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Stellantis ready to kill brands and fix U.S. problems, CEO Tavares says

  MILAN — Stellantis is taking steps to fix weak margins and high inventory at its U.S. operations and will not hesitate to axe underperforming brands in its sprawling portfolio, its chief executive Carlos Tavares said on Thursday. The warning for lossmaking brands is a turnaround for Tavares, who has maintained since Stellantis was created in 2021 from the merger of Italian-American automaker Fiat Chrysler and France's PSA that all of its 14 brands including Maserati, Fiat, Peugeot and Jeep have a future. "If they don't make money, we'll shut them down," Carlos Tavares told reporters after the world's No. 4 automaker delivered worse-than-expected first-half results, sending its shares down as much as 10%. "We cannot afford to have brands that do not make money." The automaker now also considers China's Leapmotor as its 15th brand, after it agreed to a broad cooperation with the group. Stellantis does not release figures for individual brands, except for Maserati which reported an 82 million euro adjusted operating loss in the first half. Some analysts say Maserati could possibly be a target for a sale by Stellantis, while other brands such as Lancia or DS might be at risk of being scrapped given their marginal contribution to the group's overall sales. Stellantis' Milan-listed shares were down as much as 12.5% on Thursday, hitting their lowest since August 2023. That brings the loss for the year so far to 22%, making them the worst performer among the major European automakers. Few automotive brands have been killed off since General Motors ditched the unprofitable Saturn and Pontiac during a U.S. government-led bankruptcy in the global financial crisis in 2008. Tavares is under pressure to revive flagging margins and sales and cut inventory in the United States as Stellantis bets on the launch of 20 new models this year which it hopes will boost profitability. Recent poor results from global carmakers have heightened worries about a weakening outlook for sales across major markets such as the U.S., whilst they also juggle an expensive transition to electric vehicles and growing competition from cheaper Chinese rivals. Japan's Nissan Motor saw first-quarter profit almost completely wiped out on Thursday and slashed its annual outlook, as deep discounting in the United States shredded its margins. Tavares said he would be working through the summer with his U.S. team on how to improve performance and cut inventory.

Stellantis launching at least 25 EVs for America by 2030

Stellantis has announced a wide-ranging plan for the company through 2030 covering everything from product to financials. The product plans are what really caught our attention, particularly for the surprise reveal of the first electric Jeep, as well as new teasers of the electric Ram 1500. But the company also provided more broad details on what we'll be seeing in the future including both electric cars and hydrogen fuel cell vehicles. All of the plans are in service of the Stellantis goal of reaching net zero carbon emissions by 2038. On that way, it plans for all European vehicle sales and half of all American sales to be electric by 2030. It will launch 75 new electric vehicles by that year, and at least 25 of them will be coming to the U.S. The first of those electric cars will be the aforementioned Jeep in 2023, but many Stellantis models will follow close behind. The electric Ram ProMaster will launch in 2023 as well. In 2024, we'll see the electric Ram (and its plug-in hybrid counterpart), two more Jeeps (an off-road model and a family-oriented model) and the Dodge electric muscle car. We'll get a preview of the Dodge with a concept this year. Then in 2025, Chrysler will launch its electric car, likely based on the Airflow concept. Stellantis has previously announced Chrysler will be fully electric by 2028, and it further announced that Alfa Romeo and Maserati will be fully electric by 2030. Stellantis is also working on hydrogen fuel cell vehicles, mainly for commercial use. For the U.S., it plans on offering a large, ProMaster-size hydrogen van in 2025. That year or a little later, it also has plans for a hydrogen heavy-duty pickup truck, presumably Ram 2500 and 3500. Stellantis CEO Carlos Tavares noted that among the benefits of hydrogen for large and commercial vehicles is being able to avoid compromising payload capacity, since hydrogen powertrains are lighter than giant batteries. Hydrogen filling times are quick relative to charging, too. The company will continue working on and offering advanced driver aids. This year it will offer hands-free cruise control like GM's Super Cruise and Ford's BlueCruise. In 2024, the company intends to introduce a system that is hands-free and won't require the driver to be watching it the entire time. The technology is being developed alongside BMW. These are, of course, broad plans, and they could change as time goes on. Expect more details as we get closer to individual product releases.

EV cost burden pushing automakers to their limits, says Stellantis' CEO Tavares

DETROIT — Stellantis CEO Carlos Tavares said external pressure on automakers to quickly shift to electric vehicles potentially threatens jobs and vehicle quality as producers struggle with EVs' higher costs. Governments and investors want car manufacturers to speed up the transition to electric vehicles, but the costs are "beyond the limits" of what the auto industry can sustain, Tavares said in an interview at the Reuters Next conference released Wednesday. "What has been decided is to impose on the automotive industry electrification that brings 50% additional costs against a conventional vehicle," he said. "There is no way we can transfer 50% of additional costs to the final consumer because most parts of the middle class will not be able to pay." Automakers could charge higher prices and sell fewer cars, or accept lower profit margins, Tavares said. Those paths both lead to cutbacks. Union leaders in Europe and North America have warned tens of thousands of jobs could be lost. Automakers need time for testing and ensuring that new technology will work, Tavares said. Pushing to speed that process up "is just going to be counter productive. It will lead to quality problems. It will lead to all sorts of problems," he said. Tavares said Stellantis is aiming to avoid cuts by boosting productivity at a pace far faster than industry norm. "Over the next five years we have to digest 10% productivity a year ... in an industry which is used to delivering 2 to 3% productivity" improvement, he said. "The future will tell us who is going to be able to digest this, and who will fail," Tavares said. "We are putting the industry on the limits." Electric vehicle costs are expected to fall, and analysts project that battery electric vehicles and combustion vehicles could reach cost parity during the second half of this decade. Like other automakers that earn profits from combustion vehicles, Stellantis is under pressure from both establishment automakers such as GM, Ford, VW and Hyundai, as well as start-ups such as Tesla and Rivian. The latter electric vehicle companies are far smaller in terms of vehicle sales and employment. But investors have given Tesla and Rivian higher market valuations than the owner of the highly profitable Jeep and Ram brands. That investor pressure is compounded by government policies aimed at cutting greenhouse gas emissions. The European Union, California and other jurisdictions have set goals to end sales of combustion vehicles by 2035.