Stellantis Adapts to EV Challenge, Follows Tesla's Lead by Cutting Costs Through Global Job Shifts
Portfolio Pulse from Anusuya Lahiri
Stellantis NV is shifting its engineering recruitment to lower-cost countries like Morocco, India, and Brazil to counter cheaper Chinese EVs and reduced demand. The move aims to reduce costs amid declining EV demand, a strategy also seen in other Western automakers like Tesla Inc and Volkswagen AG. Stellantis plans to cut jobs, including 400 engineering positions in Michigan, and aims for two-thirds of its engineering workforce in cost-effective regions. Despite a 12% drop in net revenues to $44.6 billion in Q1, Stellantis is launching 25 new models in 2024. Its stock gained 38% in the last 12 months, with exposure through FTHI and KOMP ETFs.
May 02, 2024 | 1:15 pm
News sentiment analysis
Sort by:
Ascending
NEUTRAL IMPACT
Stellantis is adapting to EV market challenges by relocating jobs to lower-cost countries and planning significant job cuts, including in the US. Despite a revenue drop, it's launching new models and its stock has risen.
Stellantis's strategic shift to lower-cost regions and job cuts could lead to operational efficiencies and cost savings, potentially offsetting the negative impact of reduced demand for EVs and a drop in Q1 revenues. The stock's past performance indicates resilience, but the market's reaction to these strategies will be key to short-term price movement.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
Tesla Inc, like Stellantis, is cutting jobs and relocating production to more affordable locations in response to declining EV demand.
Tesla's inclusion in the article as a company also engaging in job cuts and production relocation suggests a sector-wide trend among automakers to address declining EV demand. While the direct impact on Tesla's stock is uncertain, it highlights industry challenges that could influence investor sentiment.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 50
POSITIVE IMPACT
First Trust BuyWrite Income ETF offers exposure to Stellantis stock, which has gained 38% in the last 12 months.
Given Stellantis's significant stock gain in the past year, ETFs like FTHI that offer exposure to Stellantis may see positive sentiment from investors seeking to capitalize on Stellantis's market performance.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 40
POSITIVE IMPACT
SPDR S&P Kensho New Economies Composite ETF, which includes Stellantis, could benefit from Stellantis's 38% stock gain in the last 12 months.
KOMP's inclusion of Stellantis, with its notable stock performance, may attract investors interested in the automotive sector's growth, particularly in EVs, suggesting a positive outlook for KOMP's performance.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 40