Stellantis, the conglomerate formed by the merger of PSA and FCA, has announced a significant shift in its electric vehicle (EV) strategy. The move is expected to cost the company €17 billion, a substantial blow to its revenues. The change in strategy reflects the company's over-estimation of the pace of the energy transition and the real-world needs, desires, and budgets of car buyers. The company's announcement comes after similar setbacks experienced by its competitors, Ford and General Motors (GM). Ford recently cancelled its F-150 Lightning electric pickup, while GM has taken a similar-sized hit due to revised sales projections. Stellantis' CEO, Antonio Filosa, attributed the charges to the company's failure to accurately forecast the demand for EVs and the associated costs. The shift in strategy has significant implications for Stellantis' operations, including the cancellation of electric models and the re-engineering of petrol-powered alternatives. The company has also had to pay ...
Stellantis, the conglomerate formed by the merger of PSA and FCA, has announced a significant shift in its electric vehicle (EV) strategy. The move is expected to cost the company €17 billion, a substantial blow to its revenues. The change in strategy reflects the company’s over-estimation of the pace of the energy transition and the real-world needs, desires, and budgets of car buyers.
The company’s announcement comes after similar setbacks experienced by its competitors, Ford and General Motors (GM). Ford recently cancelled its F-150 Lightning electric pickup, while GM has taken a similar-sized hit due to revised sales projections. Stellantis’ CEO, Antonio Filosa, attributed the charges to the company’s failure to accurately forecast the demand for EVs and the associated costs.
The shift in strategy has significant implications for Stellantis’ operations, including the cancellation of electric models and the re-engineering of petrol-powered alternatives. The company has also had to pay off suppliers for cancelled orders and has incurred extra warranty costs, partly due to changes in the way these costs are accounted for.
Stellantis’ struggles with EVs are not unique to the US market, where Biden-era incentives for EVs have been reversed in the Trump administration. The company’s European operations have also experienced similar challenges, with the Fiat 500 and Vauxhall models being delayed or modified to accommodate changing market conditions.
The company’s decision to keep its sprawling operations intact has been met with criticism from some investors, who have called for a split or sale of parts. However, Filosa has stated that he intends to keep the group together for the foreseeable future.
The shift in Stellantis’ EV strategy highlights the challenges faced by the automotive industry in adapting to changing market conditions and consumer preferences. As the company navigates this new landscape, it will be crucial to strike a balance between investing in emerging technologies and managing costs and revenues.
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