decide to go on the same path. Would you be eager to have your view on this? And do you believe that the pricing environment in the U.S. could be negative regarding new vehicle demand going forward? Or do you think that you can get some substantial, let's say, efficiency or competitiveness gains to offset these higher costs?
And then second question on volumes. Any comments you could share on October or maybe Q4 trends, especially in the U.S. You highlighted several times during your presentation that North American volumes where are the key driver of the expected earnings improvement. So would you expect most of this improved momentum to come, let's say, in the next 6 to 12 months to be driven by retail or fleets or both equally?
Thank you very much, Michael, for your 2 questions, and I will answer both of them. So on the volume, which is the latest question that you did on October and quarter 4, yes. We see improvement on volume in North America, mainly U.S. because we will see the first positive impact of the launches. The V-8 Ram 1500 is hitting now the dealer lots and is turning very, very fast, driven by a very strong pent-up demand. We will launch in production on Jeep Cherokee by the end of quarter 4. So the first units will get to the dealer lots in that period. Obviously, the major positive impact will start being visible in quarter 1 next year when the largest portion of first unit builds will hit the U.S. dealer lot.
The same story on the door charger ICE engine equipped that will be launching production in the next months. Few units will get to dealer lots by the end of the year. Most of them will be hitting the dealer lots by quarter 1 next year. But yes, volumes will increase in U.S. with increase in North America.
The first part of your question is about the investment that we are deploying in U.S. products and plants. And if it will have an impact on profitability. So number one, we see a pricing scenario for U.S., which is stable, and this is good news for us. Number two, we are working on cost efficiencies in all the globe and obviously, North American plants and U.S. plants. Number three, our investment is meant to grow in the largest and most important market that we manage, so we see just positive impacts out of it. Thank you very much for your question.
The next question comes from Horst Schneider from Bank of America.
The first 1 relates to Europe. A colleague asked already about your expectation for the North American margins. In that context, I'm asking about Europe because you said in the H1 call that you aim to improve margins in Europe. You just said in the U.S. also you want to improve margins semester-over-semester. Can you confirm that also for Europe maybe? Because my impression is that Europe is getting slightly worse because you talk about increasing incentives and the back share is increasing. So therefore, my question is what implication has that got on European profitability.
Then the second question that I have is regarding working capital. Maybe you can explain how you expect working capital basically to develop into year-end? So I would expect inventories to increase slightly. Maybe you can quantify that and trade payables also to increase. But in that context, with this Nexperia chip shortage maybe you can say how your plans could be affected by that. So if there's any supply disruption coming up, if that plan would be at risk?
And the last question that I have is on the USD 13 billion CapEx in the U.S. I wonder what that means in terms of restructuring need for Mexico and Canada, not sure if you ever made a statement on that if you plan any plant closures but also can you maybe split the $13 billion CapEx into capitalized or -- not capitalized R&D -- into R&D, but also into CapEx for property plant equipment.
Okay. Thank you, Horst, for your clear 3 questions. So let me start answering with the European parts. So in Europe as well, we intend to do 2 things: earn back the market share that we have been declining a little bit. And this is majorly driven by 3 product actions. Again, product is at the core of our new strategy that we are implementing. So the first is in A segment. So in A segment, we launched in production in end of November, Fiat 500 hybrids. This is first a big volume opportunity mainly in Italy. Second, profit per unit accretive since for sure, the hybrid version of Fiat 500 will generate to us a better profit per unit than the only BEV version.
The second product offensive that we have in Europe is around B segment, where we see a big volume opportunity in ramping up quicker the 4 products out of a smart car platform. Again, we improved our production by 57,000 units year-over-year. This is because we have a very strong order book that so far, it's 120,000 units orders collected in those 4 important nameplates. This is, for sure, a big volume opportunity that we have in front of us.
The third product action is about the launch of Jeep Compass out of Melfi plant in Italy. Jeep Compass will be our strong player into the C SUV segment in Europe which is a big volume opportunity for us, but also a profit opportunity for us. So for sure in Europe, we see a very nice future of volume growth but we also see some important profit improvement, driven by mix of models and mix of trims per each model.
On Europe, I also want to comment a little bit, the regulatory framework that we see today. So what we see in Europe is a regulatory framework, [ we change it ] and changed it quickly. And we have been working very intensely with the ACEA organization [indiscernible] to promote our ideas of flexibilities that we want to introduce in this regulatory framework. And I've been very vocal in the press with stakeholders about the 4 major points of our agenda, 4 major flexibilities that we would like to introduce.
So on the $13 billion investment in U.S., which I believe is the second part of your questions. Well, for sure, we will use that to leverage the industrial capacity that we have in North America everywhere, for sure in U.S., but also elsewhere where we are not announcing any planned shutdown.
Finally, on the cash management, Joao, if you want to add to your point, please.
Horst, on the working capital, we do expect the dynamics that you mentioned due to the increase of volumes in North America, as I mentioned previously. And obviously, any production disruption for now to the end of the year, would have a large working capital impact because of the negative working capital position that we have, right, as we usually collect the cash as we invoice the vehicles and have payment terms with suppliers.
And your supply is safe until then? Volkswagen said the supply is safe until end of next week. Is it the same for you that visibility is just poor for you as well?
So we are monitoring day-by-day on daily basis the chip situation from Nexperia. We have a cross-functional war room in the building where I'm sitting that has this as primary job. And every day, we are pushing actions and projects to extend our period. So this is a management -- day-by-day management of what is the industry-wide global issue.
The next question comes from Emmanuel Rosner from Wolfe Research.
The first one is just a point of clarification. These charges that you're taking in the second half, both for, I guess, turnaround actions but also for warranty. Can you just confirm again if there's any sort of cash impact that you should be thinking about associated with it and whether that would be included in the free cash flow reiterated guidance? And then just maybe a little bit longer term, with these changes in U.S. regulations and in particular, a significant easing in the emissions regulations, what kind of opportunity does that provide for you? What kind of upside does that unlock 1 of your the 3 competitors on the record saying that this is a multibillion dollar opportunity. How would you plan to take advantage of it?
Okay. Very good. And thank you, Emmanuel, for your 2 questions. I will start answering, and then I will leave the stage to Joao.
So obviously, the new regulation that in our point of view are very pragmatic and are giving back the U.S. customers, their freedom of choice. We welcome them very well. We believe those represent to us a very good news for the short, mid and long-term, and we intend to explore all the value that we can extract out of those through mix.
So in our product offer that we are implementing since January, freedom of choice is the mantra of our strategy. We are still a lot developing beautiful BEV vehicles for the customer that will prefer a BEV. That's why we are launching the Jeep Recon very soon in half 1, 2026. But also, we are enlarging our lineup with ICE introduction, hybrids introduction.
This is the portion of the industry that is growing fast. The fastest one in the U.S. and our first car will be the Jeep Cherokee full hybrid and range standard introduction. This is very pioneeristic. We will be the first in the industry to launch in U.S., a range extended powertrain or a pickup truck, but also for a large SUV. While we keep our leadership as Stellantis in the PHEV. So really freedom of choice is at the basis of the new strategy that we are implementing since January this year.
Again, in answer to the past decision, strategic decision that we believe was important to correct, right? And this change of strategy is triggering the charges that Joao will detail a little bit.
Thank you, Antonio, and hi Emmanuel. So the reviews -- the strategic review and the product plan reviews that we are undertaking would lead possibly to project cancellations as we have already communicated the light-duty BEV here in the U.S. And the type of adjustments that we should expect on the project cancellations would be a write-off of CapEx and R&D capitalized spend and also other program cancellations costs. And those other program cancellation costs, they could have a cash impact, which we would expect to have limited cash impact in '25 and more into the future.
Ladies and gentlemen, this was the last question. With this, I am handing over back to Antonio Filosa, Stellantis CEO, for his closing remarks.
Well, thank you, and thank you, everyone, for your time and focus on the Stellantis story. It was a privilege to update you on the company's commercial progress and its return to top line growth. Talk about why the investment in the U.S. and the strategic updates we are making are so important and reiterate our guidance, bringing continued sequential improvement quarter-by-quarter. I look forward to updating you on our progress in the coming months and quarters.
Thank you everyone.
Financial data from Stellantis
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 228,366 228,366 |
36%
36%
100%
|
|
| - Direct Costs | 221,820 221,820 |
43%
43%
97%
|
|
| Gross Profit | 6,546 6,546 |
50%
50%
3%
|
|
| - Selling and Administrative Expenses | 13,634 13,634 |
33%
33%
6%
|
|
| - Research and Development Expense | 4,565 4,565 |
42%
42%
2%
|
|
| EBITDA | -11,653 -11,653 |
2,458%
2,458%
-5%
|
|
| - Depreciation and Amortization | 2,743 2,743 |
11%
11%
1%
|
|
| EBIT (Operating Income) EBIT | -14,396 -14,396 |
390%
390%
-6%
|
|
| Net Profit | -21,899 -21,899 |
698%
698%
-10%
|
|
In millions USD.
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Company Profile
Stellantis NV engages in the design, manufacture, distribution, and sale of vehicles. It offers its products under the Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Fiat Professional, Jeep, Lancia, Opel, Peugeot, Ram, and Vauxhall brands. The company was founded on April 01, 2014 and is headquartered in Hoofddorp, the Netherlands.
StocksGuide Premium
| Head office | Netherlands |
| CEO | Mr. Filosa |
| Employees | 258,668 |
| Founded | 2014 |
| Website | www.stellantis.com |


