Stellantis Slashes European Capacity By 800,000

Stellantis put a hard number on the retreat now running through Europe's car industry. On 21 May, the world's fourth-largest carmaker, owner of Peugeot, Fiat, Jeep and Opel, set out a €60 billion turnaround plan that sends most of the money to North America and turns spare European factory space over to Chinese partners.

The plan, FaSTLAne 2030, shows where the economics now sit. Of the €36 billion set aside for brands and products, 60% goes to North America (CNBC). Jeep, Ram, Peugeot and Fiat take 70% of brand investment (Autoblog). Old European names such as Alfa Romeo, Lancia, Opel and Citroën are being pushed down into "regional" status: fewer models, less capital and no serious global brief (Stellantis Media).

Antonio Filosa, the chief executive, is presenting this as a survival plan. Stellantis recorded a net loss of roughly €20 billion in the second half of 2025 (FleetPoint), driven by €22.2 billion in write-downs, effectively admitting that cancelled EV platforms no longer carried the value once assigned to them (SEC filing). The recovery target is €190 billion in revenue and a 7% operating margin by 2030, meaning 7% of revenue left as profit after production costs are covered (StockTitan).

Why the Money Goes West

The American pull is not sentimental. It is built into the cost base, the tariff system and the return on capital.

Industrial electricity in the EU costs more than double the US price. Even French wholesale power, the cheapest among the large EU economies, was running roughly 52% above American levels in early 2025 (IEA, IEA Mid-Year Update). Germany and Italy pay more again.

Then there is the tariff wall. US tariffs of 25% on imported vehicles make local production the practical route into the American market. Stellantis is reopening Belvidere, Illinois for Jeep and expanding Toledo, Ohio for trucks, with a target of 80% US capacity utilisation by 2030 (CNBC). North American operations have typically delivered 8-10% operating margins, compared with 3-5% in Europe. The investment is following the difference.

Europe Becomes a Chinese Assembly Hub

In Europe, Stellantis is cutting 800,000 units of annual capacity while promising not to close factories. The answer is to keep plants standing but change who uses them.

In France, the Rennes factory is being opened to a joint venture with Dongfeng, a state-backed Chinese carmaker. The Poissy plant near Paris will lose its assembly line by 2028, putting 500-600 direct jobs at risk (Le Monde) and an estimated 6,000-8,000 more across the wider supply chain, according to the CGT union (BASTA! Media). In Spain, the Madrid plant is being transferred outright to Leapmotor, a Chinese EV maker (Cinco Días).

Italy shows the same pressure. Stellantis plants there ran at just 23% of capacity in 2025 (Il Fatto Quotidiano), and Giorgia Meloni's government is actively inviting Chinese manufacturers to fill the space.

Germany's Opel points to something beyond assembly. Stellantis is cutting Rüsselsheim's engineering centre from 1,650 to 1,000 engineers, a 40% reduction (Handelsblatt). The new Opel SUV will sit on a Leapmotor platform. Europe is not only losing production volume; it is losing part of the engineering work that used to justify the factories.

The Wider Supplier Retreat

Stellantis is the clearest case because it has put the strategy in plain sight. The same movement is visible across the supply chain.

German suppliers are cutting jobs on an industrial scale. Bosch plans 13,000 cuts by 2030, ZF is eliminating 14,000 by 2028 after a €2.1 billion loss in 2025, and Continental is cutting more than 10,000 positions (ad-hoc-news.de). An IG Metall survey found that 72% of German auto suppliers plan to delay domestic investment (Verbandsbüro).

The EU response still leans on grants and loans through programmes such as the Net-Zero Industry Act, which move more slowly than the direct tax credits that helped pull investment into the US (Cleantech Group). The original US consumer EV credits expired in September 2025 (NPR), but the tariff wall and the energy gap remain.

Spain alone expects to produce roughly 450,000 Chinese-brand vehicles a year by 2030 (El País). Those cars will carry "Made in EU" labels, avoid EU tariffs on Chinese imports and employ European workers on Chinese platforms, with Chinese engineering and Chinese cost structures. Europe is providing the labour and the tariff shield. The technology and the better margins are settling somewhere else.