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Stellantis (STLA) Puts Bold Foot Forward in the EV Space

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Per media sources, Stellantis STLA will build its next electric vehicle (EV) battery plant in Indiana, where it already has several facilities.

Sources have confirmed that the automaker has chosen Indiana for building the EV battery plant in the United States. It is likely that along with the Governor of Indiana and the company's chief operating officer for North America, it will make an announcement soon regarding the plans for its Kokomo operations.

In March, Stellantis and South Korea’s LG Energy Solution stated their intention to invest $4 billion to build an EV battery plant in Windsor, ON, which promises to be the first large-scale EV battery plant in Canada, targeting 2,500 new jobs.

In October 2021, Stellantis and South Korea's Samsung SDI announced plans for a joint venture for an EV battery plant. Production in the plant is expected to begin in 2025. It marked the second announcement for a battery plant in North America by Stellantis.

The recent announcement follows a $229 million investment pledge by STLA in October to retool Kokomo Transmission, Kokomo Casting and Indiana Transmission to produce a new fourth-generation, eight-speed transmission that could appear in electrified Jeep, Ram, Dodge and Chrysler vehicles.

Stellantis has expedited its electrification plans in recent months. The company stated that it would spend $35 billion (30 billion euros) in electrification and related software investments through 2025. It aims to cover 40% of sales in the United States and 70% of sales in Europe from low-emission vehicles by 2030.

Recently, at one of its strategy meetings, the company launched the Dare Forward 2030 plan to aid its transition to a carbon net-zero entity by 2038, with a 50% reduction by 2030. Apart from this, the auto giant aims to double net revenues to $335 billion annually by 2030 and maintain double-digit profit margins as it looks to ramp up efforts to bring electrified versions of its cars. It has planned an electric Dodge muscle car and Ram 1500 pickup for 2024. It also plans to have more than 75 Battery Electric Vehicles (BEVs) and reach global annual BEV sales of 5 million vehicles by 2030.

Shares of Stellantis have lost 24.4% over the past year compared with its industry’s 18.4% decline.

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Zacks Investment Research


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Zacks Rank & Other Key Picks

STLA currently carries a Zacks Rank #2 (Buy).

Other top-ranked players in the auto space include BRP Group, Inc. DOOO, Genuine Parts Company GPC and Standard Motor Products SMP, each carrying a Zacks Rank #2, currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BRP Group has an expected earnings growth rate of 9.2% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.2% upward in the past 60 days. BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters.

DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 17.5% over the past year.

Genuine Parts has an expected earnings growth rate of 13% for the current year. The Zacks Consensus Estimate for current-year earnings has been marginally revised 2.5% upwards in the past 60 days.

Genuine Parts’ earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of 11.34%, on average. The stock has lost 1.4% over the past year.

Standard Motor has an expected earnings growth rate of 1.4% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 2% upward in the past 60 days.

Standard Motor’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 40.34%, on average. The stock has lost 14.2% over the past year.


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