Stellantis declares bankruptcy in China, with $1B in debts
87 comments
·July 14, 2025Animats
mlsu
What is the 2023 mistake that he is referring to?
Animats
The usual thing when some finance guy is in charge. Cut costs, raise prices, increase short term profits, defer the collapse until later. The collapse came within a year. But for one year, Tavares was the highest paid CEO in automotive.
Wikipedia: "Under the leadership of Tavares, Stellantis faced mounting criticism over its cost-cutting strategy, declining sales, and strained relationships with key stakeholders. Tavares implemented aggressive restructuring measures, including workforce reductions and tight control over product development, which some analysts blamed for delays in new model launches and weakening brand performance, particularly in North America.[45] U.S. dealers expressed concern about rising inventories and brand mismanagement, while the United Auto Workers criticized the company over job cuts and halted investment plans. Stellantis reported a 70% drop in net profit in 2024, with global shipments and U.S. market share declining significantly.[48] Amid internal friction with the board and worsening financial performance, Tavares resigned in December 2024, two years before his contract was set to expire."
RandomThoughts3
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aetherspawn
I am an automotive components supplier and I’ve always wondered how automotive giants are staying open or even turning any profit at all (1)
Between this, Nissan and a dozen others, I guess there’s a lot of running-on-debt going on.
1: it’s so difficult with the latest round of laws making a very high level of ADAS mandatory. Huge spend in R+D, particularly software and vertical integration, and then again huge spend on the physical car electronics.
dmix
It helps markets like US and Canada have essentially banned competition from Chinese car makers and tightly controlled automotive trade in general from many other countries.
rafaelmn
EU also tariffed Chinese cars out of the market.
v5v3
Not a case of 'tariffed Chinese cars out of the market', more tariffed so they are priced similar to the market.
If they had tariffed Chinese cars out of the market, there would be a trade war between them.
RamblingCTO
I don't think this is true. Chinese automakers are fine and increasing market share here in Germany.
moltar
Doesn’t seem to stop them. I see more and more on the roads in Portugal. Even started appearing in car rentals recently.
ViewTrick1002
The EU tariffs are based on the portion of cost they calculated to be state aid. Ensuring fair competition.
We can always debate exactly how fair it is, and if the European companies would be forced to become better if competing without a tariff shielding them.
But the EU tariffs are nothing like the 100% tariff Biden instituted to completely shut Chinese cars out of the American market.
vkou
It's difficult to compete with automation.
deepsun
New cars prices doubled in the last 20 years. If anything, I would expect them to make record profits actually.
mrighele
At least in Europe, car are more expensive to make than 20 years ago, even inflation adjusted, as the EU keeps adding new and stricter regulations.
* Lower emissions, requiring more expensive engines.
* Making cars easier to recycle (but more expensive to build)
* Adding mandatory accessories for safety reasons. Here you can find an example of what that has been recently added. [1]. Nice stuff, but it doesn't come for free.
[1] https://autovista24.autovistagroup.com/news/what-is-the-gene...
tarsinge
You forgot the largest factor for price increases: manufacturers positioning all models as luxury ones. All the while cutting corners on quality control. Take French ones, they went from not the most well built but affordable cars for the masses to pseudo luxury expensive cars that still fall to pieces after 5 years. Who’s gonna buy that?
Stellantis for example knew about the problem of their engine blowing up since before 2020, but they chose to ignore it. Small turbocompressed engines are or new at this point and how to make them reliable is known too.
Or take VW, cheating before 2015 so regulation is not an excuse, and since a decade most failures are parts like coolant circuits because of cheap plastic, gearboxes, and a lot of non safety related electronics features. And what is the replacement for family movers? Luxury SUVs or 75k€ iD Buzz.
morsch
Cars have also gotten much bigger, heavier and more powerful.
giingyui
Cars in Europe are also more expensive because the EU allowed all brands to buy one another and now they don’t have to compete in price anymore.
adrianN
So prices have roughly kept up with inflation?
metaphor
No[1], far from it in the US...thank goodness.
metaphor
> New cars prices doubled in the last 20 years.
In the US, authoritative data sources[1] suggest otherwise.
Mindless2112
The CPI's hedonic quality adjustment means that this graph doesn't mean what you think it means.
readthenotes1
Also, that's not adjusted for inflation (tho obviously that may be difficult given how much this contributes to CPI)
thrwaway55
This is honestly tighter then you might think accounting for inflation. A 2000 1$ is 1.87$ today. 2005 seems like they should be doing a lot better since it's 1.65$ but it's not nearly as gangbusters as this comes across.
epolanski
That doesn't cope with less vehicles being sold overall and inflation, even if margins on a single car have never been higher I think (at least in US).
lynx97
That is called inflation. Almost everything doubled its price in the last 20 years. My rent, for instance...
jandrewrogers
They aren’t turning a profit on the hardware in many cases. They hope to make it up by selling financing and data from the platforms.
bn-l
I really don’t want my car to be a “platform”.
charcircuit
No one is forcing you to upgrade the trim on your car. That such an upgrade is available is beneficial. For something so expensive one would hope that it is extendable and you would not have to buy a whole new car if you wanted something different.
rsynnott
Astonishingly, Stellantis (the global business, not the Chinese subsidiary) is profitable, somehow. Pays a dividend, and everything.
v5v3
2024
revenue down 17% Net profit down 70% at a meagre 5billion.
https://www.stellantis.com/en/news/press-releases/2025/febru...
They need to spend billions on an ongoing basis in R&D
rsynnott
I'm always a little shocked that Stellantis keeps going; it's pretty much a collection of all the car brands where, on seeing one, people go "wait, they still make those?!"
That said, whatever about the Chinese subsidiary, it is, somehow, still profitable!
yourusername
PSA (Peugeot/Citroen) seems viable. The rest does seem like a collection of car makers with a bad reputation and a limited/outdated model range.
noiwillnot
Fiat seems doing well in Southern Europe.
speedgoose
I am not an automotive industry advisor, but I guess this could have been avoided if the group strategy wasn’t about maximising short term profits and manufacturing mediocre cars.
v5v3
The West indicated to their companies that ICE cars were being phased out by 2030 and set incentives and penalties. (To complete with China ev).
So the car companies rushed out EVs, panic spent on R&D. But without subsidies, most buyers didn't want them, as the charging infrastructure wasn't there (many people don't own garages or driveways or have 30 mins to sit in a charging point).
Now the west is delaying their previous targets to ban ICE cars.
speedgoose
China has now a strong lead in EVs while Stellantis did the bare minimum by manufacturing bad EVs sharing a platform with fossil cars, and selling them at premium prices.
I don’t know why Stellantis didn’t get the memo. Other car companies for sure did.
cyp0633
Stellantis brands sales in China have been in decline long before the emergence of EVs. There is indeed some existence of Stellantis in China via Leapmotor (laugh).
WhereIsTheTruth
Western elites are finding out how bad of an idea it was to betray their own people for a quick buck, returning home will be difficult
ako
Assuming you’re referring to CEOs outsourcing production to china to reduce costs? I doubt they had any real alternative with consumers always buying the cheapest option. Either move production overseas, or loose all sales to companies that do produce at lower cost. But you say, consumers don’t earn enough to buy locally produced products. True, but raising salaries won’t fix it, as it will make local manufacturing even more expensive. The whole system is not really sustainable.
atom_arranger
Tesla was built on American R&D and manufacturing and is competitive in terms of cost and features. It’s probably easier to not innovate and go for almost guaranteed short term profit by relocating existing manufacturing processes though.
I don’t think there was no alternative. I think it was an easier, more short term, and more selfish (in relation to fellow countrymen and descendants), choice.
WhereIsTheTruth
https://www.lemonde.fr/en/opinion/article/2024/04/17/the-exo...
To end up going bankrupt with 1B in debts, the problem is elsewhere
Thorrez
It sounds like the Chinese plants were created to sell cars in China. Is that betraying their own people?
SV_BubbleTime
Automotive EE here…
If you would have gone back twenty years and been like “hey, you know how you think the Germans are running ChryslerDodgeJeep into the ground? … just wait until you see what the Italians do… and then the French right after that!!”
I wouldn’t have believed it. Turns out the Germans really weren’t so bad.
Honestly, Stellantis is making the wrong move at every turn and one possibility that makes sense is stripping the company… or some elaborate revenge plot… because it seems like they speedrunning destruction.
crinkly
Stellantis are doing a wonderfully disastrous rebrand thing at the moment after finishing a previous one.
They rebranded the local dealership and service centre here “stellantis and you” at great cost. No one actually seems to know who the hell stellantis is or which car brands they own or sell.
That sort of stuff always feels like a death spiral.
The previous disaster was splitting lines. I had a Citroen which I was told was not a Citroen but a DS. Turned out it was both and put together with left over parts from both ranges. This caused all sorts of service problems.
senectus1
how much of this is China eating their lunch.. forcing them into poor decisions?
FirmwareBurner
Another (former)auto EE here. Their own poor decisions resulted in China eating their lunch. They couldn't stop shooting themselves in the foot, high on their own arrogance of European hundred year old industry superiority. Man, I wish I had a way to digitally export my memory of the townhall meeting in 2014 of a German luxury brand exec laughing on how bad Chinese EVs were. I bet, they aint laughing now, that's for sure.
Germans and Italians had a multi decade lead on EV motors, battery, self driving and electronic tech over China (why I entered the industry) but they shelved it because they wanted to sell more diesel engines, outsourced all R&D to the lowest bidder to save costs and invest all profits into share buybacks or dividends instead of R&D (why I exited the industry).
Are the German and Italian executives in charge of those decisions being held accountable for the mess they created, or are the enjoying a golden retirements/parachutes while thousands of workers are now being laid off and governments forced to spend taxpayer money to bail out their mistakes and rescue what's left to prevent further layoffs? What were the lavishly paid EU politicians and regulators watching over in that time?
To me this is another nail in the western industry players falling victims to their own short sighted greed coffin. If only there have been any past examples in history to serve as cautionary tales, cough, Kodak, cough. /s
Animats
> Their own poor decisions resulted in China eating their lunch.
China's approach was interesting. There was no giant state automaker, but about 70 of them. At one point, each province had its own auto industry. About like the US auto industry in 1910. There's been steady consolidation, or elimination of the losers. Mergers of China auto companies seem to be rare.
Then came BYD. BYD won by sheer competence. They got good at batteries. They figured out how to make lithium iron phosphate batteries take up less volume and charge faster with their "blade battery". Now they could make safe electric cars with reasonable but not great range.
Somebody at BYD had an insight - the E-Axle. The motor is mounted to the axle and differential, like a railroad locomotive bogie. The power train for a basic car or truck consists of an E-Axle, a battery, an electronics power box that handles motor, battery, and charging inputs. The electronics box talks CANbus to the dashboard and controls. Using those standard, mass-produced components, a wide variety of cars and trucks can be built. That got costs way down. Then BYD did some good car designs and got good at production.
The main government incentive was help on the charging infrastructure side. Also, it's been hard for years to get a registration to drive an IC car in Beijing. There's a very limited quota.
US companies are still trying to build gas cars with an electric power train substituted. This works but does not bring costs down. Tesla is electric-first, but has other problems.
The "Made in China 2025" plan [1], adopted in 2015, is now mostly complete.[2] After 2019, the government of China stopped publicizing the "Made in China 2025" in foreign media, but the plan continued to be executed.
South China Morning Post (2024): "The analysis found that China has met over 86% of the 260 targets under MIC25, achieving or surpassing goals in sectors such as EVs, renewable energy, robotics, and biopharmaceuticals. However, key targets in advanced photolithography, intercontinental aircraft, and new materials were missed, with new materials having the lowest completion rate at 75%"
It's an impressive success of long-term planning.
> their own short sighted greed coffin
The $100,000 pickup truck comes to mind.
[1] https://en.wikipedia.org/wiki/Made_in_China_2025
[2] https://rhg.com/wp-content/uploads/2025/05/Was-MIC25-Success...
olivermuty
While this is mostly true, a big missing context is that europeans simply didnt want to buy electric cars for a long time.
tibbydudeza
The Silverado will save the business - the problem is more the Fiat side of the business - Peugeot still makes good stuff - they would have been better off merging with Renault.
aussieguy1234
I guess this shows what happens if you're a car company and don't embrace new technology (electric cars specifically) fast enough.
This isn't a China problem. This is a Stellantis problem. Read the infamous letter from the organization of Stellantis dealers to the CEO.[1] That's from last September. The CEO was fired, but it didn't help much.
What's left of Chrysler is one minivan line. That's it.
[1] https://s3-prod.autonews.com/2024-09/Dealer%20letter%20to%20...