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Stellantis CEO Carlos Tavares made an intriguing announcement in February: Chrysler’s parent company would focus on electric vehicles, even as competition shrinks and sales expansion slows.
He is 55 years old. He then created the largest corporation in the world.
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“We’re going to go all-in,” he told analysts on the company’s earnings conference call.
The 65-year-old’s view on battery-powered cars is a stark change from just a year ago, when he sounded the alarm about the peak charge of electric cars. Today, Tavares is more optimistic, driving through the company’s flex-vehicle platforms and the fact that Stellantis’ electric cars are already profitable.
Tavares says the company is staying the course with an ambitious goal it set two years ago: to make 50% of Stellantis’ U. S. sales volume all-electric by 2030, backed by its Jeep SUV and Ram pickup truck brands.
Tavares, a part-time race car driver, has stood out among his peers as an executive who moves to the beat of his own drum.
While Stellantis has been promoting electric models in Europe in recent years, the United States has been on the back burner for a while. Company executives said the delay gave them time to better understand what American consumers were looking for, a credit when competitors have spent billions. of dollars to temporarily introduce its first electric models to catch up with market leader Tesla, even if some drivers remain skeptical of the technology.
Stellantis, formed in 2021 from the merger of Fiat Chrysler Automobiles and the PSA Group, has 14 brands worldwide, joined by well-known American names such as Jeep and Ram, as well as European brands Opel and Peugeot.
The company is implementing a competitive plan to capture a percentage of the EV market: sell 48 EV models globally by the end of 2024, adding 8 in the U. S. and Canada. U. S.
These come with the Fiat 500e subcompact vehicle, which is recently available, as well as the Dodge Charger Daytona muscle car and the Ram 1500 REV pickup truck, which are expected to arrive in dealerships later this year.
Tavares is important in his company’s new flexible vehicle platforms. They will give Stellantis an edge, allowing the company to move between electric and gas-powered construction vehicles based on customer demand.
These platforms are not necessarily unusual structural foundations on which other types of cars can be built.
“We are launching at the right time with the right generation and products that span market segments,” a corporate spokesperson said.
But Tavares said he has more than one explanation for being more optimistic: Raw prices are falling and the all-electric models Stellantis sells globally are already profitable. At a time when many automakers are wasting money on electric vehicles, launching profit-generating vehicles EVs as soon as they hit the market are a key guiding principle of the company, he said.
“People get things done if it’s going to be profitable,” Tavares said in an interview. “Otherwise, they let it go. “
Tavares, who led Peugeot after several years at Nissan Motor, has earned a reputation for maintaining accurate metrics to track progress and being hyper-focused on costs. Fly on cheap airlines instead of the personal jets preferred by other automotive executives.
This focus on charge containment has continued his tenure at Stellantis, which has maintained double-digit profit margins since its inception in 2021, among the highest in the industry.
The company achieved those goals under Tavares’ leadership by reducing its number of employees in the U. S. to the U. S. It has opened the U. S. through buyouts and layoffs, and by taking steps to sell some of Stellantis’ largest real estate holdings, including its North American headquarters.
Tim Kuniskis, chief executive of Dodge and Ram, said recently that Tavares had asked the company’s U. S. brands to acquire regulatory credits allowed by U. S. law to meet tailpipe emissions standards. Fiat Chrysler had relied for years on the credit acquisition formula to meet the requirements.
“My guys would probably think, ‘Carlos’ crazy,'” Tavares said, “and that’s OK. “But he said buying credits from other automakers only helps competition and puts Stellantis in a weak position.
Until now, some automakers have struggled to make money from their electric cars. Ford lost about $5 billion in its electric car business last year and forecasts even bigger losses this year. General Motors has delayed a $4 billion redesign of a Detroit plant. building electric pickup trucks and the self-imposed goal of generating 400,000 electric vehicles over a two-year period to mid-2024.
Meanwhile, Tavares told analysts on the February call that Stellantis’ electric cars in Europe were profitable, adding a new sedan introduced through the company’s Citroën brand, the e-C3, which sells in Europe for 23,300 euros, about $25,000.
For years, Tavares has said consumers probably wouldn’t switch to electric models without really broad government subsidies and lower costs, and he has chided regulators for forcing corporations to sell more battery-powered cars.
Now, the CEO says the company’s top U. S. brands — Dodge, Jeep and Ram — are set to make their first retail electric cars that will go on sale later this year.
Stellantis’ new global vehicle platforms have been touted by executives as a commercial merit in recent months. Up to two million cars can be built on one of Stellantis’ new platforms, called STLA Medium, which is equivalent to a third of the automaker’s total sales. in 2023.
These platforms, which involve the fundamental mechanical parts that underpin a car, can be used only to make battery-only models, but also hybrid models and models equipped with internal combustion engines.
Kuniskis said at a recent convention that one of the company’s four new vehicle platforms will be a midsize SUV for Jeep, a powerful two-door coupe for Dodge and a new vehicle for Chrysler, adding those powered by gasoline engines and battery motors.
“This unique platform supports in the short term 8 other radically different vehicles, for radically different visitor profiles,” said Kuniskis. “And in the long run, it will serve even more. “
Tavares said this setup is particularly advantageous as the U. S. and Europe face political elections this year that may alter the regulatory environment for electric vehicles.
If regulators cut back on electric vehicles after that election, Stellantis may slow down until customers ask for raises, he said. If there are more, you can speed up production.
“I’ll be in a better position to deal with this market than if it slowed down now,” he said.
Other executives have taken a different view, saying a flexible arrangement like Stellantis’ isn’t the right approach. Developing an EV formula from scratch allows for a larger battery, thus offering longer range and a more spacious interior for an electric vehicle adapted from a gasoline engine, supporters such as General Motors and Volkswagen said.
Still, Tavares believes his strategy will pay off.
The CEO said the company has enough battery sources for its U. S. ambitions. And the automaker is reaping benefits from its long-term strategy due to slowing customer interest, as the uninterrupted narrative has led to a reduction in overall production and EV prices, Tavares said.
“This has an effect on the price of raw fabrics, which means that the price of raw fabrics is going down,” he said. As a result, accessibility for consumers is expected to continue to increase, he said.
Problems persist, Tavares said, and the industry may not succeed in promoting electric cars unless corporations continue to cut costs, increase affordability and build a physically powerful charging network for drivers.
But while there are some bumps in the road, he believes the electric transition is inevitable. However, in the coming years, Tavares believes that the festival will be intense and that only a handful of global automakers will be able to survive.
“There will be five,” he said. Among them will be Stellantis. “
Write to Ryan Felton at ryan. felton@wsj. com
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