Stellantis, along with other global electric vehicle (EV) makers, has been hit by slowing European demand lately.
French-Italian car giant Stellantis has recently announced that the fully electric Fiat 500 model production would be stopped for four weeks, starting from Friday, as European orders for the car are still lagging.
Stellantis is also the owner of a number of other brands, such as Vauxhall, Maserati, Chrysler, Opel, Citroën and Peugeot, amongst others.
At present, the electric Fiat 500 model is produced in Turin, at the Mirafiori factory. Stellantis has also revealed that this factory site would be going through a significant transformation, which will involve a €100m investment.
This investment is expected to be used to develop a hybrid version of the currently full electric Fiat 500 model, as well as for higher performance batteries. The production of the hybrid version of the car is expected to start sometime next year and in 2026.
This move comes as the European electric vehicle (EV) market continues to see a drop in demand, especially impacting European EV makers, who have struggled to keep pace with Chinese ones.
This has led to several European EV makers, as well as battery manufacturers, to readjust their production output and expectations, in order to account for the anticipated dampened demand in the coming months.
However, this phenomena is not limited only to European EV manufacturers, as varying green incentive policies globally have thrown up obstacles for international electric vehicle manufacturers as well.
The EU has also recently imposed higher tariffs on Chinese EV makers, because of concerns of Beijing unfairly subsidising these producers, allowing them to sell their vehicles at much cheaper prices in the EU and undercutting European EV makers’ market shares.
However, this has also led to significant backlash, with concerns that this may make it more difficult for the EU to achieve its net-zero goals. This is because Chinese EVs were the most popular amongst EU electric vehicle owners, due to them being relatively cheaper and having more features.
With Chinese EVs becoming more expensive in the EU now, there are more concerns about electric vehicle ownership across the bloc suffering as a result.
Stellantis reports disappointing financial results
Stellantis recently reported weaker first half 2024 results, as its North American market share continued to decline. It recorded net revenues of €85.0bn in the first half of the year, which was a 14% fall compared to the same period last year.
Net profit came up to €5.6bn, which was a 48% plunge compared to the first half of 2023. Adjusted operating income was €8.5bn, which was €5.7bn less than the first half of last year.
Regarding the company’s first half 2024 results, Carlos Tavares, the chief executive officer (CEO) at Stellantis, said: “The company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues.
“While corrective actions were needed and are being taken to address these issues, we also have initiated an exciting product blitz, with no fewer than 20 new vehicles launching this year, and with that brings bigger opportunities when we execute well.
“We have significant work to do, especially in North America, to maximise our long-term potential.”
