Stellantis, the house of automotive brands born earlier this year after a merger between Fiat Chrysler Automobiles and PSA Group (the former Peugeot S.A.), has announced a massive drive toward electrification across its entire portfolio. The target of $35.5 billion for spend over the next several years seeks bold results in new electric vehicle (EV) models, new software development and a transformation in battery technology.
Included in those plans over the next half-decade are bets on dual battery chemistries, as in a high energy-density option as well as one based on nickel cobalt-free technology. The company said it would also roll out solid-state battery technologies starting in 2026. The focus on solid-state batteries will surely raise some eyebrows, as it is a technology generally seen as superior to the conventional lithium-ion batteries currently powering today’s EVs, but one that is also significantly more expensive.
Notwithstanding any debate over which battery technology will surge ahead in the next several years, this decision by Amsterdam-based Stellantis certainly looms as a disruption for many of its brands. Besides the familiar (depending on which side of the pond you are) automotive brands such as Chrysler, Citroën, Dodge, Fiat, Jeep, Peugeot and Ram, Stellantis’ portfolio also boasts the likes of Alfa Romeo (of which a recent Giulia Quadrifoglio is shown above), Lancia and Maserati.
From the point of view of Stellantis, this shift toward EVs is not only about guessing consumer preferences or doing its part to push forward on climate action. The chips that Stellantis is putting on the table are about long-term profitability. The company’s quest for achieving double-digit adjusted operating income margins by mid-decade dovetails with a strategy based on increased electrification, the streamlining of its operations and distribution costs - and a drop in the price of battery technologies would also help the company reap higher margins.
Investors so far don't appear moved by this shift in strategy; shares of the company were priced at just under $19 yesterday after closing at $19.60 on Wednesday. But the race toward electrification will be a marathon or two, not a sprint.
While the company is bullish on new battery technologies, lithium-ion batteries are still part of the company’s plans for the long run; Stellantis said it has signed two memoranda of understanding (MOUs) with two lithium geothermal brine processors in North America and Europe.
Fans of the various brands managed by Stellantis will have to wait to see which models will emerge with an all-electric train, though the rebranding effort is already underway. Dodge’s new mantra, for example, will be “Tear Up the Streets… Not the Planet.” As for Maserati: “The Best in Performance Luxury, Electrified.”
According to CNBC, the upcoming changes at Stellantis will result in 55 newly electrified vehicles by 2025 across the U.S. and Europe, with 40 of them EVs and the other 15 plug-in hybrids. Dodge could see a “muscle car” rivaling the Charger by 2024; Ram will introduce an all-electric pickup that same year; Jeep is targeted to have a range of all-electric SUVs by the end of 2025.
Plans at Stellantis diverge somewhat from its main global competitors. Eschewing plug-in hybrids, GM has said it will eventually offer only all-electric vehicles. Ford is embarking on a similar path, symbolized by its all-electric Mustang Mach-E. Honda has said it would phase out all gasoline-powered vehicles by 2040. And Volkswagen has pledged that its cars in Europe will be all EVs by 2035, with a similar strategy for the U.S. market in the longer term.
Image credit: Łukasz Nieścioruk/Unsplash
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's worked an lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.