Stellantis recalls 194,000 PHEV Jeeps over fire risk

Stellantis is recalling almost 194,000 plug-in hybrid (PHEV) Jeep SUVs worldwide due to a fire risk — posing a major challenge to the automaker's lead in the segment. The recall includes 154,000 vehicles in the U.S. alone, impacting 2020-2024 Jeep Wrangler 4xe and 2022-2024 Jeep Grand Cherokee 4xe models.

Why it matters: Plug-in hybrids have been one of Stellantis’ few bright spots this year despite broader sales struggles. But, with a sales slump and high inventory, this recall could further hurt consumer and dealer trust, which Stellantis can't afford.

Driving the news: The recall follows reports of 13 fires in parked and turned-off vehicles, according to the National Highway Traffic Safety Administration (NHTSA). Stellantis traced the issue to a defective battery component, which could pose a fire risk in up to 5% of affected vehicles.

• Until a fix is available, Stellantis advises owners not to recharge their vehicles and to park away from structures and other cars.

• The company promised an "imminent" fix. It will notify customers when to schedule service.

Between the lines: The PHEV recall is a particularly heavy blow because plug-in hybrids were one of the few segments that had been performing well for Stellantis. PHEVs made up 9.4% of Stellantis’ total U.S. volume in Q2—up from 8.4% in the previous quarter—and far outpaced Toyota, its closest competitor.

The broader context: Stellantis has been grappling with declining U.S. sales, which fell 16% in the first half of 2024. Weak demand has hit its brands hard, and as a result, inventory levels have ballooned, forcing Stellantis to take action.

• To combat the surplus, Stellantis accelerated its reduction plan. It aims to cut U.S. inventory to 330,000 vehicles by year-end. So, it is offering steep discounts on 2024 and older models.

• The automaker also plans to ship 200,000 fewer cars to U.S. dealers in the year's second half than in the first half of 2023, doubling its initial cut.

The big picture: Stellantis blames a "deterioration in the global industry" and competition from Chinese automakers for its troubles. Now, this recall threatens to destabilize one of its most successful segments, putting extra strain on the company.

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