Stellantis has to figure out how to make its future electric cars (EVs) profitable. Stellantis’ Chief Executive Officer, Carlos Tavares, is of the opinion that the company ought to learn how to manufacture its batteries and seek out ways to make them more affordable and lighter. Stellantis’s EVs include the Chrysler Halcyon and the high-end Jeep Wagoneer S. Most of the big automakers get their engines from companies in the United States. You can buy transmissions, but engines? With the spirits of brand-new cars? They need to start with the beginning. However, electric cars are not the same. The most expensive parts of an electric car are the lithium-ion cells that make up the battery pack. Also, those have never come from the company whose cars they run. They come from Panasonic, LG, Samsung, and BYD, among other consumer electronics makers. As of right now, only BYD and Tesla, the two biggest electric vehicle companies in the world, are making their cells. They are only sold to other makers by BYD. Along with its ongoing partnership with Panasonic, which makes cells at Tesla’s Nevada Gigafactory, the company also needs help at its Austin, Texas plant with scaling up production of its new, larger 4680-cell format. In contrast to past projects with Panasonic, that cell was entirely made by the EV maker. GM owns a portion of Ultium Cells. At least three sites in North America will make cells for the Cadillac Lyriq, the Chevrolet Silverado EV, and other Ultium EVs. GM’s first Bolt EV was driven by LG, a Korean cell maker that works with GM. Density, mass, and price of bulk goods Stellantis CEO Carlos Tavares told Invoice Pricing and other media outlets last week in a roundtable interview that his business needs to make its batteries as well. The reasons are easy to understand: EVs need to be cheap and easy for everyone to get. These buyers can be found in both wealthy places, like North America and Europe, and less developed places, like places where Stellantis has a big Fiat influence. In 90 minutes, Tavares talked about almost a dozen topics, such as how Jeep prices were going down and how the company decided to pull out of many big auto shows, saying Stellantis should have made better use of its small marketing budget. Tavares responded with the question “At what point do surviving carmakers have to become battery developers, as opposed to buying cells from third parties [that do] the chemistry, the research, and so forth?” I am of the opinion that it ought to be done for a very straightforward reason: the electric vehicles that we are currently manufacturing need to solve a very significant issue, which is that you are unable to add 1000 pounds of extra weight to every car,” was his clear answer. “From my point of view, the most significant obstacle that the next generation of electric vehicles will face is to make them lighter while maintaining the same amount of energy. . to protect the range.” For an EV to be the main or only car in a North American home, he said, “500 miles should be fine.” Tavares says that to do this, you need to keep the same level of energy while cutting costs by a large amount. This means that the cells need to have about three times as much energy density. “If you do that, you will cut down on the number of cells needed,” Tavares said. It’s your goal to spend less and weigh less. You’ll go from weighing 1000 pounds to 400 or 500 pounds. Because of this, you get a cheaper car that is also much lighter. He said that this cuts down on your need for raw materials like minerals and cell metals, but more is needed. As the price of EVs goes down, more people will want to buy them, which will put more pressure on battery material sources and cause prices to go up. China currently owns a large portion of several of these minerals, so it is true that “you need to switch your battery chemistry from scarce to abundant raw materials so you don’t cause inflation and volatility.” Asked to explain the term, Tavares shrugged and said, “Maybe that’s it, or it could be something else: some [chemistry], eventually, that I don’t know today.” One thing is for sure, though: this technology is still very new. We have three new businesses and a partnership with a cell Stellantis had cut back on using electric cars in the past. Notably, the company’s late CEO, Sergio Marchionne, told people not to buy the Fiat 500e electric compliance car, which it sold in California because each one would lose the company $14,000. But how can Stellantis, which is starting from scratch, compete with cell suppliers who have been in the business for at least 15 years and have a lot of experience now that the switch to electric vehicles is a fact? One of Tavares’s statements was, “I know what we’re going to do.” “Although I am not certain that it will be sufficient, we do have our very own battery company, which is called ACC, in which we are involved the leading shareholder (at 45 percent) along with Mercedes-Benz and Total Energy.” That business has raised more than $5 billion to build four huge battery plants in Europe. It is also possible for Stellantis to win by creating new battery chemicals. It has put money into three different companies with different types of science. It put money into Factorial, a company that makes solid-state cells, in January 2022. It did the same thing with Lyten in May 2023, and it’s doing it again this month with the lithium-sulfur battery that comes with the new Chrysler Halcyon Concept electric car. In January, it added a third company, Tiamat, which makes sodium-ion batteries that don’t need lithium. Stellantis is already building two joint-venture EV battery plants in Kokomo, Indiana, even though Tavares didn’t bring it up. There, Samsung SDI is a partner. It is based in Korea. Over the next two years, the company plans to release a number of battery-electric cars. These will include the luxury SUV Jeep Wagoneer S and the off-roading electric SUV Jeep Recon. The cells from these plants will power these vehicles. Stellantis’ American company is well aware of the need for cheaper electric vehicles in addition to its planned high-end electric SUVs, as it has recently lowered the prices of Jeeps. Tavares said that because Stellantis owns the Chinese company that makes Leapmotor’s electric cars, any Stellantis plant in the US can now build them. This kind of move would meet the requirements for North American assembly, which would give the government incentives to buy electric vehicles. The CEO is also thinking about the other box, which has metals, materials, and processes for batteries from a number of friendly countries, as well as battery assembly in the US. After this year’s launches, we may find out more about cheaper EVs from Jeep, Dodge, Chrysler, and Ram, among other Stellantis companies. Tavares is one of many CEOs of automakers who have to figure out how to handle his company’s battery future for future electric vehicles (EVs) in order to compete with cars from China.
