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How Stellantis will tackle its electric future

Breana Noble, The Detroit News on

Published in Automotive News

PSA last year announced the Automotive Cells Co. with French gas and oil company Total SE and its battery manufacturer Saft Groupe SA. Development of the lithium-ion batteries is happening in France, and production should begin by the end of 2023. It's not clear if the collaboration could extend to the North American market.

"The battery is the key component in the future, which makes the car more attractive or less attractive," said Ferdinand Dudenhöffer, a professor of automotive economics at the Center for Automotive Research at the University of Duisburg-Essen in Germany. "They can better do the transformation using its own manpower, own facilities and at the moment possibly the scales. It's the best strategy to have a stronger vertical integration than outsourcing like the past 30-40 years."

And with most battery production being done currently in Asia, governments are supporting domestic production with incentives to avoid job cuts in the transition: French and German public authorities, for example, are supporting Automotive Cells with $1.6 billion for the project representing an almost $6 billion investment. Two possible manufacturing sites could grow to 32 gigawatts of capacity each.

Stellantis isn't alone. GM is working with LG Chem Ltd. on a $2.3 billion battery cell plant in northeast Ohio set for completion by 2022. Volkswagen this month said a joint venture with Northvolt AB will produce batteries in Germany by early 2024. Ford is examining the possibility of manufacturing its own batteries, too.

"The company that wins the EV or AV car race isn't going to be a company, but companies, merging several disciplines to produce these advanced vehicles," said Karl Brauer, executive publisher at auto information website "Having this integration is huge for every company, including Stellantis. It's going to allow for faster movement and for them to be specialized in an area that is critical for distribution."

If consumers are willing to buy EVs, the limiting factor for production will be the lack of battery-cell capacity, said Sam Abuelsamid, Guidehouse's principal e-mobility analyst: "What you don't want to do is to be standing in line at the battery supplier, fighting to get a share of the batteries."


PSA in 2018 also formed a joint venture with Japan-based Nidec Corp. to build electric motors at its Trémery engine plant in France with the expectation of manufacturing hundreds of thousands of the components. Production is expected to begin by the end of next year.

The company has two joint ventures with Belgium's Punch Powertrain NV for production of its electrified transmissions for Stellantis and other automakers at Stellantis' facility in Metz, France, for next-generation hybrids. Production is expected to begin in early 2023.

In electrification advancements, Tavares points to the work FCA has invested with Archer Aviation Inc., an electric vertical take-off and landing aircraft startup. The automaker has lent its supply-chain, design and engineering know-how to help the manufacturer launch production in 2023. But Tavares sees "offensive" value in the partnership contributing to the development of lightweight, fast-charging batteries and better energy management systems that also can help EV development.

'Less differentiation'


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