Oct 28, 2026 earnings call — VCP cost cuts and product launches
Stellantis reaffirmed 2026 guidance and reported net revenues of EUR 37.6 billion, with AOI margin improving to 0.7%.
Revenue $49.7B (est $47.0B) · EPS $-0.01 (est $0.25)
Key quotes
"Based on what we have implemented already, I am confident that we will exceed our plan to implement 40% of the initiatives comprising the €6 billion target by the end of this year."
"In the third quarter, we launched the Jeep Recon BEV and the Peugeot E-208 GTi, and we look forward to launching seven more products in the coming months on time, with the right cost, and with the right quality."
"Looking ahead, we expect a reverse of these working capital dynamics in Q4, supported by higher volumes, particularly in Europe, and a seasonal reduction in company inventory typically seen at year-end."
Analyst Q&A 7
Cash tied up and CapEx reasons
Q (Philippe Houchois · Jefferies): He asked how much working capital will reverse in Q4 and whether most of it is Europe. He also asked why CapEx fell so much year-over-year.
A: They expect Q4 will reverse working capital so full-year working capital is basically flat. The biggest driver is inventory: selling down OEM stock at year-end and seasonality of stopping production before Christmas. CapEx is consistent with the FaSTLAne plan and reflects a normal ramp-up of new product development, not a slowdown.
"We are expecting Q4, our reversal of free cash flow on working capital to basically have working capital for the full-year basically flat." — João Laranjo (CFO)
Industrial cost savings and U.S. finance
Q (Stuart Pearson · Oxcap Analytics): He wanted detail on how big the industrial cost tailwind from VCP and one-offs could be in Q4 and into 2027. He also asked whether the finance arm in the U.S. can grow or would need a partner.
A: They say VCP attacks product cost, manufacturing and logistics with thousands of people working on many initiatives, and they expect to exceed the €2.4 billion milestone for 2027 and the €6 billion run rate by 2028. They expect Q4 to multiply the savings and generate hundreds of millions of euros more. On financial services, U.S. required equity for 2027 is relatively limited and they expect to be able to grow and to start receiving dividends by 2028 or 2029.
"As we discussed during our FaSTLAne, the required equity on financial services in U.S. for 2027, it is relatively limited, especially when we see the total cash generation provided by all our financial services across the board." — João Laranjo (CFO)
Commodities and U.S. inventory plan
Q (Emmanuel Rosner · Wolfe): He asked what commodity headwind they now expect for the full year and whether that changed. He also asked how they will reduce U.S. inventory — by cutting production or by market share gains.
A: They expect commodities to be about 1% of revenue cost increase in Q3 and they are expecting the same 1% year-over-year cost increase for Q4; they see pressure from memory chips and are working on negotiations and alternatives. To reduce U.S. inventory they will balance production with demand and target dealer inventory of 320K-350K, keep strict net pricing discipline (North America added EUR 425 million versus last year), accelerate VCP savings and improve quality. They also plan product launches like the Ram Rebel Sport Truck (sold out in less than 24 hours) and the Ram ProMaster City to help volumes and profitability.
"In our guidance, we are expecting year-over-year for Q4, 1% of revenue cost increase on commodities." — João Laranjo (CFO)
VCP impact and below-AOI items
Q (Patrick Hummel · UBS): He asked how much VCP will add year-over-year to AOI in 2027 versus 2026 and whether raw material inflation will offset it. He also asked how recurring below-AOI items affect free cash flow guidance.
A: Free cash flow includes all P&L effects, including ongoing restructuring costs and lingering Takata recall costs. The €2.4 billion is a run rate of actions implemented by the end of this year and VCP is gross savings that does not include headwinds like raw materials and microchips. They will give more detail when they present the 2027 outlook and expect to enter 2027 with more than €2.4 billion of starting savings and build toward the €6 billion run rate by 2028.
"Our free cash flow obviously includes all aspects of our P&L, including restructuring costs, which is an ongoing effort to reduce the fixed costs." — João Laranjo (CFO)
Europe rules and customer reaction
Q (Thomas Besson · Kepler Cheuvreux): He asked if planned hybrid caps on Chinese imports and CO2 rule easing could ease competition in Europe and boost 2027 volumes. He also asked how production adjustments and higher rates or oil prices have affected customer behavior.
A: They welcome the hybrid cap step and want a level playing field, and they expect CO2 regulation flexibility and the Made in Europe rules could be approved next year. In Europe they see accelerating electrification and will start on the STLA One platform and switch many nameplates from NMC to LFP battery chemistry to reduce battery cost. In North America they see stable market demand but a shift to HEV and entry-level vehicles below $40,000; they plan product moves like two Chryslers below $29,000 and new range-extended options.
"We will also switch for many nameplates from NMC battery chemistry to LFP battery chemistry." — Antonio Filosa (CEO)
How to reach positive free cash flow in 2027
Q (Henning Cosman · Barclays): He asked how they will bridge from the 2026 exit working capital and other items to achieve positive free cash flow in 2027. He wanted the main moving parts.
A: They will balance volumes and production with demand, maintain strong net pricing discipline (North America net pricing added around EUR 425 million in Q3), accelerate product launches and VCP cost savings, and improve quality to lower warranty and recall costs. João clarified Q3 working capital was EUR -2.7 billion, year-to-date almost EUR 3.1 billion, and they expect full-year working capital to be almost breakeven with a sizable Q4 reversal; free cash flow should be better than prior year but they gave no specific 2026 number now.
"Based on our forecast right now, working capital for the full-year would be almost breakeven." — João Laranjo (CFO)
Concrete VCP examples that work
Q (Harald Hendrikse · Citi): He asked for two or three concrete examples of VCP packages that already work and drive profitability.
A: They gave specific examples: detailed wiring harness redesign and benchmarking to reduce material and connector cost; catalyst optimization to reduce use of precious metals while keeping performance; an AI-powered preventive maintenance tool that reduces equipment breaks and raises productivity; the Optima AI tool to reroute logistics daily; and insourcing hot stamping to save costs midterm. They invited visits to see VCP work in person.
"We do that by this study, and we do also that by benchmarking ourself to the same system, the wiring harnesses, that our most competitive competitors use." — Antonio Filosa (CEO)