The maker of Chrysler, Dodge, Jeep and Ram vehicles early Wednesday reported record financial results for the first half of 2023, boosted by improved shipments of microchip deliveries compared to 2022.
Stellantis NV reported a record $12.1 billion (10.9 billion euro) net profit, up 37% year-over-year for the first six months, on a best-ever $109 billion revenue (98.4 billion euro), a 12% increase from higher shipments. An 11% increase in adjusted operating income to a record $15.6 billion (14.1 billion euro) represented a 14.4% group-wide margin compared to 14.5% a year ago. Worldwide, inventory was at 1.37 million vehicles, up from 845,000 a year ago.
“Our outstanding performance in the first half of this year supports our long-term sustainability and our ability to achieve the bold ambitions of our Dare Forward 2030 plan,” CEO Carlos Tavares said in a statement. “We are well-positioned for the remainder of 2023 and beyond.”
North America supported the financial results with a 4% increase in adjusted operating income to a best yet $8.88 billion (8.03 billion euro) from higher net pricing and volume growth. That represented a 17.5% margin, which was down from 18.1% a year ago.
Those results come just after the United Auto Workers union kicked off tense contract negotiations with Detroit’s three automakers earlier this month. UAW President Shawn Fain has pointed to billions of dollars in profits the automakers have made in recent years, emphasizing now is the moment to win back benefits like cost-of-living adjustments and pensions and secure wages and benefits for workers at joint-venture electric vehicle battery plants. The future of the now-idled Jeep Cherokee plant in Belvidere, Illinois, also will be on the table. The UAW’s Canadian counterpart, Unifor, also will begin contract talks next month.
The automakers have emphasized the need for increased productivity and ability to stay competitive with their rivals.
Tavares has said Stellantis must absorb the 40% increase in cost to build an EV over an internal combustion engine vehicle, avoid passing those additional costs consumers and prevent risking its double-digit adjusted operating income margin. Buyouts in April were made available to 31,000 hourly workers in the United States and Canada and 2,500 U.S. salaried employees.
Industrial-free cash flows finished the second quarter at $9.58 billion (8.66 billion euro), up 63%. Stellantis will need those funds to fulfill its electric and technology-infused transformation. The automaker is investing $35.5 billion in electrification and software by 2025 and expects half of its sales in North America will be all-electric from a 25-vehicle lineup.
Globally, EV sales grew by 24%, and with a 28% increase in EVs and plug-in hybrids, it finished second in the United States for low-emission vehicle sales, it said, citing S&P Global Inc. data. Earlier this month, Stellantis shared details on one of four EV platforms: the up to 435-mile range STLA Medium.
The EVs soon will be coming to the United States. Ram is expected to launch an all-electric ProMaster commercial van before the end of the year in Saltillo, Mexico, with major EV launches from Dodge, Jeep and Ram coming in 2024. Stellantis also is bringing more plug-in hybrids to market with deliveries beginning on the Alfa Romeo Tonale. The gas-powered Dodge Hornet crossovers also are arriving in showrooms with the hybrid models coming soon.
To support EV production, Stellantis on Monday announced it will build a third battery plant in North America, its second with Samsung SDI under their StarPlus Energy joint venture in the United States. A location has not been shared.
Other regions also posted double-digit margins driven by higher pricing and volumes. Adjusted operating income rose in Europe by 15%, in Africa and the Middle East by 130% as Stellantis expanded into new markets and announced plans to increase production there, in South America by 7% and in Asia by 9%.
The results at the Maserati luxury brand, whose adjusted operating income was 9.2%, also increased by 95%. The Trident brand begins sales this year of its first EV in the GranTurismo
The results surpassed at least one crosstown rival. General Motors Co.’s net income was $4.9 billion in the first half of 2023, up 7% year-over-year, prompting it to increase its guidance for the year by $1 billion. Ford Motor Co. will report second-quarter earnings on Thursday after the bell.
bnoble@detroitnews.com
Twitter: @BreanaCNoble