Another European car company is embracing lithium iron phosphate batteries

Following Volkswagen's announcement of the adoption of lithium iron phosphate batteries, another European OEM is also preparing to use lithium iron phosphate batteries. Stellantis plans to launch electric vehicles in Europe using lower-cost lithium iron phosphate (LFP) batteries, foreign media reported.

Stellantis Group, formed by the 50:50 merger of PSA Group and FCA Group, is now the world's fourth largest automotive group with manufacturing operations in more than 30 countries, 400,000 employees and services and products for more than 130 countries and regions around the world. Stellantis Group owns a number of automobile brands, such as Alfa Romeo, DS, Citroen, Chrysler, Jeep, and so on.

As such a large group, its revenue capacity is also very strong. According to the financial results, Stellantis Group's net revenue reached 179.6 billion euros in 2022, with a net profit of 16.8 billion euros and an adjusted operating profit margin of 13%, which is an excellent performance.

However, the performance of Stellantis' joint-venture brands in the Chinese market is unsatisfactory and the state is very sluggish. Stellantis was nicknamed the "loser league" by Chinese netizens.

In recent years, Stellantis Group's Chinese joint ventures, including Beijing Jeep, Nanjing Fiat, Guangzhou Automobile Jeep, Changan DS, etc., have either maintained dismal operations or had to be delisted. Today, with the bankruptcy of GaC Fique, Stellantis has only one remaining joint venture brand in the Chinese market, Shenlong Automobile. The decline of gas-powered cars presages Stellantis' desire to roll up the earth in electric cars.

In July 2021, Stellantis published its electric vehicle development blueprint, making full efforts to promote the construction of electric vehicle product line. In March 2022, Stellantis Group released the "Dare Forward 2030" strategic plan, which continues to plan the electric transformation plan of the group in the next decade, and expects that all the vehicles sold by the Group in Europe will be pure electric models by the end of 2030.

Now, as Stellantis prepares to launch electric cars with lithium iron phosphate batteries, Tang has found a way to reduce the cost of producing electric cars -- by replacing  ternary lithium batteries with lithium iron phosphate batteries. It is understood that most major European car manufacturers are using ternary lithium batteries, and mainly Korean batteries.

According to Trend Force, starting from 2024, the global market share of lithium iron phosphate batteries will exceed that of ternary lithium batteries, accounting for 60% of the installed capacity. As we know, the current lithium iron phosphate batteries are mainly produced by Chinese companies. So which lithium iron phosphate battery will Stellantis use? At present, only Ningde Times has a battery factory in Germany, but the type of production is unknown, if there is a customer need, production is not a problem.

However, Stellantis' 10-year plan does not mention the strategic planning and layout of electrification in the Chinese market. Even CEO Tang's "asset-light" statement was once questioned by the outside world. In addition, Stellantis' poor performance in the Chinese market in recent years has led to the withdrawal of many joint venture brands from the market, leading to the shelving of Opel's previously discussed plan to enter China. Many people suspect that Stellantis will eventually withdraw from the Chinese market completely.

However, no matter what the future development trend of Stellantis in China is, its electric transformation must be carried out to the end. The market share of lithium iron phosphate batteries has been increasing, and Stellantis' demand for lithium iron phosphate batteries has been published. It remains to be seen whether Stellantis' transformation will be smooth and whether the future of its Chinese joint ventures remains bright.