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Stellantis to invest $35.6 billion in EVs, software by 2025

Breana Noble
The Detroit News

The maker of Jeep SUVs and Ram trucks will invest nearly $35.6 billion (30 billion euros) through 2025 in electrification and software to be a leader in low-emission vehicles, the transatlantic automaker said Thursday during its "EV Day" virtual presentation.

The company formed from the merger of Fiat Chrysler Automobiles NV and French rival PSA Group says it will source 260 gigawatt-hours of EV batteries from two plants in North America and three in Europe by 2030. It's a major step in CEO Carlos Tavares' work to bring together and electrify 14 brands of the world's fourth-largest automaker.

The 2022 Jeep Wrangler 4xe can get about 21 miles on a charge (if you keep acceleration steady) before the gas engine kicks in.

The plan follows multi-billion commitments from competitors. General Motors Co. has committed $35 billion for EVs, including up to roughly $1 billion for autonomous vehicles, through 2025. Ford Motor Co. has committed $30 billion in electrification through 2025. Volkswagen AG last year said it would invest $86 billion (73 billion euros) over five years in the development of electric vehicles and other new technologies.

Stellantis shares in New York City were falling 3.11%, more than major market indexes. They were down more than 4% in Milan and 3.84% in Paris.

Stellantis' commitment marks an acceleration to electrify its portfolio in Europe, where the Opel and Fiat brands will phase out gas-powered cars in the coming years. Regulators there are pushing automakers to cut emissions. Rules are less strict in the United States, where Stellantis is less ambitious. Ram's first all-electric truck will come in 2024, years after fully EV models from Ford and GM make their debut.

“The customer is always at the heart of Stellantis and our commitment with this €30 billion plus investment plan is to offer iconic vehicles that have the performance, capability, style, comfort and electric range that fit seamlessly into their daily lives,” Stellantis CEO Carlos Tavares said in a statement.

“The strategy we laid out today focuses the right amount of investment on the right technology to reach the market at the right time, ensuring that Stellantis powers the freedom of movement in the most efficient, affordable and sustainable way.”

Stellants said it is in late-stage negotiations with a partner for a battery-cell plant in North America. It confirmed it will build its third European battery plant in Italy. It already has plans for plants in France and Germany.

Stellantis said it will build its third European battery factory in Italy, confirming an earlier report from Bloomberg. The company already had plans for two battery plants in France and Germany. It is partnering with oil and gas company TotalEnergies SE and its battery maker Saft Groupe SA to produce batteries in Europe.

The company expects plug-in hybrid and fully electric vehicle will represent more than 40% of its sales in the United States and 70% in Europe by 2030. Those battery-powered vehicles on four new EV platforms will boast ranges of between 300 miles for compact cars to 500 miles for full-size SUVs and trucks. Jeep by 2025 will have a fully electric offering in each of its segments. Dodge will introduce its first fully electrified muscle car by 2024.

Stellantis previously said it expects to have electrified options, including plug-in hybrids, for nearly all of its nameplates by 2025 and fully battery-electric options across all models by 2030.

The plan, according to the automaker, will allow it to achieve a double-digit adjusted operating income margin by around 2026. The company on Thursday upped its margin expectation for the first half of 2021 to exceed its full-year margin guidance range of 5.5% to 7.5%, despite paused production due to the global semiconductor shortage. The company attributed the larger margins to higher pricing from low inventory, strong mix after prioritizing the production of popular SUVs and trucks and cost control measures. Richard Palmer, chief financial officer, forecasts the second half of the year's margin to be about 9%.

The automaker still expects negative industrial-free cash flows for the first half of the year because of the misses in planned production. Efforts to implement cost savings from the merger that closed in January, however, are on track to exceed first-year expectations, according to the company.

Twitter: @BreanaCNoble