Can a cheap Jeep EV turn things around for Stellantis?

Stellantis CEO Carlos Tavares admitted to making “arrogant” mistakes in the brand’s U.S. operations that have been weighing heavily on the automaker for months.

Driving the news: Stellantis faces three main concerns causing sales declines (-10% in Q1) and bloated inventories (100+ days’ supply):

• Not selling inventory fast enough due to high average listing prices ($57,266) and a pullback on incentives.

• Manufacturing issues at two plants.

• Lackluster go-to-market strategies. 

What they’re saying: “We had a convergence of three things that should have triggered, from me and nobody else, an immediate task force to address those things. I should have acted immediately recognizing that the convergence of those three problems was there,” said Tavares at the company’s recent Investors Day.

To turn things around, the automaker expects to grow sales of Jeep vehicles globally by 50% in the next three years, shooting for 1.5 million units by 2027. 

Key strategies:

• Jeep's lineup will expand from 10 to 13 models, with a combined 27 different powertrain options.

• The brand is also introducing the Wagoneer S EV, the Recon off-road vehicle, and a midsize SUV to replace the Cherokee.

• Combatting affordability hurdles by planning a sub-$25,000 Jeep Renegade EV by 2027 to compete with EVs from Chinese automakers.

Looking ahead: Hitting that $25,000 EV magic number has been a struggle for all automakers. Even Tesla shelved its expected low-cost model. But, cheap Chinese EVs are taking more market share around the world. So, global companies like Stellantis have to come to market with vehicles that average consumers can actually afford and want to buy. We’ll see if the brand can pull it off.

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