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Jeep's electric plans come into sharper focus amid market jitters

Luke Ramseth, The Detroit News on

Published in Business News

Jeep's growing lineup of electrified models could help spark a turnaround for the legendary SUV maker, but it might be coming at a less-than-ideal time.

Annual sales for the Stellantis NV brand have declined for five straight years, falling to under 650,000 last year from close to 1 million sold in 2018. And sales of electric vehicles overall aren't growing as quickly as the industry anticipated.

But a bright spot of late has been Jeep’s increasingly popular plug-in hybrid models, or PHEVs, the Wrangler 4xe and Grand Cherokee 4xe. Last year, they ranked No. 1 and 2 for sales in the segment. By this year’s first quarter, Wrangler 4xe made up half of the rugged SUV’s overall sales, while Grand Cherokee 4xe was almost a quarter of the model's overall total.

Jeep CEO Antonio Filosa recently told CNBC he expects to sell up to 50% more PHEVs this year than last, or around 160,000 to 170,000 total. And soon, the brand plans to expand its hybrid offerings into vehicles, including the Gladiator pickup and Wagoneer and Grand Wagoneer SUVs.

As rival automakers pull back on their fully-electric vehicle plans amid bumpy demand, high prices and mounting losses, Jeep is pushing ahead by unveiling its first full EV in North America, the upscale Wagoneer S, late last month in New York City. The initial Launch Edition trim will cost $71,995, including delivery, and is expected to reach dealers this fall. After that, the brand says it will release a fully electric Wrangler-like vehicle, the Recon, estimated to be priced in the $60,000 range.

And not wanting to miss out on the more affordable EV market — an important area for automakers amid consumer price-sensitivity and the threat of super-cheap Chinese EVs — Stellantis CEO Carlos Tavares said at a conference late last month that a $25,000 electric Jeep will come to the United States “very soon.”

Tavares said at the conference that there are “a huge amount of opportunities here in the U.S.” when it comes to selling electrified models. “We are just starting the offensive of our electrification,” the CEO said. “We are already the No. 1 in PHEV sales.” He added that Stellantis, overall, plans to introduce “around six-to-eight” electric models in the United States this year.

Jeep in 2022 committed to launching four all-electric SUVs between North America and Europe by 2025, part of an overall Stellantis goal to sell 100% EVs in Europe and 50% in the United States by the end of the decade.

But the growth rate of EV sales in the United States overall has been slowing, with first-quarter sales up slightly over a year earlier but down 15% compared to the prior quarter, according to Cox Automotive.

It will be challenging for Filosa, who took over as Jeep CEO late last year, to get Jeep’s overall sales back on track while simultaneously navigating the uneven EV transition, a recent AutoForecast Solutions report said.

“With the Wrangler 4xe as the most popular plug-in hybrid model sold in the U.S., the groundwork has been laid, but the uphill battle will begin as new fully electric models join the lineup,” the report noted.

 

Sam Fiorani, AutoForecast’s vice president of global vehicle forecasting, said while the timing of the new Jeep EV launches might not be ideal given the current market, “it’s not like you can change that course quickly” considering the extensive development and multiple stakeholders involved in launching any new car.

And Jeep’s new EVs should provide advantages beyond pure sales numbers, he said. They can help keep the brand fresh and introduce it to new and younger buyers. And amid tightening emissions standards, the electric models — along with Jeep’s PHEVs — will help offset sales of some of the brand’s popular gas-guzzling SUVs, so it doesn’t need to purchase carbon credits.

Stephanie Valdez Streaty, director of industry insights at Cox Automotive, said it’s a big deal that Jeep plans to release an EV in the $25,000 range in the near future. Affordability remains a major issue holding back wider EV adoption in the United States, she said, with consumers constantly thinking: What’s my monthly payment going to be?

In addition, she said Jeep offering a wide portfolio of different types of all-electric and hybrid vehicles at different price points is a smart approach. Consumers like new products.

“It’s key that they’re finally going to offer something (all-electric), and take advantage of their PHEV domination,” she said.

The new Wagoneer S is aimed at a more luxury-oriented buyer who wants a larger SUV, around the size of a Grand Cherokee. Jeep says it’s fast, with a 0-60 mph time of 3.4 seconds, and that it offers about 300 miles of range. The brand has said it’s looking to take on the best-selling Tesla Model Y.

Details on the Recon haven’t been released, but pictures show a more rugged and boxy look, with features like removable doors, similar to the Wrangler.

Other upcoming electrified Jeeps include plug-in “range-extender” versions of the gas-powered Wagoneer and Grand Wagoneer full-size SUVs, which will be released next year, executives confirmed recently.

Jim Walen, a Jeep dealer in Seattle, said he expects there will be healthy demand for the Wagoneer S, given its solid range, luxury features, and the simple fact that it's an EV with a Jeep badge on it.

Tavares’ recent statements about a $25,000 Jeep EV were also a welcome message, Walen added: “A cheap Jeep, a $25,000 Jeep that’s all electric — wouldn’t we all like to have that?"


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