A view shows the logo of Stellantis at the entrance of the company’s factory in Hordain, France, July 7, 2021. REUTERS/Pascal Rossignol/Files
July 8, 2021
MILAN (Reuters) -Stellantis softened up investors ahead of its electrification strategy event on Thursday by hinting that it had a better than expected start to 2021 despite a chip shortage that has hit automakers worldwide.
Stellantis, which was formed in January from the merger of Italian-American automaker Fiat Chrysler and France’s PSA, faces an investor community keen to hear how it plans to come up with a range of electrified vehicles (EVs) to rival Tesla.
At its “EV Day 2021” kicking off at 1230 GMT, Stellantis will disclose significant investments in electrification technology and connected software as it aims to be an industry frontrunner, it said in a statement.
In April, Chief Executive Carlos Tavares said it would offer low emission versions – either battery or hybrid electric – of almost all of its European models by 2025, and they should make up 70% of European sales and 35% of U.S. sales by 2030.
Stellantis has 14 brands in its stable, including Jeep, Ram, Opel, Fiat and Maserati.
At a similar EV strategy event last week, European rival Renault announced that 90% of its main brand models would be all-electric by 2030, whereas previously it had included hybrids in its target.
Stellantis said its margins on adjusted operating profits in the first half of 2021 were expected to exceed an annual target of between 5.5% and 7.5%, despite production losses due to a global shortage of semiconductor supplies.
The carmaker’s Milan-listed shares were down 3% at 0800 GMT, underperforming the European car index which was 2% lower. Analysts at Jefferies said the Stellantis updates on margins were good but already expected.
The carmaker said a positive pricing and product mix helped it to expect a “strong margin performance” in the first half.
“The global Stellantis team has also responded strongly to volume constraints caused by semiconductor shortages, implementing very effective cost control measures,” it said.
Stellantis said it expected a negative industrial free cash flow in the first half, also caused by the negative impact of lower than planned production volumes, which was in line with previous forecasts.
It said, however, that synergies from its merger were well on track to exceed the first year’s target and would help to contribute to a positive cash flow for the year as a whole.
Stellantis has promised more than 5 billion euros ($5.9 billion) in annual synergies.
($1 = 0.8475 euros)
(Reporting by Giulio Piovaccari; Editing by Agnieszka Flak and David Clarke)
Source: One America News Network
