(AOF) – Stellantis and Controlled Thermal Resources Holdings Inc. (CTR) announce an investment of more than $100 million by Stellantis for the development of CTR’s Hell’s Kitchen project, the largest geothermal lithium project in the world, with a total resource production capacity of 300,000 tons per year in lithium carbonate equivalent. The lithium produced at Hell’s Kitchen will enable Stellantis electric vehicles to be eligible for US Inflation Reduction Act (IRA) consumer incentives.
In addition, the two companies have extended the initial supply contract, which now provides for the production by CTR of 65,000 tons of lithium hydroxide monohydrate (LHM) per year for the manufacture of batteries, during the 10 years of the agreement.
This new agreement incorporates the original lithium supply agreement signed by the two companies in June 2022, for the supply of 25,000 tonnes of LHM per year.
CTR’s Hell’s Kitchen project in Imperial County, California will use geothermal brine to produce “green” lithium for batteries from renewable energy and steam in an integrated, closed-loop process. It thus avoids having to resort to brine ponds, surface mines or fossil fuels.
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Key points
– Sixth largest automotive group in the world – 3rd in the United States with 11% market share and 2nd in Europe with 18%, born in January 2021 from the Peugeot-Fiat Chrysler Group merger;
– Turnover of €179.6 billion achieved under 14 brands – Alfa Romeo, Chrysler Citroën, DS, Jeep, Opel, Peugeot, etc. -, mainly in North and South America and in Europe;
– Business model adapting the group to the new uses of motorists and to the electrification of vehicles (world positions in electric vehicles) via digital transformation, the internal culture of performance (high industrial competitiveness) and social responsibility;
– Capital with 4 main shareholders: the holding company of the Agnelli Exor family for 14.4%, the Peugeot family for 7.2%, the Chinese Dongfeng for 5.6% and BPI France for 5.66%, John Elkann chairing the board of directors of 11 members and Carlos Tavares being managing director;
– Sound financial position: €61.3 billion in available industrial liquidity and €61.3 billion in equity, against a debt of €34 billion.
Challenges
“Dare forward 2030” strategic plan:
– maintenance of a balance point at less than 50% of invoicing and operating margins of more than 2 digits,
– doubling of revenues including a quadrupling in the high end, ¼ achieved outside Europe and North America (€20 billion in China) and 1/3 from online sales,
– software strategy of 20 billion in turnover and approximately 40% gross margin;
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Innovation strategy based on 4 pillars:
– electrification: 100% electric vehicles (BEV) sold in Europe and 50% in the United States in 2030
– hydrogen fuel cells: increase in battery capacity to 400 GWh,
– smart vehicles: more than 30 billion euros by 2025 in software and electrification, with deployment from 2024 of 3 platforms powered by artificial intelligence on the 4 future vehicle platforms,
– autonomous driving: participation in European L3 Pilot and Hi_Drive projects,
– organized in a collaborative ecosystem, with more than 160 co-financed projects and more than 1,000 partners, academies in digital & data and electricity, 8 dedicated hubs and a venture capital fund of €300 million for cutting-edge technologies ;
– Environmental strategy of carbon neutrality in 2038 via a 50% reduction in 2030 vs 2021:
– new circular economy division targeting €2 billion in revenue by 2030,
– specialized investments – “sustainable” Los Azules copper mine in Argentina, geothermal energy for the German sites, etc.,
– Integration of the Share now specialist -5 million customers worldwide;
– Securing the battery ecosystem: 5 giga-companies in Europe and the United States and vertical integration of raw materials.
Challenges
– Confirmation of the resumption of semiconductor supplies;
– Spin-off from the strategic partnership with Archer in the production of electric vertical take-off and landing (eVTOL) aircraft;
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Advances in financing activities in the United States and Europe, with strong profitability, and continued strong growth in global sales of electric vehicles, bolstered by 9 launches in 2023;
– After a 14% increase in revenues on 1
er
quarter, confirmation of the 2022 objective of a double-digit operating margin and positive free cash flow.
– 2022 dividend of €1.34 and buyback of shares for €1.5 billion. .
A paradoxical performance
Data from EY highlights that the performance of the world’s top 16 manufacturers was particularly strong in 2021. While the average margin has fallen for three years in a row, from 6.3% in 2017 to just 3.5% in 2020 , this margin stood at 8.5% in 2021. This level is a record for ten years. However, the context was particularly hectic for manufacturers, faced with unprecedented shortages of components. Global sales fell 14% in 2020, the year of the health crisis, to rebound by only 5% in 2021. However, last year, players were able to reap the benefits of their efforts on their fixed cost structure. .