This key Tesla rival has a $36 billion plan to win the electric-vehicle race. Here’s what you need to know
Stellantis, the world’s fourth-largest car maker, announced on Thursday that it would invest more than €30 billion ($36 billion) through 2025 as part of an ambitious plan to accelerate on the road to dominating in electric-vehicles.
In its first “EV Day,” Stellantis STLA,
Shares in Stellantis fell near 3.5% in European trading, while the U.S.-listed shares slipped near 3%, slightly outpacing broad declines across stock markets on Thursday.
Stellantis’ new targets include 70% of European sales and 40% of U.S. sales coming from low-emission vehicles by 2030, and sourcing EV batteries—which are expected to soon be in short supply—from five gigafactories in Europe and North America.
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The group’s plan for battery-electric vehicles—which are fully-electric, unlike hybrids, and widely viewed as the future of the sector—relies on developing four scalable EV platforms that can be rolled out across all 14 of its brands.
“The strategy we laid out today focuses the right amount of investment on the right technology to reach the market at the right time, ensuring that Stellantis powers the freedom of movement in the most efficient, affordable and sustainable way,” said Carlos Tavares, Stellantis’ chief executive officer, in a statement.
But according to a leading European electric-vehicle analyst, the group has a long way to go before winning the EV race in the region, and faces bumps in the road ahead.
Europe overtook China in 2020 as the world’s largest market for electric-vehicles, amid a pedal-to-the-metal push across the region to increase EV adoption with new fines over emissions targets for manufacturers and increased incentives for buyers. While China has taken back the top spot in 2021, Europe remains a critical market for global auto makers looking to sell more electric-vehicles.
As of the end of May, Stellantis was the second-largest EV group in Europe with nearly 17% of the market share, behind only Volkswagen VOW,
“There is a lot of talk about ‘electrified,’” said Matthias Schmidt, the publisher of the European Electric Car Report, but “that is a weak and broad term when it comes to pure electrification.”
The analyst told MarketWatch that Tavares indicated that Stellantis would hold on to profitable plug-in hybrid electric-vehicles and mild hybrids right up until 2030, instead of completely switching to fully-electric cars.
Moreover, Schmidt said Stellantis faces headwinds because it is dominant in markets that are unlikely to be the fastest in embracing all-electric vehicles.
“Stellantis’ exposure to markets that are ‘value for money markets’ is preventing a greater BEV rollout and missing those scaling potentials it has from its size,” Schmidt said. “One must not forget that Stellantis are perhaps more exposed to Southern European markets as well as Central and Eastern markets that are likely to be slower in moving in a 100% pure EV direction.”
Expectations were very high for Stellantis going into the EV Day. Ahead of the event, analysts at Swiss bank UBS UBS,
Hummel and his team noted that their focus was on Stellantis’ plans to electrify pickup truck offerings in North America, which is the segment that typically generates the group the most cash. While Stellantis outlined plans for an all-electric Dodge Ram by 2024, this would put it at least two years behind Ford, which plans for a 2022 electric F-150 truck.
“We think accelerating the timeline is crucial for Stellantis, especially in North America where several electric pick-up trucks are due to be launched over the next few quarters,” the UBS analysts said. “In Europe and China, BEVs from competition on dedicated platforms with superior range, performance metrics and ultimately lower production costs, increase the pressure on Stellantis to bring forward EV launches on next-gen platforms.”
