Stellantis Posts Record Results; Tavares Warns of Reduced Pricing Power
2022.07.28 19:06
Stellantis (STLA) Posts Record Results; Tavares Warns of Reduced Pricing Power
By Michael Elkins
Stellantis NV (NYSE:STLA) posted a record first half to 2022 on Thursday with revenues up 17% and electric vehicle sales up nearly 50% compared to the same time last year. These results place the automaker in third place for electric vehicle sales in the United States and second in the EU30 market.
“In a demanding global context, we continue to ‘Dare Forward’, delivering an outstanding performance and executing our bold electrification strategy. Together with our employees’ resiliency, agility and entrepreneurial mindset, and our innovative partners, we are shaping Stellantis into a sustainable mobility tech company that’s fit for the future. I would like to express my sincere appreciation to all Stellantis employees for their commitment and their contribution to these results.” — Carlos Tavares, CEO
Stellantis’ strong performance so far this year could be attributed to strong pricing and high-margin vehicle sales. However, Tavares warned that rising production as the chip shortage eases could hit the industry’s ability to raise prices in 2023.
The industry has benefited from what Tavares called a “sweet spot” where a lack of core parts like semiconductor chips has hurt production, but high demand for vehicles has allowed automakers to charge more and raise profits despite high energy and raw material costs.
If production rises “the pricing power of the industry will be somehow reduced, which means you may have pressure on the margins,” Tavares told reporters on Thursday. “We do not want to be squeezed in a situation where transaction prices are under pressure and inflation costs are still there.”
