Stellantis Talks of New Jeeps, Maintaining Profits Amid BEV Times

Stellantis reaffirms its 2024 guidance during presentations to investors and clarifies new Jeep plans.

David Kiley, Senior Editor

June 14, 2024

4 Min Read
Stellantis’s strategy for staying profitable while transitioning to electrification is to emphasize best-in-class metrics on vehicles such as Wagoneer S.

AUBURN HILLS, MI – Stellantis CEO Carlos Tavares is charting a strategy no other auto industry head is undertaking. With 14 brands, plus the Leapmotor Chinese brand in which the company is invested, the Portugal-born CEO is trying to be everything to everyone.

It’s a big challenge. While Ford and General Motors have sold off or dialed back European and Australian operations and cut back in South America, Stellantis intends to stay and be everywhere, using its 14 brands to create “local heroes” around the world, whether it’s Peugeot in France, Fiat in Italy or Jeep and Ram in North America.

Over a two-day investor event at the company’s North American headquarters, though, Tavares admits to his own “arrogance” in letting a crush of problems hurt the company last year, resulting in high inventories, a drop in market share and a go-to-market operation that he is revamping with new people and processes.

Still, he’s being a bit hard on himself, maybe. After all, Stellantis posted €18.6 billion in net proifit last year, and adjusted operating income of €24.3 billion. Not bad for a year of colliding problems as he describes.

Even with the increased costs of electrification investments and pricing pressure impacting all automakers as consumers delay battery-electric-vehicle purchases and struggle with affording new vehicles across the board, Stellantis reinforces its 2024 guidance, including an adjusted operating income margin of 10% to 11% in the first half and "industrial free cash flows visibly below the prior year period."

A New Cheaper Jeep

Building its case with Wall Street for its near-term product vision and BEV strategy, Stellantis confirms a new, more affordable Jeep Renegade starting at just under $25,000 when government tax credits are factored in, produced on a new EV platform and launching by 2027. The Jeep Compass is also getting a remake by 2027. And there is a new, unnamed midsize Jeep with an electric variant also expected by 2027, probably to be called the Cherokee.

Tavares emphasizes that Jeep is the brand in the stable that can and should go anywhere in the world, and can be a local hero brand in emerging markets that have no homegrown auto industry—Africa for one, as well as the Middle East where Stellantis is investing for market share.

Tariffs Aplenty

Stellantis is deeply affected by the growing appetite for tariffs in the European Union and North America designed to limit the impact of Chinese BEV makers on both continents.

Indeed, Stellantis’ investor-day presentations come one day after the EU, one of the company's largest markets, said they would impose duties of up to 38.1% on imported Chinese electric vehicles starting next month.

The U.S. has jacked up tariffs as well. The Biden Admin. last month raised U.S. import tariffs on Chinese BEVs to 100% from 25%. Tariffs on batteries were raised to 25% from 7.5%.

Stellantis, previously Fiat Chrysler Automobiles, is benefiting from a methodical multi-energy propulsion strategy it began charting back in 2019. The strategy was to not go all-in on BEVs but have platforms and plants that could easily flex to produce BEVs, PHEVs, HEVs and ICE vehicles depending on demand from consumers as automakers worked to satisfy clean-air and fuel-economy mandates and regulations. It was risky given the EU’s and U.S.’s great emphasis on going “all electric.”

The slowdown in consumer demand for BEVs, says Tavares, was predictable. The CEO says the transition to 100% BEVs in EU countries and 50% of new-vehicle sales in the U.S. cannot happen without creating affordable choices for the “middle classes,” and expanding the public charging infrastructure. Jeep has the two leading PHEVs in the U.S. and four of the top five PHEV models, the CEO notes, while his crosstown rivals, GM and Ford, as well as European rival Volkswagen, are scrambling to develop PHEV models they see as a needed bridge to consumers adopting full BEVs.

Tariffs are being put in place on BEVs because of the gap in competitiveness between western and Chinese automakers, notes Tavares. He says Stellantis’ brand portfolio and flexible platform strategy will bring its cost structure on BEVs to parity with ICE vehicles faster than its rivals, and that tariffs are neither predictable nor to be counted on long-term because of changing political environments.

The CEO scolds, or at least challenges, policymakers who have been forcing automakers to chase BEVs to the exclusion of other technologies. “Did they have an impact study when they made these policies?” Tavares asks rhetorically. They did not. The CEO complains that the policies took no account of the impact on workers, worker training, education or consumer affordability.

“Consumers are also voters,” notes Tavares, and they are being heard.

About the Author(s)

David Kiley

Senior Editor, WardsAuto

David Kiley is an award winning journalist. Prior to joining WardsAuto, Kiley held senior editorial posts at USA Today, Businessweek, AOL Autos/Autoblog and Adweek, as well as being a contributor to Forbes, Fortune, Popular Mechanics and more.

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