Stellantis N.V. (FR:STLAP) (STLA) announced that it will continue to halt the production of electric Fiat 500 amid weak demand for EVs (electric vehicles) in Europe. The company has extended the production suspension from the previous date of October 11 to November 1.
Stellantis is a global automotive manufacturer, marketing its products in 130 locations worldwide. The company’s shares are listed on the New York Stock Exchange, Euronext Milan, and Euronext Paris.
Poor Demand Forces Stellantis to Extend Output Pause
Stellantis believes the electric car market in Europe is in serious trouble. The company is facing intense competition from Chinese EV manufacturers along with a slowdown in EV demand.
Despite the temporary suspension of production, Stellantis reaffirmed its commitment to invest €100 million in the Fiat 500e, featuring a high-performance battery. Additionally, production of the new 500 Hybrid is set to commence in early 2026.
Stellantis Cuts FY24 Projections
Yesterday, Stellantis warned of higher cash burn and cut down its FY24 forecast. The company now expects an adjusted operating profit margin of 5.5% to 7% for the year, down from its previous guidance of a “double-digit” margin. Additionally, it expects to burn cash between €5 billion and €10 billion, in contrast to its earlier forecast of generating positive free cash flows.
Is Stellantis a Good Stock to Buy?
According to TipRanks’ rating consensus, STLAP stock has a Moderate Buy rating based on nine Buy, seven Hold, and two Sell recommendations. The Stellantis share price target is €19.87, which shows 58.45% upside potential at the current price level.
Year-to-date, Stellantis shares in Paris have declined by 41%.
