Fitch Cuts Stellantis Outlook To Negative Amid Turnaround Struggles

Stellantis is facing new financial pressure as Fitch Ratings has revised the automaker’s outlook from “stable” to “negative,” even as it affirmed the company’s long-term “BBB” issuer default rating and senior unsecured rating. The agency later withdrew all ratings for what it called “commercial reasons,” according to a report by Investing.com.

Fitch’s move comes as the multinational automaker grapples with a tough turnaround plan. The agency cited ongoing execution risks and potential cash outflows tied to the restructuring of Stellantis’ global operations. After burning through roughly €10 billion (about $10.8 billion USD) in 2024, the company’s free cash flow margins are expected to remain negative in 2025.

Stellantis posted weaker-than-expected results in the first half of 2025, weighed down by multiple setbacks: program cancellations, platform impairments, stricter CAFE (Corporate Average Fuel Economy) penalties, and restructuring charges. Those items added up to a €3.3 billion (roughly $3.6 billion USD) hit to profitability, leaving the automaker with a net loss for the first half of the year.

The road ahead isn’t without hope. Fitch projects that Stellantis could see gradual improvements in the second half of 2025, with EBIT margins hovering around 2%. A more meaningful recovery to above 4% is anticipated in 2026, fueled by new vehicle launches and more favorable pricing once bloated inventories are cleared.

New CEO Antonio Filosa faces the challenge of addressing market share erosion, an uneven electric vehicle transition, and a complicated brand portfolio. The company’s European footprint and exposure to tariffs in the U.S.—where nearly 40% of its vehicles are imported—remain ongoing concerns. Management has already warned that tariffs could cost Stellantis €1.5 billion (about $1.6 billion USD) this year, with €300 million already incurred in the first half.

Despite these headwinds, Fitch still sees Stellantis as a strong mass-market player alongside rivals like General Motors (GM), Hyundai, and the Renault-Nissan alliance. However, its global reach is less diversified than Volkswagen or Toyota, and its luxury offerings can’t yet match BMW, Mercedes-Benz, Audi, or Porsche.

Even with ongoing cash pressures, Stellantis is expected to maintain €25-30 billion (roughly $27-32 billion USD) in cash and equivalents through 2028, factoring in a €3 billion share repurchase program and adjustments for restricted funds. The next 18 months will be crucial as the automaker balances cost-cutting, tariffs, and its multi-brand EV strategy in an increasingly competitive market.

Source: Investing.com