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On Thursday, Big Three automakers Stellantis announced a sweeping 60 billion euro ($69.6 billion) revival plan that includes the introduction of 60 new models this decade.
Naturally, its New York-listed shares made only limited gains through the end of the week, while rival Ford, which made no major announcement, rose 9.2%. Waitthat? Shift into reverse gear for a moment.
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Markets and models
Stellantis reported a $26 billion loss last year related to its retreat from electric vehicles while also marking its unfortunate seventh consecutive year of declining sales. That has left investors looking to new CEO Antonio Filosa, whose appointment was announced almost a year ago, to find a turnaround plan.
In an announcement last week, Stellantis executives said 70% of investments over the next five years will go into the tanks of its high-profile Fiat, Jeep, Peugeot and Ram brands, and the Pro One commercial vehicle division, which have “the greatest potential for profitability.” The plan appears designed to address the uneven evolution of Stellantis: the company was formed from a 2021 merger between the French group PSA and Fiat Chrysler, the product of a 2014 merger between Italian and American automakers. Different markets will have different objectives, depending on demand and growth prospects. The company’s American brands, for example, will debut 11 new models and update a dozen more, and aim for a 35% sales increase in North America. Affordability will be a key focus, with nine vehicles priced under $40,000, including two Chryslers priced under $30,000. In Europe, the growth target is only 15%. Which doesn’t answer the question: What got people so excited about Ford?
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Earlier this month, Ford announced the launch of an energy subsidiary, including redeploying lithium-ion battery capacity from electric vehicles to build energy storage systems for U.S. data centers and utilities. Last week, a North American unit of French electric giant EDF Group signed on as its first customer.
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General Motors is pursuing a similar line of business and Tesla has had an energy business for years. Meanwhile, Stellantis agreed earlier this year to sell its stake in a Canadian battery plant to LG Energy Solution.
Expectations too high: In that context, it is not difficult to understand the muted reaction to Stellantis, whose Paris-listed shares fell 1.7% on the day the turnaround plan was announced and then gained 3% on Friday. Its growth targets are ambitious, as analysts expect global auto sales to rise only slightly in the coming years. Roland Berger estimates that they will increase an average of 1.1% annually until 2040, and that North America, Europe and Japan are close to “peak automobile.”
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