Stellantis CEO Vows to ‘Keep It Flat Out’ on EVs

Feb. 16, 2024
Despite a rocky second half to 2023, the company remains committed to its EV plans in time when others are pulling back.

“My answer is crystal clear: No. We keep it flat out.”

That was Stellantis N.V. CEO Carlos Tavares’ answer Feb. 15 when asked if the company had any plans to slow down its move toward electrification. After weeks of headlines about the slowing demand for electric vehicles and rivals General Motors Corp. and Ford Motor Co. reiterating that they will reduce their investments, Stellantis’ EV-friendly approach stands out.

The second half of 2023 was rough for the parent of Chrysler, Dodge, Fiat and more than 10 other brands, which was reflected in both its earnings statement and executives’ comments on the matter during their 2023 full-year report. In North America, profits fell 13% to $8.3 billion compared to 2022,  and its overall adjusted operating income (AOI) margin slipped to 12.8% in part because of the “costs of North American labor agreements and work stoppages, FX and warranty costs.”

In September, production idled at the manufacturer's Detroit plant for six weeks when United Auto Workers members went on strike for better conditions. The pay bump negotiated later in the fall means the company now must absorb more costs associated with its shift to electric. Executives have said previously that the strike cost the company more than $800 million in profits and $3.4 billion in potential revenue.

However, the report did not bring all bad news. North American battery EV sales were up 21%, which Tavares said was “ahead of plans.” Stellantis is also the top plug-in hybrid EV seller in the same region, with 136,000 units sold in 2023, double the previous year.

On the financial side, net revenue for Stellantis was $204 billion, up 6% year over year. Net profit also grew 11% to $20 billion.

Looking ahead to 2024, CFO Natalie Knight said executives see a “largely supportive” revenue backdrop. The company intends to “rev up” it BEV-offensive this year with 18 new all-electric models, eight of which will be for the North American market. Included in the lineup is the 2025 RAM 1500, Jeep Wagoneer S and Dodge Charger.

“We have a strong product portfolio lined up […] including not only this expanded EV lineup that addresses what were previously untapped segments, but also with updates to some of our most important ICE products.”

Financially, the company intends to deliver a double-digit AOI margin but cautioned that 2024 results would be subject to “significant headwinds” including a competitive market and a higher mix of Light EVs (LEVs), which are not yet as profitable their ICE counterparts.

Stellantis shares (Ticker: STLA) opened at $25.41 after reporting earnings and hit a midday high of $25.99 per share. Over the past six months, the price of shares have risen just over 40% from a low of $17.75. As of writing, shares are trading at $25.92 per share.

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