Stellantis $STLA ( ▼ 6.75% ) American brands chief Tim Kuniskis says the company’s move to kill its plug-in hybrid electric vehicles (PHEVs) in the U.S. came down to two main factors: lack of demand and cost.
The details: In an one-on-one interview with Kelley Blue Book’s Jason Fogelson, Kuniskis, who also serves as the company’s head of North America marketing and retail strategy as well as CEO of Ram, shared more insight on the decision to scrap PHEVs.
Battery EVs have a big gap between what customers will pay and what the technology costs, squeezing profits and forcing tough tradeoffs, explained Kuniskis.
Automakers built battery capacity for demand that was “artificially inflated” rather than true customer pull, which is why major write-offs are happening, he added.
PHEVs still have a cost gap, but HEVs are closest to matching customer willingness to pay, so Jeep is leaning into an HEV Cherokee as the most viable path.
“It was a prioritization of what we can recoup in the marketplace,” Kuniskis told Fogelson. “Because at the end of the day, the customer’s willing to pay what the customer’s willing to pay, and it’s either going to come out of our margin or lower sales.”
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Why it matters: For Stellantis dealers, this is a clear signal that the factory is pivoting hard toward hybrids and range-extended products that pencil better for both OEM and customer. That means less energy spent trying to push expensive PHEVs uphill, and more opportunity to match “real-world” payment expectations.
Between the lines: Kuniskis said the cost structure of EVs and the realities of battery size make the case for the extended-range Ram 1500 REV.
Even though a range-extended electric truck adds an engine and generator, it can cost less than a fully battery-electric truck because both still use EDMs (electric drive modules) and a battery, he explained.
The fully electric version needs an enormous battery pack (e.g., 168–229 kWh), which dominates the vehicle’s cost.
But by using a smaller battery in the range-extended version (e.g., 92 kWh), battery cost can be cut dramatically, for example, to $11,000 from roughly $22,000, he said, calling it a game-changer.
“I get all the advantages; I get none of the customer disadvantages,” said Kuniskis. “I don’t have to worry about infrastructure, I don’t have to worry about range, I don’t have to worry about towing, I don’t have to worry about temperature, and I’ve got a lower cost for us, so I can be more price competitive.”
Big picture: As long as battery costs outstrip what buyers are willing (or able) to finance, pure BEVs and PHEVs will struggle to scale profitably at the mass-market level.
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