The Premium Italian Tire Maker Still Manufacturing for Russia's War Machine
On June 4, 2026, Grizzly Research published a short report on Pirelli & C. S.p.A. (BIT: PIRC), the €6.7 billion Italian tire maker and Formula 1's exclusive tire supplier. After Russia's invasion of Ukraine, every other major Western tire manufacturer — Nokian, Michelin, Continental, Goodyear, and Bridgestone — exited Russia and accepted major write-downs. Pirelli alone stayed, telling investors it would halt investment in Russia 'except for spending linked to security.' Grizzly's months-long investigation, drawing on Russian corporate filings, satellite imagery, local-government publications, and an undercover operation in which its researchers asked to buy tires for a Russian military unit fighting in Ukraine, concludes that Pirelli's Russia business is far larger, far more strategically compromised, and far more entangled with the Russian military-industrial complex than investors have been led to believe.
Epistemic note. Grizzly Research's analysis draws on Russian corporate filings, Pirelli's public disclosures, satellite imagery, local-government publications, and undercover communications with Pirelli's Russian hotline and a dealer in occupied Donetsk. Its characterizations of Pirelli's disclosure practices, its proximity to Russian military production, and its Kremlin ties are the opinions of a short seller with a disclosed financial interest in the stock's decline. None of this has been verified by The Forensic Ledger, adjudicated by a regulator or court, or admitted by Pirelli.
The true size of the Russian business
Pirelli's public disclosures imply its Russian operations are far smaller than Russian filings suggest. From FY 2023 onward, Pirelli discontinued its standalone 'Activities in Russia' disclosure; in its FY 2024 annual report, Russia was folded into a broader 'Russia and Middle East, Africa and India' line item — a grouping Grizzly calls geographically and operationally incoherent, since Pirelli has two tire factories in Russia and none operating in the Middle East, Africa, or India. Pirelli reports only about 6% of revenues from the combined region. But Russian filings Grizzly obtained indicate roughly 10% of Pirelli's net profits come from its Russian operations — a gap the firm reads as deliberately narrowed disclosure.
A former Big Four auditor with 17 years' experience at Russian subsidiaries of Western multinationals told Grizzly: 'In my experience, disclosure that narrows without explanation almost always tells you the underlying numbers moved in a direction management would prefer not to highlight.'
The Kirov complex and the military next door
Pirelli's Kirov tire factory operates in an industrial complex that also houses a Russian state-owned tire producer controlled by a military research institute — the same institute that holds a 25% stake in much of Pirelli's Russian business. When Pirelli co-owned the Kirov Tire Factory with Rostec, Russia's state-owned defense conglomerate, the plant produced tires for the Russian military. That military business was formally transferred to full Russian state ownership, but the plant sits next to Pirelli's own Kirov factory and, according to Russian local-government publications and Grizzly's investigation, continues to rely on Pirelli's infrastructure to produce tires for Russian military vehicles — including the RS-24 Yars nuclear-warhead launcher and vehicles widely used in the invasion of Ukraine.
Through its 25% corporate stake in Pirelli's two Russian factories, and through the Kirov plant's co-location on the same industrial complex, Russia is positioned to gain access to Pirelli's high-tech tire production technology — a class of technology essential to the Russian military. Pirelli once even enjoyed a monopoly on supplying the Russian military: Russia's Federal Antimonopoly Service found the Ministry of Defense violated Russian law by limiting a public tender to specific tire models that, within Russia, were produced only at Pirelli's factories.
The Panaland question and deeper state influence
Russian state influence over Pirelli in Russia may run deeper than the formal 25% stake suggests. The only other minority shareholder, JSC Panaland, holds 9.995% of Pirelli Tyre Russia, uses the Research Institute's domain for its corporate email, and is incorporated at the same address as the entity through which Russia holds its stake. Two people connected to Panaland have close ties to Rostec.
Kremlin ties and sanctions exposure
Grizzly documents what it calls Pirelli's close relationships with the Kremlin. In May 2014 — two months after Russia's annexation of Crimea — Rosneft chief and longtime Putin ally Igor Sechin bought 13% of Pirelli for €552.7 million, signing the documents in Putin's presence. Pirelli's 2017 calendar featured Anastasia Ignatova, the stepdaughter of Rostec chief Sergey Chemezov; EU officials cited Ignatova's appearance in the prestigious high-fashion calendar as part of the evidence supporting their refusal to lift sanctions on her.
The firm found a Pirelli dealer in Russian-occupied Donetsk listed on Pirelli's website — an apparent violation of EU sanctions. Based on Grizzly's communications, the dealer still operates and serves the Russian military invading Ukraine. When Grizzly's researchers asked to buy tires for a Russian military unit fighting in Ukraine, Pirelli's Russian hotline shared a non-public email for placing the order.
The €470 million exit problem
Pirelli invested €470 million in Russia. Because of applicable Russian laws, Pirelli would recover only a fraction of that on any exit — a financial trap that, combined with the profit contribution, helps explain why the company has stayed while every peer left.
What would falsify this thesis
Falsification would look like: Pirelli restoring a standalone Russia disclosure and reconciling its reported profit contribution to the 10% implied by Russian filings, with a credible arms-length explanation; independent verification that the Kirov military tire plant operates without any reliance on Pirelli infrastructure or technology transfer; Pirelli removing the occupied-Donetsk dealer and demonstrating no product reaches Russian military end-users; and the Panaland/Rostec ties being formally explained and found to be non-controlling. Conversely, further narrowing of disclosure, confirmed technology transfer to the military complex, or EU sanctions enforcement action against Pirelli would corroborate the thesis.
Grizzly Research's disclosed position
Grizzly Research disclosed holding a short position in Pirelli and stated it stands to profit if the share price declines.
Source
- Grizzly Research — Pirelli: Manufacturing for Russia's War Machine (report page)
- Grizzly Research — Pirelli Report PDF
⚖️ Editorial Disclaimer
This article summarizes with citation a research report already published by Grizzly Research. The Forensic Ledger is an independent newsroom and archive; it is not the author of the underlying allegations and does not adopt them as established fact. All figures, characterizations, and conclusions attributed to the report — including the Russia profit-contribution estimate, the Kirov military-complex findings, the Panaland/Rostec ties, the Kremlin-relationship allegations, the sanctions-exposure claims, and the undercover dealer findings — are the opinions of a third party (Grizzly Research) that discloses a financial interest in the decline of the covered security. They have not been independently verified, have not been adjudicated by any court or regulator, and may be denied or disputed by Pirelli & C. S.p.A. This article is published for informational and journalistic purposes only, is not investment advice, and is not a recommendation to buy, sell, or hold any security.
Original reporting by Grizzly Research. This article is desk analysis prepared by The Forensic Ledger from publicly available sources, summarized with citation to the original.
Not investment advice. This is original reporting and analysis prepared by The Forensic Ledger from publicly available data. Nothing here is a recommendation to buy, sell, or hold any security. Always consult the original source and a licensed professional. See our full disclaimer and source-citation policy.
