Stellantis warns on profit, citing global markets, China rivals

STORY: Investors hit the brakes on Stellantis Monday (September 30).

Shares in the car giant fell around 14% after it slashed annual forecasts, and warned it would burn through more cash than expected.

Stellantis blamed higher costs to overhaul its U.S. business, and Chinese competition on electric vehicles.

The Peugeot and Jeep owner isn't the only major European carmaker to warn on profits recently.

It joins rivals Volkswagen, which cuts its annual outlook for the second time in three months days ago.

While BMW and Mercedes have also lowered their outlooks.

The downgrades come as the European Union finalizes plans over possible tariffs on Chinese electric vehicles.

Stellantis said it was dropping expectations for positive free cash flow.

It now expects to burn through up to almost $11.2 billion in cash this year.

The company said it sees adjusted operating profit margin at 5.5% - 7% this year.

That's mostly due to its decision to speed up the normalization of inventory levels in the U.S.

The carmaker also said operating profit margin would be hit by lower than expected sales in the second half of this year across most regions.