Exterior Poured Basement Wall has concrete peeling off.

Call the contractor back to fix his work.

Uh, no! Get the crappy contractor back to fix his shoddy work. Why should you go through the expense? I have a house that was built in 1926 with stucco exterior. House is still standing with just minor repairs over the years, even after all the earthquakes. Find yourself a real stucco contractor. And get you money back from the old one. Do not tolerate sub par workmanship - ever.

I would call the contractor back and tell him the skim coat is falling off. If he won't make good and fix it, you can try scraping the skim coat off. Then you can try to apply another skim coat or put up stone. Depending on your DIY experience, you can do it yourself or you can call a mason and he'll be able to help you. I do have one question, is it coming off all over or just down low, like a weed wacker wire is chipping it off? That happened to a friend of mine. If that's the problem, most likely the contractor will not fix it for free. It could also be a moisture problem. If it's that, I would go with the stone because it will continue to happen. Personally, I like the stone. This is an example of what you could put on.

https://www.houzz.com/product/81410698-arctic-golden-quartzite-marble-splitface-ledger-panels-6x18-corner-10-pieces-traditional-wall-and-floor-tile

I agree with Naomie. Sounds like he didn't know what he was doing. If the wall had black tar you don't stucco over that. Nothing will hold. You need a wire mesh attached to the wall, then a scratch coat of mortar over the mesh, then the stucco mix.

I agree with Naomi on most of what she said, however, I would get my money back!!! I would not allow him to redo it!

I too have a poured concrete slab basement. On the front of the house, the former owner had river rock put on. To do that, it has to be backed with wire mesh like they used in the 50’s and 60’s bathrooms.

To do a stucco on the same slab material, either the mesh or hardware cloth must be used. If the tar is visible, that tells me that there is nothing for the stucco to adhere to.

I hope that makes sense for you.

Best of luck for you.