Stellantis leadership shake up, incoming EV sales surge, VinFast delays U.S. factory

Hey everyone. The CDG podcast is back tomorrow with another edition of the CDG Market Update, a monthly discussion with automotive industry experts and dealers about where our car market is today — and where it may headed. Stay tuned.

— CDG

1. Stellantis keeps losing key executives

Top line: Stellantis Chief Customer Experience Officer Richard Schwarzwald has resigned from his position, marking the third key executive departure from the company this month.

At a glance: In a press release containing other organizational changes, the automaker attributed the departure to “personal reasons” and announced Olivier Bourges as Schwarzwald’s replacement. Bourges’ previous position was head of Stellantis’ Global Corporate Office and Public Affairs department.

Background: Schwarzwald held his position as Chief Customer Experience Officer since 2021, but had worked at Fiat since 2004, well before its merger with Chrysler and other automakers.

• Jason Stoicevich, formerly the company’s Senior Vice President of U.S. Retail Sales, left after holding his position for only two months. 

• Tim Kuniskis left his role as CEO of Ram and Dodge, ending a tenure spanning three decades.

These exits come at a critical time for Stellantis. While executives such as CEO Carlos Tavares have emphasized the brand’s enviable profit margins, buoyed by unwavering pricing, its sales have been on the decline in key markets.

• In the U.S., for instance, sales fell 10% year-over-year during the first quarter even as Ford and General Motors reported stable numbers.

• That marks the second consecutive year where Stellantis’ Q1 losses were greater than 9%.

Bottom line: Time will tell if these rapid-fire departures will produce some positive changes.

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2. State of play: The EV market

Big picture: Data suggests electric vehicle sales are on the cusp of another surge, raising question marks around manufacturer plans to postpone factory launches and new model releases.

In fact, six out of the top-ten EV brands reported more than 50% growth in EV sales. Let’s take a look at the losers and the winners.

The losers: The companies that performed worse in Q1 share many of the same weaknesses.

• General Motors and Tesla, which saw respective EV sales declines of 20.5% and 13.3%, lack new models, giving customers little reason to remain loyal to their brands amidst a wave of fresh entries from rival manufacturers. 

• The product catalogs for both companies are also weak, with GM missing hybrids at a critical spike in demand and Tesla carrying only one SUV (granted, the most popular SUV, but still just one).

• GM also canceled its best-selling Chevy Bolt at the end of last year, limiting its growth.

The winners: The automakers with stronger EV sales also have similarities.

• Hyundai and Toyota, for instance, both have a slew of fresh models hitting the market, including new entries in the KONA and IONIQ lineups. 

• Toyota, which still has only one fully electric model, is also seeing massive success with its hybrid offerings, which, at 206,850 units, accounted for 36.6% of its Q1 volume in the U.S.

What’s more: Nevertheless, automakers seem to be taking lessons from the losers rather than the winners. Even though new models that cater to consumer interest are driving excellent results, brands such as Ford and Volkswagen are halting plans to expand EV production and debut products.

Bottom line: First, some automakers overprepared for the EV transition, launching too many models at once. Now, it seems some manufacturers may be at risk of under-preparing, canceling projects just as the market gains more capacity.

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3. VinFast suspends plans to build U.S. EV factory

Top line: Vietnamese EV-maker VinFast is reportedly postponing its North Carolina manufacturing plant just over a year after launching sales in the U.S.

The context: Like other EV startups, VinFast has struggled to gain market share in the U.S., selling less than 1,000 units in the country. However, two things set it apart from its peers in the business.

Direct sales: the EV brand elected to switch from direct sales to franchising in the U.S., partnering with dealers across multiple states.

• In its fourth-quarter report, the automaker said its new sales network would lead to stronger 2024 sales.

• Most of its competitors sell directly to consumers, with only Fisker, now teetering on the edge of bankruptcy, adopting a similar model.

Powerful backers: VinFast is owned by VinGroup, Vietnam’s largest conglomerate, which straddles a multitude of business sectors including real estate and healthcare.

• Both brands were founded by CEO Phạm Nhật Vượng, the country’s first billionaire.

• While it is not the only fledgling EV brand to have the backing of a multi-billion dollar parent company (Polestar is run by Volvo), VinFast’s subsidiary status offers protection that competitors like Rivian lack.

The intrigue: While the company sold a global total of around 35,000 units last year, its home country accounted for the vast majority of its business. Most of its “sales” (~70%) went to affiliates of VinFast, such as Green SM, an electric taxi company also owned by Vượng.

Bottom line: Delaying its EV factory could also potentially delay VinFast from qualifying for EV tax credits, a must-have if it hopes to capture more market share in the U.S.

• Volkswagen is working on a cheaper EV in an effort to win back market share from China’s domestic automakers.

• BYD showcased new hybrid technology this week after an EV sales decline over the first quarter.

• Tesla is promising factory tours to shareholders that vote for Musk’s controversial pay package.

• Jeep is planning to build the Wagoneer S EV in Mexico rather than the U.S.

• Volkswagen dealers are worried about the challenges of selling the upcoming ID7 EV.

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Thanks for reading everyone.

— CDG