By Al Root
Shares of Chrysler parent Stellantis fell early Monday after BofA downgraded shares to Sell from Hold, citing pressure from China. Stellantis has a plan to deal with that pressure.
Monday, BofA downgraded shares of the auto maker due to competition from Chinese auto makers in Europe, according to Wall Street ratings aggregators. Barron's hasn't seen a copy of the report yet. The broker's target price went to EUR5.50 ($6.48) from EUR7.50 ($8.80).
Stellantis stock was down 0.9% in overseas trading at EUR6.46, while S&P 500 and Dow Jones Industrial Average futures were down about 0.1%.
Concern about Chinese auto makers is well-founded. More Chinese-branded cars are being sold in Europe. Through March, Chinese electric-vehicle leader BYD sold about 74,000 cars in Europe, up 155% year over year. BYD has only 2% of the total market, but it has captured 10% of the European EV market, up from 5% a year ago.
All-electric cars account for roughly 20% of total European car sales.
Stellantis, however, has a plan to compete: If you can't beat them, join them. The auto maker invested in Chinese EV maker Leapmotor in 2023. On Friday, Stellantis announced its Villaverde, Madrid plant would manufacture Leapmotor products for European and global markets.
"This plan...is expected to support production and advance localization in Europe of world-class manufacturing of electric vehicles at affordable prices to meet customers' real-world needs," said Stellantis CEO Antonio Filosa in a news release.
Filosa took the reins at Stellantis less than a year ago after former CEO Carlos Tavares resigned in December 2024, following deteriorating profitability caused in part by sky-high North American dealer inventories, which reduce wholesale production and pressure pricing.
Filosa has made some bold, yet painful moves. Stellantis stock plunged 24% on Feb. 6 after announcing a bevy of charges, including EUR22 billion euros ($25.9 billion) for electric-vehicle asset write-downs and warranty-related items. The company also suspended its 2026 dividend and added debt to shore up its balance sheet.
Making Chinese-branded cars in Europe is another bold step. BofA just isn't sure how it will go.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 11, 2026 07:51 ET (11:51 GMT)
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