Global auto-making giant Stellantis ( from the merger of Fiat Chrysler Peugot) plans to spend more than $35 billion through 2025 to release an array of new plug-in models to compete in the industry’s intensifying electric-vehicle race. Stellantis also plans to get more involved with battery development and sourcing, aiming to drive down costs on one of the most expensive components for an electric car, with the establishment of 5 battery factories in North America and Europe. It aims to offer electrified options under all 14 of its brands, which include Jeep, Ram, Peugeot and Citroën. Stellantis will offer two kinds of battery chemistries, a high-density option and a nickel cobalt-free alternative by 2024, as well as introduce solid-state battery technology by 2026.
Other major car companies have upped their bets on EVs and pivoting from their century-old model of selling gasoline-powered vehicles. GM just increased its planned spending on EVs to $35 billion through 2025. The increase reflects the addition of two more battery factories, on top of ones already planned for Ohio and Tennessee. Ford also has become more aggressive, unveiling an all-electric version of its bestselling vehicle, the F-150 truck. It plans to invest $30 billion in EVs through 2025. And VW is spending $40 billion through mid-decade on EVs. (That is $150 billion planned expenditures for just these four firms)!
Europe and the U.S are expected to tighten regulations limiting tailpipe emissions in the coming years, putting pressure on auto companies to lessen their reliance on gasoline-powered vehicles. Governments are also offering more incentives to get auto makers to invest in electrics. The U.S. has called for $174 billion in electric-vehicle-related spending, which includes fresh federal tax credits for purchasing plug-in cars and commercial trucks.
Meanwhile, other car companies are moving quickly to put out EVs and the marketplace is becoming more crowded, with startups such as Rivian and Lucid Motors moving closer to selling their first plug-in models. Tesla continues to expand globally and fortify its grip on the market with growing sales and new-model debuts.
Classroom discussion questions:
- You are head of OM for a large auto manufacturer. Conduct a SWOT analysis (see Chapter 2) on the move to EVs.
- How will the auto industry look a decade from now compared to today?