The road to electrification has rattled Stellantis more than others. The European-American automaker, which has 14 brands under its umbrella including iconic ones likes Jeep, Ram and Dodge among others, was caught off-guard by the early rise of Tesla followed by the titanic growth of Chinese automakers. To make matters worse, the U.S and EU tariffs on Chinese electric car imports and tough battery raw material sourcing requirements has stifled its growth. In CEO Carlos Tavares's own words, the brand has been caught in a "trap." Now it has to get out.
That sets in motion the Friday edition of Critical Materials, your daily round-up of news and events shaping up the world of electric cars, software-defined vehicles and autonomous technology.
Also on today's list: how European battery maker Northvolt went from being a bright spot in the EV world to facing a huge liquidity crisis and some third-quarter sales projections for the entire car industry and the role EVs are playing in that.
30%: Stellantis Caught In A "Trap"
There are plenty of hot takes out there regarding the tough tariffs imposed by the U.S. and Europe on Chinese electric car imports. You'll find several perspectives depending on which side of the table you look at. The one from Stellantis CEO Carlos Tavares is blunt but realistic.
In comments he shared with Reuters, he said the Western governments' measures shield us from the reality that Chinese automakers can make competitive EVs at one-third of the cost. According to him, the solution to the cost problem is not a full-court press against Chinese carmakers, but to be more like them in getting there.
Here's more on that from the news wire this morning:
Stellantis wants to adopt the low-cost mindset of Chinese EV makers despite the European and U.S. tariffs CEO Carlos Tavares lambasts as anticompetitive, but the world's No. 4 automaker must navigate trade barriers on both sides of the Atlantic if it wants to succeed.
The best way to compete is instead to "try to be Chinese ourselves," Tavares said at a Reuters Events conference in Munich in May.
Stellantis' Tavares says tariffs hurt exports because protected automakers are under no pressure to lower prices. "When you get used to protection, it's very difficult to get rid of," Tavares told Reuters in May.
To get into this low-cost mindset, Stellantis has partnered with Hangzhou-based Leapmotor, which builds the C10 electric sedan, one of the first cars to ever feature the cell-to-chassis battery technology.
Now thanks to Stellantis, Leapmotor has launched in Europe and is producing EVs at the automaker's plant in Poland alongside models from Fiat, Jeep and Alfa Romeo. Tavares has even floated the idea of making Leapmotor EVs in North America.
But that's easier said than done.
Europe and the U.S. might be on the same page when it comes to tariffs on Chinese EVs, but they've adopted vastly different protectionist approaches. The U.S. not only has a higher 100% tariff, compared to up to 38.1% in the EU, but it also has stricter battery sourcing requirements.
The report further adds that Stellantis could make Leapmotor EVs at U.S. plants theoretically, but with locally sourced parts and U.S. wages, it will be hard to be price competitive. And given how price-sensitive the EV market is in the U.S., Stellantis might want to avoid being hasty here.
That said, it's not all doom and gloom for the automaker. Jeep is desperate for a turnaround and has several promising models lined -up, including the Tesla Model Y-rivaling Wagoneer S and a $25,000 electric Renegade that's coming by 2027.
There's also the Ram 1500 REV that's going to heat up the EV truck war with its impressive specs of over 350-miles of range, 350 kilowatts of max charging speeds and an 800-volt architecture. And oh, there's also the Dodge Charger Daytona EV that will vibrate and pump fake noises through its “Fratzonic Chambered Exhaust.”
The automaker may be in a trap at the moment, but if it can deliver what it has promised, things may not look so bleak further down the road.
60%: Battery Maker Northvolt Is Fighting For Survival
Swedish company Northvolt once promised to be a burgeoning battery manufacturer that could put Europe on the global map as an emerging player in the battery space, which is currently primarily dominated by Chinese, Japanese and Korean companies.
However, Northvolt is now set to cut 20% of its global workforce, halt its plant expansion and its creditors are scheduled to meet this week to determine whether to release funds needed for the company's survival.
Here's more from Bloomberg:
It’s a stunning reversal for a company that was less than a year ago wooing investors with a planned initial public offering that would have valued it at $20 billion. It was the first recipient of the European Union’s green aid aimed at stopping businesses from being lured away by incentives offered under US President Joe Biden’s Inflation Reduction Act, and was promising large-scale factories across Europe and North America.
According to the outlet, Northvolt's downward trajectory was caused due to competition with Chinese battery makers, its own failure to meet production targets and delays in delivering batteries to the likes of BMW and truck-maker Scania. Plus, the EV demand correction in Europe made things worse.
I don’t want to sound alarmist because I’m a strong supporter of EVs and clean energy, but this is yet another example of how brutal the EV industry can be. It's moments like these when another of Tavares' quotes really hits home. Earlier this year, he said, "We are not talking about a Darwinian period, we are in it."
90%: GM, Stellantis Eye A Rough Q3 For Overall Car Sales
Experts at car trading platforms Edmunds and Cox Automotive expect retail sales to be down this quarter compared to previous periods.
According to Edmunds, new vehicles sales are expected to be down 2.3% compared to the same period last year and a 4.7% decrease from the second quarter, according to data shared with InsideEVs.
“New vehicle sales fell slightly in Q3 as affordability challenges continued to loom large for American car shoppers in the form of historically elevated prices and interest rates,” said Jessica Caldwell, Edmunds’ head of insights.
The biggest drops year-over-year in the U.S. are coming from Toyota, Nissan, Ford and General Motors. Although as InsideEVs reported yesterday, the EV market is looking at another record quarter despite Tesla's sales decline as rivals step up.
100%: Which Stellantis Model Excites You The Most?
Not many Stellantis EVs are on sale right now. But plenty are in the pipeline and they all have vastly different personalities. I'm looking forward to the Ram 1500 REV and the Ram 1500 Ramcharger. But there's also the Jeep Recon, a Wrangler-inspired electric off-roader, the Dodge Charger Daytona EV and a $25,000 electric Renegade in the pipeline.
Which one excites you the most and why? Leave your thoughts in the comments.
Contact the author: suvrat.kothari@insideevs.com
