A significant moment came in yesterday’s Stellantis future strategy presentation when CEO Carlos Tavares spoke of the company's “pride” at being a legacy car maker. 'Legacy' has long been seen as a dirty word among auto maker investors, many of whom see companies with outmoded operations, outsized payroll and a creaking industrial base in comparison with more nimble start-ups.
Yesterday’s event, held in Amsterdam, Stellantis’ official corporate home, was partly about convincing the assembled analysts and journalists that this conglomeration of historical brands - now a year old - was worth more than its sluggish stock price suggested.
Investors have not reacted as you might have expected to Stellantis’s recently posted profit of €13.4 billion (£11.2bn) representing an outstanding 11.8% profit margin. The company’s share price has remained sluggish and its valuation based on that price is still behind that of US start-up Rivian. Tesla meanwhile remains the beacon for automotive investors.
However, Tavares pitched a strong case for legacy in the strategy, dubbed Dare Forward 2030. “It shows a serious commitment and ability to manufacture efficiently at scale. It shows grit, perseverance and staying power,” he said. “Other companies have yet to prove this.”
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He admitted Stellantis needs to learn the skills of younger firms (which he didn’t name), to vertically integrate elements like software. But he also said they have lessons to learn from Stellantis. “They know when they reach one million vehicles [per year], they will have problems with high-volume efficiencies in their plant quality,” he said. “We have to learn faster than they do.”
He laid out plans described as “very challenging and ambitious” that called for a “shift in mindset”. For example, the company will speed up the transition to EVs, with all brands going electric in Europe by 2030. By the same date, sales of its US brands will be 50% EV. It will launch 75 all-electric models by 2030 and it will launch only electric models for its premium brands from 2025 on.
Teases and reveals of future models in the presentation were almost exclusively restricted to US-centric brands, including an electric Jeep, an electric Ram pick-up and electric Dodge muscle cars.
He promised analysts that this will be done with utmost cost efficiency. Distribution costs, including those incurred by selling through dealers, will fall 40% by 2030. The cost of EVs also will tumble by 40%.