After flying start, Stellantis must tackle Tesla and China

After flying start, Stellantis must tackle Tesla and China
# 18 January 2022 16:45 (UTC +04:00)

If playing catch up with Tesla is what everyone in the auto industry is about then Stellantis, the company formed from the merger of Fiat Chrysler and Peugeot, has had a good start – its shares have far outpaced its U.S. rival in its inaugural year, APA reports citing Reuters.

But this is just the first lap.

Fixing its business in China and overcapacity in Europe are just two areas where analysts want to see Stellantis (STLA.MI) making progress when Chief Executive Carlos Tavares unveils his detailed business plan on March 1.

After all, despite its shares surging more than 60% since their debut on Jan. 18, 2021 - compared with a 27% gain for Tesla's (TSLA.O) - Stellantis' market value of 59 billion euros ($67 billion) is still just 6% of its U.S. rival's.

A strong first year augurs well, though, with Jefferies analysts saying Tavares has shown vision and ambition with a "sustained stream of strategic initiatives."

Since forging the world's No. 4 carmaker by production, Tavares has mapped out a 30 billion euro electrification strategy, and formed alliances with Amazon and iPhone assembler Foxconn to accelerate development of software and semiconductors for future connected vehicles.

He has also drawn up plans for five battery plants and cut deals with unions to keep streamlining its European operations - side-stepping potential labour conflicts and pushing the company's operating profit margin up to around 10%.

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