Did you know Stellantis sells 34 electrified vehicles globally now? Before Stellantis, its group of automakers were lagging behind the EV competition. Late CEO Sergio Marchionne, who ran FCA before it partnered with PSA Group, infamously told people not to buy the electric Fiat 500 because they lost money with every sale. Now, the current Stellantis group CEO Carlos Tavares has plenty of cars he’d be happy for you to buy, but the cost of EV manufacturing is still a headache.
Strong Results, Bonus For Union Workers
2022 Jeep® Wrangler Rubicon 4xe
Stellantis, which was created a year ago by merging Fiat Chrysler Automobiles and the PSA Group, reported strong earnings for 2021, in part because of the inflated costs, incentives and prices around all of the company’s electric vehicles, CEO Carlos Tavares pointed out in a conference call this week. A higher cost of manufacturing means higher sticker prices, and with demand high enough, more money is moving through the company as electric cars take off.
In the U.S., Stellantis’ unionized employees earned a bonus of $14,670 based on strong North American profits. That compares with $10,250 checks for General Motors workers and $7,377 for Ford workers. Tavares said of the Big Three, Stellantis also has the highest average transaction price for its vehicles in North America at $47,000. Reported net profit was $15.2 billion, almost tripling 2020 results, and doubling operating income to $20 billion, achieving a margin of 11.8 percent.
Manufacturing EVs Costs More
“The gorilla in the room is the cost of electrification,” Tavares said during a call with investors to report second-half and full-year 2021 earnings and confirm Stellantis’ commitment to electric vehicles.
It costs 40-to-50 percent more to build an electric vehicle than a traditional vehicle with an internal combustion engine, according to Tavares. It’s a cost that can’t be completely absorbed by the automaker if it ever hopes to turn a profit, nor can the full extra cost of manufacturing be passed onto the consumer in MSRP. Tavares says Stellantis must reduce internal costs, and bargain with suppliers that manage 85 percent of the vehicle parts chain.
EV Onslaught
Stellantis currently sells 34 electrified vehicles globally. Of them, 19 are battery-electric vehicles (BEVs) and the other 15 are plug-in hybrids that can go a short distance in electric mode but have a combustion engine as well. Current offerings include electric versions of the Fiat 500, the Opel Corsa, Mokka and Rocks-e, the Citroen C4 and Ami, the DS3 Crossback, the Peugeot 208, 2008, as well as a number of commercial vehicles.
The choices are far more limited in the U.S. There are two plug-in hybrids, the 2022 Jeep Wrangler 4xe and the Chrysler Pacifica minivan, with the 2022 Jeep Grand Cherokee 4xe about to hit the market. Europe has even more Jeep options with 4xe versions of the Compass, Renegade and Grand Commander. Tavares says there will be 17 more electrified vehicles coming in 2022 and 2023, though. They include 13 BEVs and four plug-in hybrids.
Positioned For Success
As the fourth-largest auto company in the world, Stellantis now has the size and ability to play with economics more. Stellantis is 30 percent more efficient than most of the competition, Tavares says, giving it a lower breakeven point. Last year reported strong financial results for the company, when the automaker only produced 6 million vehicles of its claimed 8 million production capacity. To Tavares point, if they made more cars, they would have made more money, and they have the capacity to do so going forward.
Tavares’ Stellantis has pushed all 14 of its automakers to establish target dates to go EV-only. By the end of 2023 the lineup will include a pure electric Jeep, expected to be a Wrangler, as well as a pair of new Maseratis.
The delayed Maserati Grecale SUV will now be unveiled in March and deliveries will now start mid-year. There will also be an electric Maserati GranTurismo headed to dealers in 2023. Maserati is getting a third car, but not for the street. As part of its all-EV future, the Italian automaker will also return to racing with an electric car to compete in Formula E in 2023.
Chrysler + Dodge Going Electric
Chrysler is planning its rebound and will be 100 percent EV from 2028, and the first electrified Alfa Romeo, the 2023 Tonale plug-in hybrid that has already been shown will go on sale in early 2023, with Alfa Romeo due to be all EV after 2027, Tavares says. Dodge will get the Hornet, a PHEV based on the Tonale, spy shots suggest. Following that, Dodge will get its first pure electric e-muscle car in 2024, and we’ll see that EV concept soon.
Europeans will get two more Citroen electric passenger cars and a CSX PHEV. Another electric Fiat is in the works, and that brand will also be 100 percent EV sales in Europe by 2027. Opel gets BEV and PHEV options for the Astra, and Peugeot adds the electric 308, 308 SW, and a C-segment crossover that is a plug-in hybrid. On top of that, more commercial vehicles are coming for most brands, including the Ram ProMaster van in 2023 with Amazon as the first fleet customer.
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