Stellantis joins forces with Aramco in eFuels low-carbon synthetic fuels – 09/05/2023 at 18:08


(AOF) – Stellantis and Aramco announce that 24 families of European vehicle engines produced by the company since 2014 (Euro 6) are compatible with the expected eFuel formulas. As part of their search for energy solutions with a lower carbon footprint, the two companies have jointly tested alternative eFuels, in accordance with existing standards. Aramco is currently investigating the development of low carbon synthetic fuels as a ‘turnkey’ solution to potentially reduce carbon dioxide emissions.

Stellantis supports the use of low-carbon eFuels and estimates that it could reduce CO2 emissions in Europe by up to 400 million tonnes from 2025 to 2050, if used on all 28 million Stellantis vehicles. .

This partnership is announced at the end of several months of tests in the technical centers of Stellantis, after the manufacturer came to the conclusion that 24 of the families of engines which equip its European vehicles sold since 2014, i.e. 28 million vehicles in circulation, are able to use a synthetic fuel “drop-in” (turnkey) without any modification of the powertrain.

Low-carbon eFuel is a synthetic fuel produced by reaction between CO2, taken directly from the atmosphere or from an industrial site, and renewable hydrogen. Using low-carbon synthetic fuel could potentially reduce carbon dioxide emissions from existing internal combustion vehicles by at least 70% over their entire life cycle, compared to traditional 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;



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;



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. .



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