Stellantis N.V. Stock

Stellantis N.V. (Stellantis) is a global automaker and mobility provider, which engages in designing, engineering, manufacturing, distributing and selling vehicles, components and production systems worldwide. Stellantis designs, engineers, manufactures, distributes and sells vehicles across five portfolios, such as luxury vehicles under the Maserati brand; premium vehicles covered by Alfa Romeo, DS and Lancia brands; global sport utility vehicles under the Jeep brand; American brands covering Dodge, Ram and Chrysler vehicles and European brands covering Abarth, Citroën, Fiat, Opel, Peugeot and Vauxhall vehicles.

Stellantis centralizes design, engineering, development and manufacturing operations, to allow it to efficiently operate on a global scale. Stellantis supports its vehicle shipments with the sale of related service parts and accessories, as well as service contracts, worldwide. Stellantis makes retail and dealer financing, leasing and rental services available through its subsidiaries, joint ventures and commercial arrangements with third party financial institutions. In addition, Stellantis operates in the production systems sector under the Comau brand.

The company focuses on software also includes the deployment of technology across its vehicle platforms and leveraging Over-The-Air (OTA) features and services. The company has created Stellantis Ventures which funds investments in early and later-stage startup companies that develop innovative, customer-centric technologies that targets the automotive and mobility sectors. The company's decarbonization strategy includes cutting CO2 vehicle emissions by offering a wide range of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) and innovation through low-carbon technologies; (ii) moving forward into a carbon-efficient production system by embracing green energy and reducing emissions and improving the environmental performance of the supply chain through a strong engagement of its supply chain to mitigate emissions.

Stellantis' activities during the year ended December 31, 2023, were carried out through the following six segments: North America: Stellantis' operations to manufacture, distribute and sell vehicles in the United States, Canada and Mexico, primarily under the Jeep, Ram, Dodge, Chrysler, Fiat and Alfa Romeo brands. Manufacturing plants are located in: U.S., Canada and Mexico; Enlarged Europe: Stellantis' operations to manufacture, distribute and sell vehicles in Europe (which includes the 27 members of the European Union, the United Kingdom (U.K.) and the members of the European Free Trade Association).

Under the mainstream brands Citroën, Fiat, Opel, Peugeot, Vauxhall, premium brands Alfa Romeo, DS and Lancia. Manufacturing plants are located in: France, Italy, Spain, Germany, the U.K., Poland, Portugal, Serbia and Slovakia; Middle East & Africa: Stellantis' operations to manufacture, distribute and sell vehicles primarily in Turkey, Algeria and Morocco under the Peugeot, Citroën, Opel, Fiat and Jeep brands. Manufacturing plants are located in Morocco, Algeria and Turkey, through the company's joint venture with Tofas-Turk Otomobil Fabrikasi A.S. (Tofas); South America: Stellantis' operations to manufacture, distribute and sell vehicles in South and Central America, primarily under the Fiat, Jeep, Peugeot and Citroën brands, with the largest focus of its business in Brazil and Argentina. Manufacturing plants are located in the main markets of Brazil and Argentina; China and India & Asia Pacific: Stellantis' operations to manufacture, distribute and sell vehicles in the Asia Pacific region (mostly in China, Japan, India, Australia and South Korea) carried out in the region through both subsidiaries and joint ventures, primarily under the Jeep, Peugeot, Citroën, Fiat, DS and Alfa Romeo brands. Manufacturing plants are located in India and Malaysia, through its joint operation India Fiat India Automobiles Private Limited (FIAPL JV) and its wholly owned subsidiary Stellantis Gurun (Malaysia). In China, the company had its joint venture with GAC Fiat Chrysler Automobiles Co (GAC-Stellantis JV) until production ceased in January 2022. GAC JV filed for bankruptcy in November 2022

The company's Citroën and Peugeot branded vehicles are manufactured in China by Dongfeng Peugeot Citroën Automobiles (DPCA) under various license agreements; and Maserati: Stellantis' operations to design, engineer, develop, manufacture, distribute worldwide and sell luxury vehicles under the Maserati brand. Design, engineering and manufacturing plants are located in Italy. Stellantis also owns or holds interests in companies operating in other activities and businesses. These activities are grouped under Other Activities, which primarily consists of its pre-owned car business, the company's industrial automation systems design and production business, under the Comau brand name, mobility businesses through the brands Free2move and Share Now, the company's software and data businesses, and other investments, including Archer Aviation Inc (Archer), as well as the financial services activities of dealer and customer financing primarily in North America, Enlarged Europe, South America and China. Also included are the company's companies that provide services, including accounting, payroll, tax, insurance, purchasing, information technology, facility management and security for the company and management of central treasury activities.

Design and Manufacturing

The company sells vehicles in the SUV, passenger car, truck and LCV markets. The company's SUV and CUV portfolio includes vehicles such as the Grand Wagoneer, Jeep Grand Cherokee, Jeep Meridian, Jeep Avenger, Alfa Romeo Tonale, Citroën C5 Aircross, Dodge Hornet, DS 3 Crossback, Maserati Grecale and Peugeot 3008. The company's passenger car product portfolio includes vehicles, such as the Opel and Vauxhall Mokka, Fiat New 500, Alfa Romeo Giulia, Citroën C3, Lancia Ypsilon, Maserati Quattroporte and Peugeot 308, and minivans such as the Chrysler Pacifica. The company sells light duty and heavy duty pickup trucks, such as the Ram 1500, Ram 2500/3500, Fiat Strada, Peugeot Landtrek, Jeep Gladiator, and chassis cabs, such as the Ram 3500/4500/5500. The company's LCVs include vans, such as the Fiat Professional Doblò, Peugeot Partner, Citroën Berlingo, Opel/Vauxhall Combo and Ram ProMaster.The Stellantis Production Way (SPW) is a set of manufacturing-related tools and principles intended to achieve best in class performance as measured by health and safety, quality, throughput, cost and environmental metrics, through empowerment of employees, enhancement of employee skill-sets, the sharing of best practices and the improved and economical use of production assets. Following the 2022 launch of SPW, Stellant focuses on implementation and execution in 2023, as SPW tools, principles and priorities were deployed throughout each of its manufacturing plants.

Technology Initiatives

Modular Vehicle Platforms

In July 2023, Stellantis unveiled its STLA Medium platform, which has a best-in-class range of more than 700 kilometers. Production of the STLA Medium will begin in Europe in early 2024. STLA Medium is designed to host compact to mid-size cars and UVs, and is one of the four platforms comprising Stellantis' BEV-centric platform strategy, along with STLA Small (ultra-compact cars), STLA Large (mid-size to full-size vehicles) and STLA Frame (full-size SUV and pickup trucks). Each platform is designed to share electrified components, to be capable of adapting over time to evolutions in technology and to have a high level of flexibility (length and width).The all-new, all-electric 2025 Ram 1500 REV will be built on STLA Frame and was introduced at the New York International Auto Show in April 2023. Deliveries of the 2025 Ram 1500 REV are expected to begin in the fourth quarter of 2024. The all-new 2025 Ram 1500 Ramcharger, a range-extended electric truck announced in November 2023, will also be built on the STLA Frame platform. Deliveries of the 2025 Ram 1500 Ramcharger are expected to begin in mid-2025.

Full-Electric Propulsion Systems

In February 2023, Stellantis announced investment in three plants in Kokomo, Indiana, U.S. to produce new electric drive modules (EDMs) that will help power future electric vehicles assembled in North America. Stellantis' electric propulsion system strategy includes three families of EDMs that combine the motor, gearbox and inverter, each designed to meet different performance needs. The EDMs can be configured for front-wheel drive, rear-wheel drive and all-wheel drive. A program of hardware upgrades and OTA software updates is expected to extend the life cycle of the propulsion systems and, therefore, the vehicles. Stellantis intends to internally develop software and controls in order to maintain characteristics unique to each brand.

Battery Technology and Production

In September 2023, Stellantis announced the opening of its first battery technology center in Italy. The facility, located at Stellantis' Mirafiori complex in Turin will enable the in-house testing and development of battery packs and related software.

In October 2023, Stellantis and StarPlus Energy joint venture partner Samsung SDI announced plans to locate a second battery manufacturing facility in Kokomo, Indiana, U.S. with production expected to begin in 2027. The first StarPlus Energy gigafactory, also in Kokomo, Indiana, is expected to begin operations in the first quarter of 2025 and the two facilities have a planned aggregate battery production of approximately 67 gigawatt hours (GWh) per year. In addition, production at the Windsor, Ontario (Canada) gigafactory owned by NextStar Energy, a Stellantis and LG Energy Solution joint venture, is expected to begin operations in 2024 and will have a battery production in excess of 45 GWh per year.

Automotive Cell Company (ACC), a Stellantis joint venture with Total/Saft and Mercedes-Benz AG, started preliminary production at its Billy-Berclau Douvrin (France) gigafactory in December 2023. ACC has also committed to gigafactories located in Kaiserslautern, Germany and Termoli, Italy.

In accordance with its Dare Forward 2030 long-term strategic plan, Stellantis is targeting to achieve 400GWh of battery capacity by 2030.

HydrogenIn

July 2023, Stellantis announced that it had acquired a 33.3 percent ownership position in Symbio, a leader in zero-emission hydrogen mobility. Symbio's Saint-Fons, France gigafactory began production in 2023 and is expected to produce 50,000 hydrogen fuel cells per year by 2026. Forvia and Michelin are also each 33.3 percent shareholders in Symbio.

Connectivity

In January 2023, Stellantis announced the establishment of Mobilisights, a business unit dedicated to executing the Company's DaaS strategy globally by serving as the gateway to telematic data from the Company's connected vehicles. Stellantis targets to have an estimated 34 million connected vehicles on the road globally by 2030.

Semiconductors

In June 2023, Stellantis and Hon Hai Technology Group (Foxconn) announced the creation of SiliconAuto, a 50/50 joint venture dedicated to designing and selling a family of state-of-the-art semiconductors to supply the automotive industry, including Stellantis, beginning in 2026. SilconAuto is expected to support Stellantis' future semiconductor needs, including with regard to STLA Brain, a service-oriented electronic and software architecture with full OTA updating capabilities

Supply of Raw Materials, Parts and Components

In 2023, Stellantis signed agreements with Controlled Thermal Resources Holdings Inc (CTR) and Argentina Lithium for lithium, with Terrafame for nickel, with Alliance Nickel Ltd and Kuniko Ltd for cobalt and nickel, with Element 25 Limited for manganese and with McEwen Copper for copper.

Sales Overview

New vehicle sales represent sales of vehicles primarily by dealers and distributors, or, directly by the company in some cases, to retail and fleet customers. Sales include mass-market, premium and luxury vehicles manufactured at the company's plants, as well as vehicles manufactured by joint ventures and third party contract manufacturers and distributed under the company's brands. Sales figures exclude sales of vehicles that the company contracts manufacture for other OEMs.

The company's vehicle line-up in the North America segment primarily leveraged the brand recognition of the Jeep, Ram, Dodge and Chrysler brands to offer UVs, pickup trucks, cars and minivans under those brands. Vehicle sales and profitability in the North America segment were generally weighted towards larger vehicles, such as UVs, trucks and vans, consistent with overall industry sales trends in the North America segment, which have become increasingly weighted towards UVs and trucks in recent years.

North America Distribution

In the North America segment, the company's vehicles are sold primarily to dealers in its dealer network for sale to retail consumers and to fleet customers. Fleet sales in the commercial channel are typically more profitable than sales in the government and daily rental channels since they more often involve customized vehicles with more optional features and accessories; however, vehicle orders in the commercial channel are usually smaller in size than the orders made in the daily rental channel.

North America Dealer and Customer Financing

In November 2021, Stellantis acquired First Investors Financial Services Group, known as Stellantis Financial Services US Corp (Stellantis Financial Services U.S.). Stellantis Financial Services U.S. provides U.S. customers and dealers with a complete range of financing options, including retail loans, leases, and floorplan financing. However, while Stellantis Financial Services U.S. grows, Stellantis also utilizes independent financial service providers, including Santander Consumer USA Inc. (SCUSA) to complement its financing offer to dealers and retail customers in the U.S. In February 2013, FCA entered into a private label financing agreement with SCUSA (the SCUSA Agreement), under which SCUSA will continue to provide a wide range of wholesale and retail financial services to dealers and retail customers in the U.S., under the Chrysler Capital brand name. In April 2022, the SCUSA Agreement was amended and extended through 2025, allowing SCUSA to serve a complementary role to Stellantis Financial Services U.S. Under the SCUSA Agreement, SCUSA has certain rights, including limited exclusivity to participate in specified minimum percentages of certain retail financing subvention programs.

As of December 31, 2023, of the current approximately 2,600 Stellantis dealers in the U.S., Stellantis Financial Service U.S. provided wholesale lines of credit, starting in April 2023, to approximately 3 percent, SCUSA to approximately 9 percent of the dealers while Ally provided 29 percent. In 2023, approximately 76.7 percent of the retail vehicles sold to U.S. retail customers were financed or leased. Of those financed or leased retail sales, SCUSA, Ally, and Stellantis Financial Services U.S. (second full year of operations) market share represented 23.0 percent, 12.9 percent, and 11.3 percent respectively.

In Canada, the company's customers are served by cooperation agreements with main local banks providing retail financing and leasing.

In Mexico, the company has a private label agreement with Banco Inbursa Group in order to provide dealer and retail customer financing programs for all brands following the acquisition by the latter of the entire share capital of Banque PSA Finance (BPF) Finance Mexico S.A. de C.V., SOFOM completed in December 2022.Enlarged Europe.

Enlarged Europe Competition

The company's competitors in Enlarged Europe include Volkswagen; Renault; Hyundai/Kia; Toyota; Mercedes-Benz; BMW; and Ford.

Enlarged Europe Distribution

In Europe, the company sells and services its vehicles through its own dealers (located in most European markets), independent dealers, retailers and authorized workshops. In other markets and in segments in which it does not have a substantial presence, the company has agreements with general distributors. During 2021, Stellantis engaged in a transformation process by terminating its distribution contracts and at the same time consulting its networks on the future distribution model. This process was undertaken in anticipation of implementing new distribution schemes starting July 2023. Stellantis' vision is to promote a sustainable distribution model and all involved stakeholders will benefit from these changes with the customer experience at the core.

In 2023, Stellantis and its European dealers have signed over 8,000 sales and 25,000 aftersales contracts in ten key European countries, their shared objectives include simplification, a multi-brand approach, customer-centricity, and quality assurance. Stellantis initially adopted the new retailer model in Austria, Belgium, Luxembourg and the Netherlands in September 2023, and has been swiftly working to further enhance the model in these early adopter countries, allowing its network sufficient time to adapt in a competitive landscape with new entrants. Enlarged Europe Dealer and Customer Financing

Middle East & Africa Competition

The company's competitors in Middle East & Africa include Toyota; Hyundai/Kia; Renault; Volkswagen; Ford; BMW; and Mercedes-Benz.

Middle East & Africa Distribution

In Turkey, Peugeot, Citroën, DS and Opel brands are distributed through a national sales company, consolidating operations for these four brands, whereas Fiat, Alfa Romeo and Jeep brands are distributed by a joint venture with Koc Automotiv Group, Tofas.

In Morocco, a national sales company is in charge of distributing Fiat, Alfa Romeo, and Jeep, while Peugeot, Citroën, DS and Opel Brands are managed by local importers. In South Africa the company also operates through a national sales company that distributes Peugeot, Citroën, Opel, Fiat, Jeep and Alfa Romeo. In Algeria, a national sales company is in charge of distributing Fiat, while Opel is managed by local importer. In all other markets of the region, the company distributes through agreements with local general distributors, with the regional offices of Stellantis located in Cairo, Egypt and Dubai coordinating operations in Egypt and Middle East.

Middle East and Africa Dealer and Customer Financing

In Turkey, the company's activities related to the former FCA brands are carried out through a 100 percent owned subsidiary of its joint venture, Tofas, that provides financial services and insurance products mainly to retail customers, while the activities related to the PSA brands are carried out by a subsidiary of Stellantis Financial Services Europe, which markets a range of retail financing and insurance products in cooperation with a TEB Finansman AS, a subsidiary BNPP PF, with Garanti Bank, a subsidiary of BBVA and, from June 2023, with Yapi Kredi.

Cooperation agreements are also in place with third-party financial institutions to provide dealer network and retail customer financing in South Africa, Morocco and Algeria.

South America Competition

The company's competitors in South America include Volkswagen; GM; and Ford.

South America Dealer and Customer Financing

In the South America segment, the company provides access to dealer and retail customer financing, as well as rental products through captive finance companies and through strategic relationships with financial institutions.

In Argentina, the company has a 100 percent owned captive finance company that offers dealer and retail customer financing, as well as rental services for the former FCA brands (FCA Compañia Financiera S.A.) and a 50 percent owned joint venture that offer dealer and retail customer financing as for the former PSA brands (PSA Finance Argentina Compañia Financiera S.A., with Banco Bilbao Vizcaya Argentaria S.A. owning the other 50 percent).

In Brazil, the company has two 100 percent owned captive finance companies that offer dealer and retail customer financing as well as rental services as for the former FCA brands, namely Banco Stellantis S.A. and FCA Rental Locadora de Automoveis Ltda (commercially known as Flua). In August 2023, Stellantis Financial Services Europe purchased the 50 percent shares held by Banco Santander Brasil S.A. in Banco PSA Finance Brasil S.A. (and also the 50 percent shares held by Banco Santander Brasil S.A. in Stellantis Corretora de Seguros e Servicos Ltda., a company providing insurance services), with the objective of ultimately carrying out retail customer financing activities for all Stellantis brands in Brazil and starting with the integration as from second half of 2023 of the activities related to the Jeep and Ram branded vehicles.

The company has entered into a commercial partnership (private label financing agreement) with Banco Santander Brasil S.A. in August 2023, under which Banco Santander Brasil S.A. will provide financing to retail customers purchasing Fiat branded vehicles in Brazil. The partnership agreement expires in August 2025.

China and India & Asia Pacific

The company sells a range of vehicles in the China and India & Asia Pacific segment, including small and compact cars, premium mid-size cars, utility vehicles and light commercial vehicles. Although, the company's smallest segment by vehicle sales, China and India & Asia Pacific segment represents a significant growth opportunity and it invested in building relationships with key partners in India to increase its manufacturing footprint and presence in the region. In addition, a joint venture, called Leapmotor International, will be created in 2024 with ownership by Stellantis of 51 percent and by Leapmotor of 49 percent. Stellantis controls the joint venture and will consolidate the entity. The joint venture will have exclusive rights for export and sale, as well as manufacturing of Leapmotor products outside of Greater China. The joint venture expects to begin shipments in the second half of 2024. In the China and India & Asia Pacific segment the company also distributes vehicles that are manufactured in the U.S. and Europe through its dealers and distributors.

China and India & Asia Pacific Distribution

In the key markets in the China and India & Asia Pacific segment (China, Australia, India, Japan, South Korea and AGD), Stellantis vehicles are sold by the company's 100 percent owned subsidiaries or through DPCA to local independent dealers. The Dongfeng Peugeot Citroën Automobile Sales Co (DPCS) markets the vehicles produced by DPCA under various license agreements in China, and a Stellantis fully-owned national sales company in China operates and manages the import vehicles' sales in China (except Maserati). The company also operates through national sales companies in Australia, Japan, India and South Korea. In AGD and smaller markets, it has agreements with general distributors.

China and India & Asia Pacific Dealer and Customer Financing

In China, the company operates a 100 percent owned finance and lease companies, Stellantis Automotive Finance Co., Ltd and, since April 2023, following the finalization of an equity transfer agreement with Dongfeng, Stellantis Leasing Services Co Ltd. These entities allow the company to support its sales activities in China offering to its dealer networks and retail and commercial customers, a full range of wholesale and retail financing, as well as financial and operational leasing products. Cooperation agreements are also in place with third-party financial institutions to provide dealer network and retail customer financing in India, South Korea, Australia and Japan.

Maserati

In 2023, Maserati launched the all-new GranTurismo, which is available in three versions (Modena, Trofeo and the fully electric Folgore). Additionally, Maserati revealed the Grecale Folgore, the brand's first fully electric SUV, the track-only hypercar MCXtrema (62 units globally) and the GT2 (track-only race car, approved for the GT2 European championship).

In Europe, depending on the country, access to dealer and customer financing for Maserati vehicles are either through joint ventures with BNPP PF or with SCF.

In China, the company's 100 percent owned captive finance companies, Stellantis Automotive Finance Co. Ltd and Stellantis Leasing Services Co Ltd. provide dealer and retail financing and financial and operational leasing products. In the U.S., JPMorgan Chase Bank provides retail financing. In other regions, the company relies on local agreements with financial services providers for the financing of Maserati brand vehicles to dealers and end customers.

History

Stellantis N.V. was founded in 1899. The company was incorporated as a public limited liability company (naamloze vennootschap) under the laws of the Netherlands in 2014.