Stellantis to Expand Hybrid Vehicle Line to Meet Growing Demand

July 09, 2024

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(Reuters) Stellantis (STLAM.MI) said on Tuesday it would expand its line of affordable hybrid vehicles to 36 models in Europe by 2026, to meet growing demand for this engine type, an alternative to petrol-fuelled cars and electric vehicles.

The American-French-Italian automaker, created from the 2021 merger between Peugeot maker PSA and Fiat Chrysler, said in a statement it would offer 30 hybrid models this year for nine of its 14 brands, including Fiat, Peugeot, Jeep and Alfa Romeo, and launch six more over the following two years.

Stellantis, which did not say how many such hybrid models it already sells, said it was responding to the quick ramp-up of customer orders for hybrids in Europe. It added that its sales of this kind of vehicle in the region rose 41% in the first six months this year.

The group said in June its EV sales were stable since the beginning of 2024 despite softer demand globally.

Stellantis said it was focusing on selling "mild hybrid" vehicles, those without a plug and that use a 48-volt low-voltage battery, a dual-clutch robotic gearbox and a reinforced braking energy-recovery system.

"When you compare this system to a high-voltage hybrid, it has a very similar CO2 gain at a lower cost for our customer," said Christian Müller, Stellantis' senior vice president of propulsion systems for the EMEA region, referring to its carbon dioxide emissions.

"Our system is as good as the others but with a slightly better price-entry point."

Stellantis' affordable hybrid technology allows for a range of up to one kilometre in pure electric mode, compared to around 80 kilometres for the group's plug-in hybrid technology. READ MORE

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Stellantis will expand hybrid vehicle line to meet growing demand (Market Screener)
Toyota Should Set an All-Hybrid Floor for Its US Lineup (Bloomberg)
Ford revamps electric vehicle strategy with push into hybrids -- The automaker’s EV division has been losing money, but pivoting from all-electric vehicles to hybrid technology could cost Ford up to $1.9 billion more. (Washington Post)
Ford to shift electric vehicle strategy by building new lower-cost pickups and a commercial van (Associated Press)
The Electric Vehicle Transition That Isn’t -- Ford’s losses keep rising as the EV share of auto sales declines. (Wall Street Journal)
If Ford can’t crack electric cars, no one can (The Spectator)
The Plug-In Hybrid Car Starts to Win Over Buyers: Dealers say many car shoppers who are interested in going electric still want the security of a gas engine (Wall Street Journal)
U.S. share of electric and hybrid vehicle sales increased in the second quarter of 2024 (U.S. Department of Energy, Energy Information Administration)
Ford’s EV pullback threatens its emission targets -- The company's plans to cancel or delay electric models could thwart efforts to meet EPA targets, experts say. (Politico Pro Climatewire)
Opinion Why Detroit is hitting ‘pause’ on electric vehicles (Adam Lashinsky/Washington Post)
Former auto executives warn electric vehicle push happened 'too soon and too fast': Chrysler's Nardelli and former Big Three exec Bob Lutz discuss the challenge of selling EVs to Americans (Fox Business)
Ford cancels plans for electric three-row SUV -- Cancellation is part of a wider update to Ford’s electrification strategy (Fox Business)
Ford's profits getting eaten up by EVs -- Ford lost about $4.7 billion on EVs last year and projects losses in the range of $5 billion to $5.5 billion this year (Fox Business)
Opinion: The EV push has hit a speed bump. It doesn’t have to be a climate roadblock. Ford scaling back its EV plans is the latest electric vehicle setback. But this is not fatal for a smart green transition. (Washington Post)
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GM to launch its first ethanol-capable hybrid-flex vehicles in Brazil (Reuters)
Volvo reverses plan to sell only electric cars by 2030 as demand falls (EuroNews)
Autos: Car giants are being forced to confront some hard truths over the EV transition (CNBC; includes video)
Ford to halt production of F-150 Lightning EV pickup trucks for six weeks (Reuters)
Bentley Motors further delays all-EV plan amid weak demand as it embraces plug-in hybrids (CNBC)
Bentley Delays Total EV Transition Just as It Announces First Electric Model's Debut (Motor Trend)
Bentley delays its switch to electric-only cars from 2030 to 2035 (The Guardian)
Bentley delays all-electric switch by five years due to lack of interest (Proactive Investors)
Awaiting Trump, US auto execs further temper EV push (AFP/Yahoo!)

Excerpt from Washington Post: Ford is revamping its money-losing electric vehicle business, retreating from some plans for all-electric vehicles and instead prioritizing the development of hybrid technology, the automaker announced Wednesday (August 21, 2024).

The announcement underscores the challenges facing U.S. automakers as they seek to boost sales of EVs, a crucial technology in the fight against climate change, despite flagging consumer demand, supply chain challenges and increased competition with Chinese carmakers.

Ford is scuttling plans for a three-row electric SUV and spending less of its total resources on all-electric vehicles, with annual capital expenditures dedicated to pure EVs declining from about 40 percent to 30 percent.

Still, executives said production will begin on an all-electric commercial van in 2026. The automaker also has plans for two more electric pickups and long-range SUVs.

Ford is responding to consumer preferences, company executives said, as many drivers remain concerned about a lack of EV charging infrastructure and affordable EV models.

...

Ford is shifting to hybrid technologies for its next three-row SUVs and will take a $400 million write-down for “certain product-specific manufacturing assets,” the automaker said in a news release. The company warned that it may also see “additional expenses and cash expenditures” of up to $1.5 billion.

“We could not put together a vehicle that met our requirement of being profitable in the first 12 months,” Chief Financial Officer John Lawler said on a Wednesday call with reporters and analysts. “If these vehicles are not profitable based on where the customer is, we will pivot and adjust and make those tough decisions, and that’s what we’ve done.”

The announcement deals another blow to President Joe Biden’s ambitious goal of electric vehicles and plug-in hybrids accounting for half of new car sales by 2030. It comes as EVs have emerged as a flash point in the 2024 election, with former president Donald Trump repeatedly bashing the technology.

...

The outcome of the election has important implications for federal EV policies, including a tax credit of up to $7,500 for EV buyers. During a campaign stop in Pennsylvania on Monday, Trump said he had not made “any final decisions” on the subsidy.

“I’m a big fan of electric cars, but I’m a fan of gasoline-propelled cars, and also hybrids and whatever else happens to come along,” Trump said.

Ford also said Wednesday that it is delaying production of an electric pickup truck at a Tennessee plant to 2027. Production at the new $5.6 billion plant outside Memphis was initially expected to begin next year.

...

(Chief executive Jim) Farley said in a recent call with investors that his company has learned from its EV losses and will need to be more disciplined moving forward.

“This means we will not launch vehicles at a loss that are not good for our business, knowing what we know now about the reality of the market equation,” Farley said. READ MORE

Excerpt from Wall Street Journal: Auto makers’ problem is that California and the Biden Administration are forcing them to make increasing numbers of EVs that are piling up on dealer lots. Companies are slashing prices to sell them, resulting in hefty losses. Meantime, Americans are balking at paying more for gas-powered cars, making it harder for the car makers to use those profits to subsidize EVs.

Such losses and cross-business subsidies aren’t financially sustainable even with generous government subsidies. The Biden Administration last year awarded Ford’s joint battery venture a $9.2 billion low-cost loan for three giant electric vehicle battery factories and last month announced a $335 million grant for Stellantis to convert the Belvidere plant to build EVs.

Inflation Reduction Act tax credits can offset the cost of battery production by 30%. The law also dangles $7,500 for consumers to buy EVs, on top of thousands of dollars in subsidies by many states. Yet the EV share of auto sales is declining. One ironic reason may be that climate mandates and regulation have increased electricity prices relative to gasoline.

Anderson Economic Group estimates that mid-sized EVs cost between $12.61 and $16.11 to fuel per 100 miles, compared to $10.71 for gas-powered models. For pickups, the cost differential is larger. CEO Patrick Anderson tells us that market signals at least a year ago were telling Ford not to spend billions on building a big electric SUV.

None of this matters to the Biden Administration, which is hell-bent on forcing an EV into every American garage whether it’s wanted or not. This spring it ramped up greenhouse gas emissions standards, which will require companies to produce nearly four electric trucks for each gas-powered model by 2032. The alternative? Buy regulatory credits from the likes of Tesla. Such credit sales have accounted for half of Tesla’s profit this year.

Kamala Harris in 2019 supported banning the sale of new gas-powered cars in 2035. When auto makers bleed red ink trying to comply with the government mandates, will she force taxpayers to rescue them? READ MORE

Excerpt from The Spectator: This is the latest blow to the struggling EV industry. Despite the billions of euros, dollars and pounds thrown at it in subsidies and tax breaks by governments, and despite targets to replace all the petrol-powered cars on European and American roads over the next decade, sales have stalled, costs have risen, and the manufacturers are struggling.

The likes of Volkswagen and Renault have already scaled back their plans. And now even Ford is throwing in the towel. The company also announced today that it is postponing the launch of its next electric pickup truck. At the same time, it would cut the share of annual capital expenditures dedicated to ‘pure’ electric vehicles from 40 per cent to 30 per cent, and write off much of the money it had already spent.

Meanwhile, the Chinese are still powering into the market. This week, Xaomi, a company best known for its smartphones, said it has comfortably beaten its targets, and now expected to sell 120,000 of its electric cars by the end of 2024 – 20,000 more than initially planned. Its rivals BYD announced last month that its sales were up by 21 per cent over the latest quarter, putting it on track to overtake Tesla; the other major Chinese players are doing just as well.

There is a significance to the Ford decision. Under its founder Henry Ford, this was the company whose the legendary Model T marked the perfection of automobile mass production a century ago, turning the car into a product that everyone could afford. It built manufacturing outposts around the world, including the UK. If Ford is now scaling back, it is hard to see how anyone can compete. The subsidies and industrial strategies have not worked.

True, if we want to hit net zero we may have to switch to battery-powered cars. But we have to accept that it will come at a huge industrial cost, handing one of the largest industries in the world to China, and all the jobs and wealth it creates with it. Ford’s decision this week has confirmed that. READ MORE

Excerpt from Fox Business: Rivian also announced this February that it would lay off 10% of salaried staff and projected flat vehicle output due to "economic and geopolitical pressures." The EV maker has also paused work on its billion-dollar manufacturing plant in Augusta, Georgia.

In a statement to Digital, a Rivian spokesperson said the company holds a "deep conviction that the entire automotive industry will electrify over the long-term… We believe Rivian has demonstrated a unique ability to resonate with customers as evidenced by the R1S becoming the top selling EV in the U.S. priced over $70,000. Additionally, when R2 arrives in the first half of 2026, pricing is expected to start around $45,000, and R3 will be priced below R2, making Rivian vehicles more accessible to more people."

...

"The focus on hybrids would have been well-placed as an evolution towards EV. It would have allowed for charging stations and would have allowed for the massive grid network, maybe to bolster their base supply to be able to absorb this," the Chrysler exec who headed the company from '07 to ‘09 said. "The utilities, the electrical system in this country is going to put us at a tremendous disadvantage as we advance further with electrical demand. That's going to be a shortfall."

...

Polling shows most Americans consider emissions when buying a new car. However, despite the push for electric vehicles, data shows consumers prefer other "green" alternatives, like hybrids.

...

Lutz soothed business leaders’ trade war concerns that China may soon produce and export more EVs than American auto brands.

"I am very concerned with the trade balance on the auto industry. And if the government puts a heck of a tariff or an embargo on [Chinese EV maker] BYD coming here in an attempt to bolster… U.S. manufacturing, again, I think it's just going to create tremendous tension already between U.S. and China," Nardelli said.

...

"My guess for a 10-year period, which I might be around to witness, but at 92, one can't be sure. I would say EVs could, without a government forced job, EVs could be 25 to 30% of the market. And then continually going up from there." (Lutz) READ MORE

Excerpt from CNBC:

European car giants are struggling to come to terms with a perfect storm of challenges on the path to full electrification.
Volvo Cars recently announced it had abandoned its heavily promoted plan to produce only EVs by 2030, citing a need to be "pragmatic and flexible" amid changing market conditions.
Crisis-stricken Volkswagen and several other carmakers, including Ford and Mercedes, have all announced plans to delay earlier targets to phase out sales of internal combustion engines vehicles in Europe.

European car giants are contending with a perfect storm of challenges on the path to full electrification, including a lack of affordable models, a slower-than-anticipated rollout of charging points and the potential impact of European tariffs on EVs made in China.

Volvo Cars on Wednesday announced it had abandoned its heavily promoted plan to sell only EVs by 2030, citing a need to be "pragmatic and flexible" amid changing market conditions.

The Swedish automaker said it now aims for between 90% and 100% of its car sales to be fully electric or plug-in hybrid models by 2030. The company now says that up to 10% of its sales will represent a limited number of mild hybrid models by that deadline.

Crisis-stricken Volkswagen and several other carmakers, including Ford and Mercedes-Benz Group, have all announced plans to delay earlier targets to phase out sales of internal combustion engines vehicles in Europe.

"I think a lot of manufacturers are obviously going through this process [of delaying electrification targets] at the moment. We're seeing it across the industry," Tim Urquhart, principal automotive analyst at S&P Global Mobility, told CNBC's "Squawk Box Europe" on Monday.

"A lot of manufacturers who had sort of stopped investing in internal combustion engine technology have started to realize that, if we don't continue to invest, we're not going to be competitive, we're not going to actually have the product in showrooms that people want to buy," he added.

...

"There needs to be a sort of dose of pragmatism from both regulators and the manufacturers. The manufacturers are probably ahead of the regulators on this issue," Urquhart said.

"The manufacturers are the only other ones seeing what customers are wanting to buy at the moment, and it is not as many battery electric vehicles, as everyone had anticipated," he added. READ MORE; includes VIDEO

Excerpt from CNBC:

Bentley Motors is once again pushing back a target to exclusively offer all-electric vehicles, with plans to continue leaning into plug-in hybrid electric vehicles through at least 2035.
The Volkswagen-owned carmaker initially said in 2020 that it planned to exclusively offer all-electric vehicles by the end of this decade.
Bentley said it plans to offer a new EV or plug-in hybrid electric vehicle each year until 2035, starting with its first all-electric vehicles in 2026.

Bentley Motors is once again pushing back a target to exclusively offer all-electric vehicles, with plans to continue leaning into plug-in hybrid electric vehicles until at least 2035.

The British maker of ultra-luxury performance cars on Thursday said it continues to have “an ambition to be building only fully electric cars from 2035,” but the adjustment is needed due to changing market conditions.

Bentley Chairman and CEO Frank-Steffen Walliser said “there’s not a lot of demand” for EVs from current customers. But he said the automaker needs to meet legislation and be ready for a new generation of customers.

“Legislation, for sure, is driving electrification … but also competition,” Walliser said during an online media event Thursday. “We have to be honest, there’s not a lot of demand.”

The Volkswagen-owned carmaker initially said in 2020 that it planned to exclusively offer all-electric vehicles by the end of this decade. Former CEO Adrian Hallmark days before leaving the company said those plans would be delayed by a few years but did not give a set timeframe.

Bentley said it plans to offer a new EV or plug-in hybrid electric vehicle each year until 2035, starting with its first EV, a “Luxury Urban SUV,” in 2026. The EV was initially expected to be produced starting next year.

“We want to produce PHEVs as long as markets and customers demand it,” Matthias Rabe, head of Bentley’s research and development, said during the Thursday briefing.

Rabe said Bentley may continue to release vehicles with traditional internal combustion engines in the years to come.

Walliser, who succeeded Hallmark in July, said the automaker’s first EV will be smaller than its traditional vehicles, including its current Bentayga SUV.

Hallmark previously said the delay in Bentley’s first all-electric vehicle was the result of software issues as well as difficulty with developing the vehicle’s architecture to Bentley’s standards. He had said those challenges were the primary driver behind delaying its EV plans, rather than the changing market conditions. READ MORE