Stellantis Stock Falls As Fiat Chrysler Parent Details EV Moves To Catch GM, Tesla

Stellantis (STLA) detailed its strategy for electric vehicles Thursday, with the global EV market poised to boom this decade. Stellantis stock fell.


At the automaker’s EV day, management announced 30 billion euros ($35.5 billion) of investments in electrification and software through 2025.

Stellantis, formerly Fiat Chrysler, also sees more than 70% of its sales in Europe being “low emission vehicles” by 2030 and more than 40% in the U.S., with all 14 of its brands offering “electrified” models. Meanwhile, its battery electric vehicles will have ranges of 300-500 miles per charge.

The stakes are high for the Italian-American car giant. It’s seen lagging General Motors (GM), Ford Motor (F) and Volkswagen (VWAGY) that have rushed to bring their first all-electric SUVs, trucks and vans to market. And Tesla (TSLA) continues to dominate despite the proliferation of new EV stocks.

Ford’s F-150 Lightning quickly racked up more than 100,000 reservations after launching in May. It arrives at dealers in the summer of 2022. And the electric Ford E-Transit commercial van, arriving later this year, has more than 20,000 reservations. Reservations for GM’s initial Hummer EV pickup trucks and SUVs also sold out rapidly.

On Thursday, Stellantis revealed that Dodge, known for muscle cars, will launch a battery electric vehicle in 2024, when a Ram 1500 battery electric truck will also come out. The Jeep brand will have a battery EV in 2025, and Fiat is going full BEV in Europe by 2025-2030. It also plans to deliver hydrogen fuel cell medium vans by the end of 2021.

The automaker also sees five gigafactories in Europe and North America to support battery and EV component needs. Four EV platforms with flexibility and component sharing are part of the company’s plan for total cost of ownership of EVs to be equivalent to internal combustion engine vehicles by 2026.

By 2024, the company plans to offer a high energy-density battery option and a nickel cobalt-free option. And by 2026, Stellantis is targeting a solid-state battery technology.

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Stellantis Stock Falls

Shares fell 3% to 19.02 on the stock market today. Ahead of the EV day, the company said adjusted operating margins in the first half of the year will top the annual target of 5.5%-7.5%, despite lost production from the global chip shortage. It also projected negative industrial free cash flow in the first half but positive cash flow for the whole year as synergies from the merger are exceeding targets.

By around 2026, management is targeting double-digit adjusted operating margins with a steady state of more than 5 billion euros in annual synergies.

Stellantis stock cleared an 18.62 flat-base buy point in May but is now pulling back to the 50-day line, according to MarketSmith chart analysis. The relative strength line is just below June highs after rallying in the past year.

GM stock fell 2% Thursday, Ford stock lost 2.7%, VW sank 4.7% and Tesla eased 1.6%.

After years of sluggish sales, the adoption of electric vehicles is at an inflection point.

The number of electric cars, buses, vans and trucks on the world’s roads will hit 145 million by 2030, the International Energy Agency estimated in April. That would be up from 10 million in 2020, a year that saw EV sales increase though overall sales fell due to the coronavirus pandemic.

In April, CEO Carlos Tavares vowed Stellantis is accelerating on electrification, committing to an all-electric or hybrid-electric version of almost its entire lineup of vehicles by 2025.

Stellantis’s Fiat brand has already signaled switching to an all-electric lineup by 2030. The luxury Alfa Romeo and Maserati brands are expected to follow.

Find Aparna Narayanan on Twitter at @IBD_Aparna.


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