Last Friday, Switzerland briefly staged a rehearsal for spring.
Sunlight flooded the lake, terraces filled within minutes, sunglasses appeared as if distributed by emergency services. For a few hours, the country behaved as though winter had been officially cancelled. Meteorologically, perhaps premature.
Financially, perfectly accurate.
For those who follow companies rather than pollen counts, spring begins when earnings season starts. And this year’s season feels less like renewal and more like a hangover.
The calendar did not move, reporting did
Thirty years ago, annual results arrived slowly. Printed reports appeared sometime between March and May after weeks of consolidation, adjustments, and quiet negotiations with auditors.
Today, preliminary results are published in January, full statements in February, guidance updates immediately thereafter. Management teams apologize if numbers are not ready on time, as if profitability were a train schedule.
The planet did not accelerate. Software did.
ERP systems, automated consolidation tools, real time dashboards, and continuous auditing transformed finance departments into control towers. Closing the books no longer requires heroic effort. It is increasingly a technical exercise.
Spring, in corporate terms, now arrives as soon as the databases reconcile.
Earnings season reveals yesterday’s decisions
What makes earnings season interesting is not the recent quarter. It is the delayed visibility into decisions made years earlier.
This year, one theme dominates the financial cost of the electric vehicle transition.
For more than a decade, car manufacturers were pushed by regulation, investors, and public narratives to electrify aggressively. New platforms, battery plants, software capabilities, factory conversions, acquisitions, and partnerships consumed tens of billions.
To their credit, they invested. Now they are recognizing the cost.
Ford’s electric division has accumulated very large losses as the company scaled production ahead of profitable demand. General Motors has taken significant charges related to battery investments and restructuring. Across the industry, projects are delayed, targets revised, and capital reallocated.
Then came the shock.
The Stellantis reset
Stellantis, the group behind Peugeot, Fiat, Jeep, Chrysler, and several other brands, announced roughly 22 billion euros in charges linked largely to scaling back electric vehicle ambitions and restructuring capacity.
Investors did not hesitate.
The stock collapsed by about twenty five percent in a single trading session, one of the most severe one day declines in the company’s history since the merger that created the group.
In plain terms, the company acknowledged that it had built for a future that did not arrive on schedule.
And it is far from alone. Across the sector, cumulative write downs linked to overestimated electric demand exceed tens of billions globally. What appears sudden is the accounting recognition of tensions that have been building for years.
When everyone loads the boat at once
What is striking is not only the magnitude of these charges but their simultaneity. It almost appears as if manufacturers collectively decided to overload the boat with bad news in the same season. There is no coordination. Only shared conditions.
Regulatory pressure intensified across major markets at roughly the same time. Capital was abundant at the same time. Forecasts assumed rapid adoption at the same time. When inflation rose, infrastructure lagged, subsidies shifted, and consumers hesitated, balance sheets adjusted at the same time.
Accounting is not synchronized by design. It becomes synchronized when assumptions fail simultaneously. Markets interpret collective disappointment differently from isolated failure. If one company disappoints, it suggests poor management. If all companies disappoint, it suggests structural miscalculation.
The shareholder lesson no one enjoys
Spare a thought for Stellantis shareholders. In a single session, about a quarter of the company’s value evaporated. But sympathy should not obscure responsibility.
When you buy shares, you are not purchasing a savings product. You are underwriting a strategy.
Management had been explicit about electrification plans, capital commitments, and timelines. Investors chose to believe the vision or at least to believe that markets would reward it.
That belief is not the CEO’s responsibility. It is the shareholder’s.
Equity ownership requires homework. Is the strategy economically sound. Are the assumptions realistic. Are competitors confirming or contradicting the narrative. Are early indicators improving or deteriorating.
In this case, warning signs were visible.
Premium manufacturers had already begun signalling difficulties. Porsche warned that electric demand and margins were weaker than expected. Mercedes Benz also softened its outlook, emphasizing that the transition would be slower and that hybrid technologies would remain necessary longer than previously assumed.
The canaries were not subtle.
Investors who ignored them were not blindsided by unforeseeable events. They simply preferred the story to the data.
The role of the CEO and the role of the investor
Corporate strategies are presented as coherent narratives because capital markets demand clarity and confidence.
But a strategy presentation is not a guarantee. It is a proposal.
The CEO’s job is to articulate a vision, mobilize resources, and persuade stakeholders that the plan will succeed. Persuasion is part of leadership.
The investor’s job is different. It is to decide whether to accept that vision or to test it independently.
After large losses, the instinct is to blame management. Yet leadership changes are consequences of failed strategies, not remedies for investor complacency.
If a strategy proves flawed, markets react, boards intervene, executives eventually depart. The system is functioning as designed. Replacing the messenger does not change the underlying economics.
Shareholders are principals who delegated execution while retaining the financial risk. If the strategy fails, the loss is the price of that delegation.
Why the surprise is surprising
Public reactions still oscillate between shock and indignation. How could they have misjudged so badly.
But industrial transformation unfolds on long time horizons. Vehicle platforms, battery plants, supply chains, and regulatory compliance cannot pivot at software speed.
Rome was not built in a day. Nor is an industrial base rebuilt in one.
The investments now being written down were approved under very different conditions cheap capital, stable energy assumptions, generous incentives, and widespread belief that adoption would be rapid and linear.
Reality rarely follows linear projections. Consumers remain price sensitive. Infrastructure expands unevenly. Geopolitics interferes. Competition intensifies.
Strategy collided with economics and human behaviour.
The Tesla benchmark everyone forgets
There is also a selective memory at work.
Tesla, now treated as the inevitable winner of electrification, spent roughly seventeen years between its founding in 2003 and its first sustained full year profit in 2020.
Seventeen years of capital consumption, production crises, funding challenges, and scepticism.
Even the most successful electric vehicle company required patience measured in decades.
Expecting incumbent manufacturers burdened with legacy factories, Labor agreements, dealer networks, and regulatory obligations to transform profitably within a few years was always ambitious.
Strategy moves at industry speed
Different industries operate on very different time scales.
Retail moves fast. Inventory purchased today must sell within months. Companies like Zara built dominance by compressing the design to store cycle to a few weeks, allowing rapid adaptation to demand.
Automotive moves slowly. Developing a new platform can take five years or more. Factories, supply chains, and regulatory approvals lock in decisions for a decade.
Heavy industry strategy is long duration capital allocation disguised as product planning.
The trillion dollar reality check in technology
The hangover is not confined to car manufacturers.
Large technology companies are reporting strong results and still losing market value. Alphabet, Microsoft, Amazon and other cloud giants continue to generate enormous profits, yet investors have become uneasy about the scale of spending required to build artificial intelligence infrastructure.
Collectively, the largest technology firms have lost well over one trillion dollars in market capitalization from recent highs as markets reassess whether massive capital expenditures on data centers, chips, and energy will produce commensurate returns.
This is not a collapse of earnings. It is a repricing of expectations.
Companies that dominate today’s software economy are being valued against a future in which artificial intelligence could reshape pricing, productivity, and competitive advantage. The concern is not that they are weak, but that even they may not control the next phase of the industry.
The paradox of success
Investors increasingly fear not current weakness but future disruption.
Cloud providers dominate today’s software landscape, yet artificial intelligence could alter economics, automate high value work, and compress margins across entire sectors.
Companies may end up providing infrastructure while losing control of the applications where profits are generated.
The disruptor of tomorrow may already be embedded inside today’s winners.
Markets discount that possibility long before it appears in income statements.
A broader recalibration
Put together, the pattern becomes clear.
Automakers are confronting the cost of premature electrification bets. Technology firms are confronting the cost of massive AI investments. Capital is no longer free. Geopolitics is unstable. Narratives are being tested against arithmetic.
This is not panic. It is recalibration.
Illusions rarely collapse gradually. They dissolve when confronted with numbers.
What write downs really mean
Large impairments are not simply signs of failure. They are acknowledgements that previous assumptions were too optimistic.
Assets on a balance sheet represent expectations about future cash flows. When those expectations change, accounting forces adjustment.
Goodwill impairments are particularly revealing. Goodwill arises when companies pay more for acquisitions than the identifiable value of assets, effectively paying for anticipated synergies and growth.
Writing it down is a polite way of saying the future did not materialize as expected.
Optimism is booked at acquisition. Reality is booked later.
Spring as disclosure season
So yes, last Friday felt like spring.
But not because of temperature.
Because earnings season had begun to thaw the narratives of recent years.
Sunlight makes people optimistic. Financial statements make them honest.
The numbers emerging this season do not signal collapse. They signal the end of a period in which technological transitions were assumed to be fast, linear, and painless.
Industrial change is slow. Capital cycles are unforgiving. Consumer behavior is stubborn. The future refuses to arrive on schedule.
Spring may bring flowers.
It also reveals what did not survive the winter.
Eric Lefebvre
Read also: The speed of light and the speed of AI
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