# Stellantis won’t race to split electric vehicles from fossil fuel cars Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-05-05 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Stellantis Not Considering Splitting Electric Vehicle Meta Description: Stellantis CFO Richard Palmer states no plans to split electric vehicle (EV) sector from combustion engine ops after strong Q1 revenue data release. URL: https://financedigest.com/stellantis-wont-race-to-split-electric-vehicles-from-fossil-fuel-carshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-05-05t063218z1lynxnpei4407urtroptp4fca-maserati-sports-car-1736815779814-compressed.jpg) By Giulio Piovaccari MILAN (Reuters) – Stellantis is not considering splitting its electric vehicle (EV) business from its legacy combustion engine operation, its finance chief said on Thursday, as the carmaker presented above-expectation revenue data for the first quarter. Chief Financial Officer Richard Palmer told analysts he did not see huge benefits in the kind of separations pursued by rivals such as France’s Renault and U.S. Ford. We need to [manage the company and the assets](https://www.financedigest.com/britains-post-brexit-asset-management-revamp-eyes-liquidity-tokenisation.html "Britain’s post-Brexit asset management revamp eyes liquidity, tokenisation") we have through this transition,” he said. There are benefits to having the cash flow being generated by the internal combustion [business for the investments](https://www.financedigest.com/why-investing-in-employee-health-can-be-good-for-business.html "Why investing in employee health can be good for business") we need to make. Palmer said the group, formed by a merger last year of Fiat Chrysler and Peugeot maker PSA, was not averse to considering adjusting its structure “but we aren’t anticipating any [big changes.”](https://www.financedigest.com/from-boom-to-bottom-and-now-big-change-renault-and-nissan-reshape-alliance.html "From boom to bottom and now big change: Renault and Nissan reshape alliance") Palmer’s comments came after the world’s fourth largest [carmaker said its net revenue rose 12% to 41.5 billion euros](https://www.financedigest.com/euro-7-emissions-proposals-the-sequel-europes-carmakers-dont-want-to-see.html "Euro 7 emissions proposals, the sequel Europe’s carmakers don’t want to see") ($44.1 billion) in the January-March period, as strong pricing and the type of vehicles sold helped offset the impact of the semiconductor shortage on volumes. That topped analyst expectations of 36.9 [billion euros](https://www.financedigest.com/mercedes-benz-to-buy-back-up-to-4-billion-euros-in-shares-by-2025.html "Mercedes-Benz to buy back up to 4 billion euros in shares by 2025"), according to a Reuters poll. Milan-listed shares were up 0.5% by 1415 GMT, in line with Italy’s blue-chip index. The impact of the chip crunch was evident in the decline in shipment figures which fell 12% in the quarter to 1.374 [million vehicles](https://www.financedigest.com/sainsburys-pays-524-million-for-full-ownership-of-store-investment-vehicles.html "Sainsbury’s pays 4 million for full ownership of store investment vehicles"). It was a similar story for Germany’s BMW which [posted higher revenues on Thursday and a decline in car sales](https://www.financedigest.com/mercedes-posts-rise-in-q1-sales-boosted-by-evs-premium-cars.html "Mercedes posts rise in Q1 sales boosted by EVs, premium cars"). RIDING THE RECOVERY Stellantis, whose brands also include Citroen, Jeep and Maserati, confirmed its 2022 forecasts for a double-digit adjusted operating income margin, after 11.8% last year, and a positive cash-flow [despite supply and inflationary headwinds](https://www.financedigest.com/despite-the-headwinds-investors-have-important-reasons-to-be-cheerful.html "DESPITE THE HEADWINDS, INVESTORS HAVE IMPORTANT REASONS TO BE CHEERFUL"). Morgan Stanley analysts said after the results that Stellantis had better [management than many peers and benefited from its significant exposure](https://www.financedigest.com/enhancing-credit-exposure-management-through-graph-analytics.html "Enhancing Credit Exposure Management Through Graph Analytics") to a stronger U.S. economy and a [European recovery](https://www.financedigest.com/european-shares-end-higher-on-china-recovery-optimism.html "European shares end higher on China recovery optimism") from the COVID-19 pandemic. They also said it was less affected by a [slowing Chinese economy](https://www.financedigest.com/thomson-reuters-keeps-outlook-but-wary-of-slowing-economy.html "Thomson Reuters keeps outlook, but wary of slowing economy"). Palmer said it was important for the group to maintain double-digit margins and [keep delivering positive cash flows](https://www.financedigest.com/commodities-trading-houses-help-keep-russian-oil-flowing.html "Commodities trading houses help keep Russian oil flowing"). A 12% [increase in revenue with a 12% decrease in volumes indicates a very strong performance on price](https://www.financedigest.com/taylor-wimpey-espana-remain-cautiously-optimistic-as-average-selling-price-increases-by-20-4.html "Taylor Wimpey España ‘remain cautiously optimistic’ as average selling price increases by 20.4%") and mix, which augurs well for our margin performance,” he said. He said semiconductor [supply problems were expected to ease](https://www.financedigest.com/uks-j-d-wetherspoon-returns-to-profit-as-supply-issues-ease.html "UK’s J D Wetherspoon returns to profit as supply issues ease") this year with continued improvements in 2023. “But honestly I cannot give a date for when they are solved,” he added. Raw material costs would also weigh, Palmer said, with the group likely to raise its initial forecast for 4 [billion euros of extra related costs](https://www.financedigest.com/australias-nuclear-submarine-plan-to-cost-up-to-245-billion-by-2055-defence-official.html "Australia’s nuclear submarine plan to cost up to 5 billion by 2055 -defence official") this year. “I will give you a better view with first-half results but the impact is going to be probably up to 50% higher,” he said. ($1 = 0.9422 euros) (Additional reporting by Nick Carey; Editing by Keith Weir, Tomasz Janowski and Edmund Blair) --- This blog is powered by Superblog. 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