STLA - Stellantis Just Passed Ford and GM in the Electric Vehicle Race. Is It a Buy?
2023-12-10 10:48:00 ET
Right now major automakers are battling to turn their electric vehicle (EV) lineups into a profitable segment. Ford Motor Company projects its EV unit will check in with a $4.5 billion loss for 2023 -- a hefty chunk of change lost. And while General Motors plans to produce profitable EVs in 2025, a year ahead of Ford, Stellantis (NYSE: STLA) shocked everyone with an announcement about its EVs this week.
At a Goldman Sachs conference on Wednesday, Stellantis CEO Carlos Tavares declared that the company was "in the black" on EVs not only in Europe, but in the U.S. as well. The comment took many by surprise, especially considering that to spur a higher volume of sales the pricing has to stay affordable, making margins difficult to generate. In that equation, the only way to really produce profitable EVs at the moment is to be super strict on cost.
"Our margins on electrified vehicles are in the black. That's a good thing. We are closing the gap against ICE faster in Europe than in U.S. because we started sooner, but we are achieving results and we see that all of this is going to be exciting," Tavares said.
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Stellantis Just Passed Ford and GM in the Electric Vehicle Race. Is It a Buy?