ByAFP
December 10, 2024
China's CATL is a major vehicle battery maker - Copyright AFP/File Hector RETAMAL
Valentin Bontemps with Frederique Pris in Paris
Car giant Stellantis and Chinese manufacturer CATL said Tuesday they would build a $4.3-billion factory to make electric vehicle batteries in Spain, the latest bid to boost Europe’s troubled EV drive.
They said they aim to start production by the end of 2026 at the site in the northern city of Zaragoza.
It “could reach up to 50 GWh capacity, subject to the evolution of the electrical market in Europe and continued support from authorities in Spain and the European Union”, the companies said in a statement.
The two firms signed an agreement in 2023 to produce battery parts for the manufacture of electric vehicles in Europe.
CATL, which has received robust financial support from Beijing, has launched two other European factories, in Germany and Hungary.
Its chief executive Robin Zeng met late on Monday with Spain’s Prime Minister Pedro Sanchez, ahead of the announcement of the 4.1-billion-euro deal.
In a message on X, the Socialist premier thanked the presidents of the two firms for their “firm commitment” to Spain, adding he was “very pleased”.
During a visit to China in September, Sanchez urged the European Union to “reconsider” a plan to impose tariffs on Chinese electric cars, calling for a “compromise” between the economic powerhouses.
Spanish Economy Minister Carlos Cuerpo called the announcement “excellent news for industry and employment in our country”.
Spain has been playing a growing role in European vehicle production, assembling 1.87 million cars in 2023 — the second-biggest producer in the continent after Germany, according to the European Automobile Manufacturers’ Association.
– Bumpy patch for carmakers –
The announcement comes at a turbulent time in the car industry as countries seek to switch to low-carbon electric vehicles to curb the climate crisis.
Sweden’s financially strained electric car battery maker Northvolt last month announced the resignation of its chief executive Peter Carlsson.
That came hours after the company sought bankruptcy protection in the United States.
The company said in September it was slashing 1,600 jobs — a quarter of its staff — and suspending the expansion of its site as it struggled with strained finances and a slowdown in demand.
The company had been seen as a cornerstone of European attempts to catch up with China and the United States in the production of battery cells, a crucial component of lower-emission cars.
Stellantis’s former chief executive Carlos Tavares also resigned on December 1, with the company signalling differences over how to save the group’s slumping profits.
Like other auto groups, Stellantis has blamed competition from China and the difficult transition to electric cars for much of its troubles.
It announced on November 26 that it was closing a factory at Luton in England with the loss of 1,100 jobs.
– ‘High-quality’ EVs –
Founded in 2011 in Ningde, eastern China, CATL produces more than a third of the electric vehicle batteries sold in the world.
Italian-US-French company Stellantis produces 14 brands including Fiat, Peugeot-Citroen, Opel, Maserati, Chrysler, Ram and Jeep.
The Zaragoza plant will make lithium iron phosphate (LFP) batteries, which are cheaper to produce but less powerful compared with nickel manganese cobalt (NMC) ones, the other current mainstream technology.
The companies said the factory, which will be designed to be completely carbon neutral, would enable Stellantis “to offer more high-quality, durable and affordable battery-electric passenger cars, crossovers and SUVs”.
Stellantis chairman John Elkann said in the statement that the venture “will bring innovative battery production to a manufacturing site that is already a leader in clean and renewable energy”.
Zeng said CATL’s goal was “to make zero-carbon technology accessible across the globe”.
The deal is expected to be closed in 2025, subject to regulation.
Stellantis CEO Resignation Sends Shockwaves Through U.S. Auto Industry
The resignation of Stellantis CEO Carlos Tavares has created uncertainty in the US automotive market.
Tavares' departure could lead to a shift in Stellantis' strategic priorities, impacting dealer relationships, vehicle sales, and steel demand.
The new CEO's approach will be crucial in determining the company's future direction and its impact on the US automotive landscape.
The Automotive MMI (Monthly Metals Index) remained sideways, only moving down 2.58%. There are currently no significant factors within the US automotive market causing much movement in price action, and automotive sector as a whole remains slow. Despite this, concern about incoming tariffs from the new Trump administration remains palpable. While Trump hasn’t threatened tariffs on large automotive manufacturing nations like Japan or Germany, any hot-dipped galvanized steel products coming out of China will be subject to Trump’s proposed tariffs. This could create more market volatility and place pressure on the automotive industry in the long term.
Another noteworthy trend in the US automotive market is a steady increase in imports to the U.S from Vietnam. In recent years, steel imports have been flowing into Vietnam from China, raising suspicions as to whether China is again looking for a country in which to dump steel products. However, this hasn’t caused any major fluctuations in hot-dipped galvanized prices or the US automotive market just yet. Currently, all eyes remain on the new Trump Administration to see what will happen with the proposed tariffs.
Impact on the U.S. Automotive Market
As the parent company of Jeep, Ram and Chrysler, Stellantis holds a key position in the US automotive industry. Therefore, Tavares’ resignation brings a wave of uncertainty that could impact market dynamics. His strict cost-cutting policies had created tension with U.S. dealers, causing dissatisfaction. However, his departure represents an opportunity to rebuild dealer relationships and adopt strategies that better align with their interests.
Stellantis experienced a 17% drop in US sales this year alone. The impact of leadership changes will depend on the new CEO’s approach, which could either stabilize or further unsettle sales. Under Tavares, the company prioritized high-end vehicles. However, the firm’s focus could shift to more affordable models, influencing competition and consumer preferences in the US market.
Potential Effects on Hot-Dipped Galvanized Steel Prices
The automotive industry relies heavily on hot-dipped galvanized (HDG) steel for vehicle manufacturing. As a result, changes in leadership at an American automotive manufacturer as large as Stellantis could impact both demand and pricing. Moreover, leadership transitions might alter production levels, with higher vehicle output potentially boosting HDG steel demand and driving up prices.
Stellantis’ procurement strategies also play a key role in shaping the steel supply chain. A new CEO could redefine supplier relationships, affecting demand and pricing for HDG steel. Of course, the overall sense of uncertainty surrounding Stellantis’ direction may also impact market sentiment, causing price fluctuations as stakeholders anticipate potential shifts in demand.
Moving Forward
Carlos Tavares’ resignation marks a pivotal moment for American automotive manufacturing, with significant implications for both the US automotive market and the industrial metals sector.
The company’s strategic direction under its new leadership will be crucial in determining its market position and influence on HDG steel demand. Stakeholders should closely monitor developments within Stellantis to assess potential impacts on market dynamics and pricing structures.
By Jennifer Kary
By Metal Miner - Dec 06, 2024
The resignation of Stellantis CEO Carlos Tavares has created uncertainty in the US automotive market.
Tavares' departure could lead to a shift in Stellantis' strategic priorities, impacting dealer relationships, vehicle sales, and steel demand.
The new CEO's approach will be crucial in determining the company's future direction and its impact on the US automotive landscape.
The Automotive MMI (Monthly Metals Index) remained sideways, only moving down 2.58%. There are currently no significant factors within the US automotive market causing much movement in price action, and automotive sector as a whole remains slow. Despite this, concern about incoming tariffs from the new Trump administration remains palpable. While Trump hasn’t threatened tariffs on large automotive manufacturing nations like Japan or Germany, any hot-dipped galvanized steel products coming out of China will be subject to Trump’s proposed tariffs. This could create more market volatility and place pressure on the automotive industry in the long term.
Another noteworthy trend in the US automotive market is a steady increase in imports to the U.S from Vietnam. In recent years, steel imports have been flowing into Vietnam from China, raising suspicions as to whether China is again looking for a country in which to dump steel products. However, this hasn’t caused any major fluctuations in hot-dipped galvanized prices or the US automotive market just yet. Currently, all eyes remain on the new Trump Administration to see what will happen with the proposed tariffs.
Stellantis CEO Carlos Tavares Resigns. What Next?
The resignation of Stellantis CEO Carlos Tavares on December 1 sent shockwaves through the automotive industry, particularly impacting the US market and the steel sector. Tavares’ departure, which was attributed to disagreements over operational strategies and stakeholder relations, raises questions about the future direction of Stellantis and its broader impact on the US automotive market.
Tavares’ exit was driven by deep disagreements with Stellantis’ board over the company’s strategic priorities. According to reports, his push for aggressive cost-cutting and ambitious sales targets sparked friction with dealers, suppliers, and unions.
Critics contended that his approach favored short-term profits at the expense of long-term stability, thus undermining product quality and innovation. During his tenure, Stellantis faced a 20% drop in sales and a €12 billion decline in revenue, which raised alarms about the company’s financial outlook.
The resignation of Stellantis CEO Carlos Tavares on December 1 sent shockwaves through the automotive industry, particularly impacting the US market and the steel sector. Tavares’ departure, which was attributed to disagreements over operational strategies and stakeholder relations, raises questions about the future direction of Stellantis and its broader impact on the US automotive market.
Tavares’ exit was driven by deep disagreements with Stellantis’ board over the company’s strategic priorities. According to reports, his push for aggressive cost-cutting and ambitious sales targets sparked friction with dealers, suppliers, and unions.
Critics contended that his approach favored short-term profits at the expense of long-term stability, thus undermining product quality and innovation. During his tenure, Stellantis faced a 20% drop in sales and a €12 billion decline in revenue, which raised alarms about the company’s financial outlook.
Impact on the U.S. Automotive Market
As the parent company of Jeep, Ram and Chrysler, Stellantis holds a key position in the US automotive industry. Therefore, Tavares’ resignation brings a wave of uncertainty that could impact market dynamics. His strict cost-cutting policies had created tension with U.S. dealers, causing dissatisfaction. However, his departure represents an opportunity to rebuild dealer relationships and adopt strategies that better align with their interests.
Stellantis experienced a 17% drop in US sales this year alone. The impact of leadership changes will depend on the new CEO’s approach, which could either stabilize or further unsettle sales. Under Tavares, the company prioritized high-end vehicles. However, the firm’s focus could shift to more affordable models, influencing competition and consumer preferences in the US market.
Potential Effects on Hot-Dipped Galvanized Steel Prices
The automotive industry relies heavily on hot-dipped galvanized (HDG) steel for vehicle manufacturing. As a result, changes in leadership at an American automotive manufacturer as large as Stellantis could impact both demand and pricing. Moreover, leadership transitions might alter production levels, with higher vehicle output potentially boosting HDG steel demand and driving up prices.
Stellantis’ procurement strategies also play a key role in shaping the steel supply chain. A new CEO could redefine supplier relationships, affecting demand and pricing for HDG steel. Of course, the overall sense of uncertainty surrounding Stellantis’ direction may also impact market sentiment, causing price fluctuations as stakeholders anticipate potential shifts in demand.
Moving Forward
Carlos Tavares’ resignation marks a pivotal moment for American automotive manufacturing, with significant implications for both the US automotive market and the industrial metals sector.
The company’s strategic direction under its new leadership will be crucial in determining its market position and influence on HDG steel demand. Stakeholders should closely monitor developments within Stellantis to assess potential impacts on market dynamics and pricing structures.
By Jennifer Kary
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