# Stellantis makes 30 billion euro wager on electric vehicle market
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-07-08
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Stellantis plans to invest over £30bn in electrifying
Meta Description: Stellantis plans to invest more than €30 billion through 2025 on electrifying its vehicle lineup, with a focus on battery and hybrid electric models to compete
URL: https://financedigest.com/stellantis-makes-30-billion-euro-wager-on-electric-vehicle-markethtml

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By Giulio Piovaccari and Ben Klayman

MILAN/DETROIT (Reuters) -Stellantis, the world’s No. 4 automaker, said on Thursday it plans to invest more than 30 billion euros ($35.54 billion) through 2025 on electrifying its vehicle lineup.

The company, formed in January from the merger of Italian-American automaker Fiat Chrysler and France’s PSA, said its strategy will be supported by five battery [plants in Europe and North America as it gears up to compete with electric](https://www.financedigest.com/stellantis-to-invest-130-million-euros-in-german-plant-for-new-opel-electric-car.html "Stellantis to invest 130 million euros in German plant for new Opel electric car") vehicle (EV) leader Tesla and other automakers globally.

This [transformation period is a wonderful opportunity](https://www.financedigest.com/why-entrepreneurs-can-transform-the-crisis-into-business-opportunities-to-create-more-impactful-and-long-lasting-ventures.html "Why entrepreneurs can transform the crisis into business opportunities to create more impactful and long-lasting ventures") to reset the clock and start a new race,” Stellantis Chief Executive Carlos Tavares said on a webcast during the company’s “EV Day 2021” event. “The group is at full speed on its electrification journey.”

Dario Duse, of consulting firm AlixPartners, said the 30 [billion euros](https://www.financedigest.com/eu-seeks-clarification-on-italy-post-covid-plan-freezes-19-billion-euros.html "EU seeks clarification on Italy post-COVID plan, freezes 19 billion euros") earmarked for the EV program were a “conspicuous amount.

Former PSA [Group already had a good electrified offer](https://www.financedigest.com/leading-financial-advisory-group-bolster-offering-with-senior-appointment.html "Leading financial advisory group bolster offering with senior appointment") that Stellantis will surely try to leverage at best and even the former FCA made steps ahead recently, so the big step up in electrification by 2025 seems achievable,” he said.

Stellantis said it is targeting more than 70% of [sales in Europe and over 40% in the United States to be low-emission vehicles](https://www.financedigest.com/musk-says-tesla-price-cuts-triggered-demand-2023-sales-could-hit-2-million-vehicles.html "Musk says Tesla price cuts triggered demand, 2023 sales could hit 2 million vehicles") – either battery or hybrid electric – by 2030. It aims to make the total cost of owning an EV equal to that of a gasoline-powered model by 2026.

It said all 14 of its vehicle brands – including Peugeot, Jeep, Ram, Fiat and Opel – will [offer fully electrified vehicles](https://www.financedigest.com/erm-advanced-telematics-set-to-expand-its-offering-for-vehicle-manufacturers-and-importers.html "ERM Advanced Telematics set to expand its offering for vehicle manufacturers and importers"). Another focus will be electrifying its commercial vehicle lineup, and rolling out hydrogen fuel-cell medium vans by the end of 2021.

Stellantis said on Thursday that one of the five [battery plants](https://www.financedigest.com/hyundai-breaks-ground-on-5-5-billion-u-s-ev-battery-plant.html "Hyundai breaks ground on .5 billion U.S. EV, battery plant") will be at its engine facility in Termoli, Italy, joining previously announced factories in Germany and France. The automaker also is in final steps of [securing a partner](https://www.financedigest.com/impression-technologies-secures-grant-funding-with-tier-1-automotive-partners.html "Impression Technologies secures grant funding with Tier 1 automotive partners") in North America. A source told [Reuters that Samsung SDI may build](https://www.financedigest.com/thomson-reuters-builds-out-its-award-winning-connected-risk-platform-with-risk-management-solution-providing-a-personalized-enterprise-wide-view-of-risk.html "Thomson reuters builds out its award-winning connected risk platform with risk management solution providing a personalized enterprise-wide view of risk") a U.S. [battery cell](https://www.financedigest.com/bmw-to-make-solid-powers-battery-cells-under-expanded-agreement.html "BMW to make Solid Power’s battery cells under expanded agreement") plant and has been in talks with automakers, including Stellantis.

[Battery partners](https://www.financedigest.com/volkswagen-to-partner-on-indonesia-ev-battery-ecosystem-minister.html "Volkswagen to partner on Indonesia EV battery ecosystem -minister") include Automotive Cells Co, a Stellantis joint venture with TotalEnergies; Contemporary Amperex Technology Co Ltd (CATL), BYD Co Ltd, SVOLT, Samsung SDI and LG Chem’s wholly-owned battery subsidiary LG Energy Solution.

Stellantis said it wants to secure more than 130 gigawatt hours (GWh) of battery capacity by 2025 and more than 260 GWh by 2030. It said it has [signed memorandums of understanding with two lithium geothermal brine process partners in North America and Europe to ensure supplies](https://www.financedigest.com/pge-signs-wind-turbine-supply-deal-for-baltica-2.html "PGE signs wind turbine supply deal for Baltica 2") of lithium, a critical raw material for batteries.

Stellantis said it aims to [cut battery pack costs](https://www.financedigest.com/uks-sunak-under-fire-over-cost-of-living-defends-his-tax-cut-plans.html "UK’s Sunak, under fire over cost of living, defends his tax cut plans") by more than 40% from 2020 to 2024 and by more than an additional 20% by 2030. It [plans to use two battery](https://www.financedigest.com/exclusive-northvolt-plots-ev-battery-grab-with-750-million-swedish-lab-plan.html "Exclusive-Northvolt plots EV battery grab with 0 million Swedish lab plan") chemistries by 2024 – a high energy-density option and a nickel cobalt-free alternative. By 2026, it intends to introduce solid-state batteries.

The automaker said its EVs will be built on four [electric platforms and have driving](https://www.financedigest.com/battery-swapping-spurs-kenyas-electric-motorbike-drive.html "Battery swapping spurs Kenya’s electric motorbike drive") ranges of 500 to 800 km (300 to 500 miles) on a single charge and fast charging capability of 32 km (20 miles) per minute.

Stellantis seems to have put in place quite rapidly a unified platform strategy, same thing for the powertrain modularity, which will allow the company to benefit as fast as [possible from scale effects,”](https://www.financedigest.com/the-brexit-effect-hits-uk-salaries-but-possibly-boosts-tourism.html "The Brexit Effect Hits UK Salaries, but Possibly Boosts Tourism") IHS analyst Romain Gillet said, adding that the company’s targets are in line with its competitors.

MERGER SYNERGIES

At a separate EV strategy event last week, French rival [Renault said 90% of its main brand models](https://www.financedigest.com/nissan-renault-to-invest-600-million-to-make-6-new-models-in-india.html "Nissan, Renault to invest 0 million to make 6 new models in India") would be all-electric by 2030, whereas previously it had included hybrids in its target.

[Germany’s Volkswagen](https://www.financedigest.com/tesla-tops-battery-electric-vehicle-registrations-in-germany-beating-volkswagen.html "Tesla tops battery-electric vehicle registrations in Germany, beating Volkswagen"), the world’s second-biggest automaker after Toyota, expects all-electric vehicles to account for 55% of its total sales in Europe by 2030, and more than 70% of sales at its Volkswagen brand.

General Motors Co said last month it planned to [spend $35 billion](https://www.financedigest.com/europes-spend-on-energy-crisis-nears-800-billion-euros.html "Europe’s spend on energy crisis nears 800 billion euros") through 2025 on electric and self-driving vehicles. It has [set a target](https://www.financedigest.com/big-brands-set-to-miss-plastic-sustainability-targets.html "Big brands set to miss plastic sustainability targets") of selling all new light cars and trucks with zero tailpipe emissions by 2035.

Earlier on Thursday, Stellantis flagged that 2021 got off to a better-than-expected start despite a global semiconductor [chip shortage](https://www.financedigest.com/graphic-chip-price-drop-raises-questions-on-whether-end-of-shortage-is-in-sight.html "Graphic chip price drop raises questions on whether end of shortage is in sight").

Stellantis said its margins on adjusted operating [profits in the first half of 2021 were expected](https://www.financedigest.com/uks-dominos-expects-tech-investments-to-hit-2023-profit.html "UK’s Domino’s expects tech investments to hit 2023 profit") to exceed an annual target of between 5.5% and 7.5%, despite production losses due to the semiconductor supply crunch.

It said synergies from its merger were well on track to exceed the first year’s target and would help to contribute to a [positive](https://www.financedigest.com/liverpools-new-chinatown-perfectly-positioned-for-property-investment-this-chinese-new-year.html "Liverpool’s New Chinatown perfectly positioned for property investment this Chinese New Year") cash flow for the year as a whole. Stellantis has promised more than 5 [billion euros](https://www.financedigest.com/delivery-hero-ramps-up-interest-payments-to-raise-1-billion-euro-convertible-bond.html "Delivery Hero ramps up interest payments to raise 1 billion euro convertible bond") ($5.9 billion) in annual synergies.

[Shares of Stellantis extended losses after the automaker’s EV announcement](https://www.financedigest.com/barclays-announces-sale-of-remaining-shares-in-south-africas-absa.html "Barclays announces sale of remaining shares in South Africa’s Absa") and were last down about 3.9% in Milan.

($1 = 0.8442 euros)

(Additional reporting by Clement Martinot, Stephen Jewkes in Milan, Gilles Guillaume in Paris and Heekyong Yang in Seoul; Editing by Agnieszka Flak, David Clarke and Paul Simao)


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