Stellantis CEO Hints at Potential Dividend Cuts Amid Challenges, as Shares Decline

Stellantis CEO Carlos Tavares on Thursday signaled that the automaker may consider reducing its dividends and share buybacks next year, following a steep drop in its share price.

This decline comes in the wake of a significant profit warning earlier in the week, stemming from difficulties in its U.S. operations, which Tavares described as a "small operational error."

Shares of Stellantis fell by 4%, hitting their lowest level since July 2022, as investors worry that the high costs of turning around the company’s U.S. business could jeopardize its typically generous shareholder returns. Monday’s profit warning has further eroded investor confidence in Stellantis’ management team.

Stellantis, which owns brands like Chrysler, Jeep, Fiat, Citroën, and Peugeot, has seen its shares plummet by more than 55% since March-marking the worst performance among European automakers. The company has lost 47 billion euros ($52 billion) in market value over this period.

Investors have been increasingly pulling away from European automotive stocks, concerned about the industry’s challenging shift to electric vehicles, heightened competition from Chinese automakers, and more cost-conscious consumers.