Stellantis cuts 800,000 cars from European production

Stellantis, the world's fourth-largest carmaker and owner of Fiat, Peugeot, Opel, and Jeep, unveiled a five-year investment plan this week worth €60 billion. About $41 billion of brand investment, roughly 60%, goes to North America. European production capacity will be cut by more than 800,000 vehicles a year. Several of the factories that stay open are being converted into assembly lines for Chinese-designed cars.

The Profit Gap Driving the Pivot

Stellantis targets profit margins of 8–10% in North America against just 3–5% in Europe. American energy costs run about half of Europe's. US tariffs of 25% on imported cars make producing locally essential. The pull is so strong it survived the cancellation of the $7,500 EV consumer tax credit last September. The draw isn't subsidies. It's a structural cost gap that subsidies alone can't close.

In Europe, the company is shrinking. It aims to push factory utilisation (the share of capacity actually used) from 60% to 80% by 2030, which means fewer lines, fewer shifts, and fewer workers, even without a single factory officially closing. CEO Antonio Filosa promised no closures, but the pledge covers only 2026.

Chinese Partners In, European Engineering Out

What fills the emptied production slots tells the story. In Madrid, factory ownership has been transferred to Leapmotor, Stellantis's Chinese EV partner. In Zaragoza, Leapmotor will produce an electric SUV badged as an Opel from 2028. In Rennes, a joint venture with Dongfeng will assemble Voyah premium EVs alongside Citroëns. European workers, in legacy European factories, building Chinese-engineered vehicles.

Opel, Germany's most established mass-market brand, has been downgraded to a "regional" marque. Regional brands receive just 30% of brand investment; the four "global" brands (Jeep, Ram, Peugeot, Fiat) take 70%. And the plan says nothing about batteries. The ACC consortium shelved its planned gigafactories in Germany and Italy in February. With 29 battery-electric models planned by 2030, Stellantis will depend on Asian suppliers for the single most valuable component in every EV it sells.

Who Actually Pays

Italy is worst hit. Stellantis plants there ran at 23% utilisation; the Cassino factory operated just 19 days in Q1. The Fiom metalworkers' union reports 12,265 jobs lost since 2020. Italy remains the only major EU country without a single battery plant.

France faces a different bind. The Poissy plant near Paris will stop assembling cars after 2028, cutting roughly 900 of its 1,900 jobs. Normally a government might subsidise its way out, offering incentives to keep production domestic. But S&P, the credit rating agency, downgraded French sovereign debt to A+, which pushes up the government's own borrowing costs. That leaves Paris with less fiscal room to fight an industrial battle of this scale.

Poland is shedding 740 jobs in Tychy and 500 in Gliwice but wasn't even named in the plan. Germany's government, IG Metall, and the VDA auto lobby have all stayed silent on Opel's demotion. Spain and Portugal come out ahead: Mangualde already assembles eight electric models backed by €119 million in EU recovery funds. But winning means becoming an assembly site, not an engineering centre.

Not Just One Company

Investors aren't buying the turnaround story. Stellantis shares fell roughly 5% on announcement day. Of 107 planned vehicle launches, 39 are combustion or mild hybrid, a quiet bet that the EU's 2035 ban on new petrol and diesel cars may never fully arrive.

Stellantis is not acting in isolation. Bosch, ZF, and Continental, Europe's three largest auto suppliers, have each announced sweeping job cuts over the past year. What is disappearing is not one company's production map. It is the industrial base that employed a generation of European workers.