Stellantis Burns Through 4 Billion Euros in Third Quarter as Turnaround Push Continues

Stellantis reported a cash shortfall of 4 billion euros ($4.5 billion) for the third quarter, as the automaker pressed ahead with a large turnaround strategy meant to restore its profitability.

The owner of the Chrysler and Jeep brands said on Wednesday that third-quarter revenues rose 1% from a year earlier to 37.6 billion euros. Adjusted operating income climbed 184% to 256 million euros, compared with 90 million euros in the same period last year.

Negative industrial free cash flow came in at 4 billion euros, a slight improvement from 4.3 billion euros a year earlier. Stellantis shares rose 3.6% shortly after European markets opened, though the stock has fallen 62% since the start of the year.

The results come as the transatlantic company works through a 60 billion euro ($66.7 billion) turnaround strategy, following years of falling sales, particularly in North America. Stellantis reaffirmed its expectation of positive industrial free cash flow in 2027.

"During the quarter, we continued to make progress in the early execution of our FaSTLAne 2030 plan, launching new products, accelerating partnerships as planned, and delivering meaningful improvements in manufacturing and quality," CEO Antonio Filosa said in the report.

Filosa laid out the five-year plan in May, with the aim of reaching positive free cash flow by 2027. It includes 36 billion euros of investment across the company's automotive brands, with 60% of that money earmarked for the struggling North American business. Stellantis also intends to introduce new vehicles, refresh existing models and add new technologies to its products.

The pressure on Stellantis is part of a wider challenge for European carmakers in China, where domestic brands such as Xiaomi, BYD and Geely are gaining ground and sharpening competition. This week, German luxury carmaker Porsche said it would reduce its exposure to China as car sales in the region decline. Mercedes-Benz said its third-quarter car sales there slumped because of a "challenging market environment."

Earlier this month, Filosa told CNBC that European regulators need to do more to encourage carmakers to build vehicles in the region so they can fend off Chinese rivals. The CEO called for regulation that "incentivizes, rewards, and protects the ones that are able to demonstrate that they design cars, engineer cars."