Question-and-Answer SessionBut maybe we could start with North America, no surprise, probably. We've seen some positive signs, improving share, stable pricing post 2024 adjustments. How sustainable are the trends that you're seeing currently in the North American market?Antonio FilosaCEO, COO of North America American brands & Executive Director Very well. Well, I believe that is very sustainable. I believe that because I have already some proof points of what I'm seeing. And I see all the conditions in the ...

Core Viewpoint - Stellantis is shifting its focus towards hybrid production in the U.S. market, moving away from the previous emphasis on fully-electric models [1] Group 1 - The new CEO, Antonio Filosa, is leading this strategic change in production focus [1]

Summary of Conference Call Company and Industry - **Company**: Stellantis - **Industry**: Automotive Key Points and Arguments North American Market Performance - Stellantis has seen positive trends in the North American market, with market share increasing from 7% in the first half to approximately 8% in the third quarter, attributed to new product launches and strong market acceptance [1][2] - The return of the Ram Hemi V8 engine has been particularly successful, with 10,000 orders on the first day of announcement, growing to 50,000 orders within six weeks [2] - The Jeep Cherokee, a significant model in the midsize SUV segment, is being relaunched with improvements, including hybrid technology for better fuel economy [3][4] Product Launches and Strategy - Stellantis is focusing on a sequence of product launches, including the Jeep Cherokee and Dodge Charger, which are expected to drive volume growth sustainably [4][11] - The company is improving execution on product launches, with a commitment to timely releases [11] - A shift in strategy has been noted, particularly regarding battery electric vehicle (BEV) penetration expectations, which have been revised down from 50% to around 6-7% in the U.S. by 2030 [8][9] Regulatory Environment and Market Dynamics - The regulatory landscape in the U.S. and Europe is evolving, with Stellantis advocating for a balanced approach to CO2 emissions regulations that considers environmental protection, job preservation, and market affordability [12][13] - The company is preparing for upcoming EU regulations and is optimistic about the potential for a milder energy transition [16] Financial Outlook and Profitability - Stellantis is cautious about profitability expectations for the second half of the year, with a focus on closing the year before making definitive statements [5][7] - The company aims to improve cash generation and business KPIs gradually, acknowledging a negative cash flow of EUR 6.6 billion last year [28][29] Competitive Landscape and Future Plans - Stellantis recognizes the competitive threat from Chinese automakers, particularly in South America and the Middle East, and plans to leverage localization strategies to maintain its market position [50][52] - The company is optimistic about its product expansion in North America, particularly for the RAM brand, which is expected to introduce new models and capitalize on existing brand equity [23][44] Market Share Recovery in Europe - Stellantis has lost market share in Europe over the past five years and is implementing strategies to recover, including launching new models and leveraging partnerships like Leapmotor [37][40] - The company is focusing on segments where it has historical strength, such as the A and B segments, and is ramping up production of competitive models [38][41] Other Important Insights - The company is committed to improving its dealer inventory management and product launch rigor, which are critical for maintaining momentum [22] - Stellantis is exploring opportunities in hybrid technology, with a belief that hybrids will be a favored powertrain in the U.S. market [35] - The company is also assessing its brand portfolio and the potential need for streamlining based on each brand's unique strengths and market opportunities [43][44]

Core Viewpoint - The article emphasizes the importance of understanding market dynamics beyond traditional metrics like P/E ratios, focusing on demand and supply as the true drivers of stock prices [1] Group 1: Investment Strategy - The investment strategy is split between low-cost funds and individual stocks, with a balanced portfolio of approximately 50% in each [1] - The approach to investing is long-term, with a minimum holding period of 10 years for stocks [1] Group 2: Market Understanding - The market is described as forward-looking, but many investors fail to grasp the implications of this perspective [1] - The focus is on predicting human behavior and understanding market sentiment, which are crucial for making informed investment decisions [1] Group 3: Analytical Approach - The analysis goes beyond numerical data, requiring an understanding of sectors, industries, and long-term growth trends [1] - The approach to investment analysis is characterized by ingenuity, curiosity, and a willingness to go against prevailing trends [1]

Core Insights - Michelin, Forvia, and Stellantis have reached an agreement on a restructuring and refinancing package for their hydrogen fuel cell joint venture, Symbio, amid uncertainty regarding its future [1][2] - Stellantis previously accounted for approximately 80% of Symbio's business volumes, making the joint venture vulnerable after Stellantis halted its hydrogen fuel cell technology program [2] - Symbio plans to reduce its workforce to 175 as part of the restructuring, which management describes as essential for the company's survival [2][3] Business Strategy - Symbio aims to adapt its strategy and organization to align with its new scope of activities following the restructuring [2] - The company will continue to develop its core hydrogen technologies, including a 75kW fuel cell system for buses, coaches, and data centers [3][4] - Symbio targets a production capacity of 10,000 systems per year at its SymphonHy gigafactory in Saint-Fons by 2028-2030 [4] Future Developments - Research and development efforts will focus on a next-generation 150kW fuel cell system for heavy-duty vehicles, with a potential commercial rollout expected around 2030 [4]

Core Viewpoint - The proposed reduction of fuel economy standards by former President Trump has led to a significant increase in the stock prices of European automakers, indicating a positive market reaction to the potential easing of regulations [1] Group 1: Stock Market Reaction - Stocks of major European automakers saw notable increases, with Porsche rising over 5%, Mercedes-Benz and Volvo nearly 4%, and Renault over 3%. Stellantis also experienced gains of over 3% in both Italy and France [1] Group 2: Regulatory Changes - Trump's proposal aims to lower the average fuel economy standard for light vehicles to approximately 34.5 miles per gallon by 2031, a significant decrease from the current requirement of 50.4 miles per gallon [1] - The U.S. Department of Transportation estimates that the new standards could save car buyers $109 billion over the next five years, with an average reduction of $1,000 in the purchase cost of new vehicles [1] Group 3: Industry Perspectives - Stellantis' CEO expressed a desire to collaborate with the National Highway Traffic Safety Administration to create policies that balance environmental responsibility with affordability for consumers [2] - Volvo acknowledged the uncertainty surrounding the regulatory changes but remains committed to becoming a fully electric vehicle company by 2040, while also planning to introduce several hybrid models in the U.S. by 2029 [2] - An automotive analyst from Equita noted that the proposed standard changes were not unexpected and are likely to have a positive impact on the industry, with speculation that the EU may soften its electrification targets by 2035 [2]

Core Viewpoint - The Trump administration announced a reduction in fuel economy standards for vehicles produced in the U.S., aiming to lower costs for consumers and protect jobs in the automotive industry [2]. Group 1: Fuel Economy Standards - The new average fuel economy standard for light vehicles is set to reach approximately 34.5 miles per gallon (about 6.9 liters per 100 kilometers) by the 2031 model year, significantly lower than the current requirement of 50.4 miles per gallon (about 4.7 liters per 100 kilometers) [2]. - The U.S. Department of Transportation estimates that the new standards will save car buyers $109 billion over the next five years, with an average reduction of $1,000 in the purchase cost of each new vehicle [2]. Group 2: Industry Reaction - Executives from major automakers, including Ford, General Motors, and Stellantis, attended the announcement ceremony, with Stellantis shares rising over 3% and Toyota shares increasing nearly 2% in pre-market trading [3]. - Ford and General Motors also experienced slight increases in their stock prices during the same period [3].

Core Points - Stellantis is recalling 72,509 Ram vehicles in the U.S. due to a software glitch in the instrument panel display that causes it to go blank [1] Group 1 - The recall affects Ram vehicles specifically, indicating a targeted issue within this model line [1] - The U.S. National Highway Traffic Safety Administration is involved in the recall process, highlighting regulatory oversight [1]

Core Viewpoint - The article discusses President Trump's announcement to revoke the fuel efficiency standards set by the Biden administration, claiming it artificially raised new car costs and would allow consumers to save at least $1,000 on new vehicles [3]. Group 1: Trump's New Regulations - The fuel economy standards, established by the U.S. Department of Transportation, set minimum miles per gallon for passenger cars and light trucks [5]. - The Biden administration's 2022 standards aimed for an average fuel economy of approximately 49 miles per gallon for 2026 models, with annual efficiency improvements of 8% for 2024-2025 models and 10% for 2026 models [6]. - Trump's proposal suggests restoring average fuel economy to the 2022 model standards, requiring manufacturers to increase efficiency by only 0.5% annually until 2026, and then by 0.25% annually, leading to an expected average of 34.5 miles per gallon by 2031 [7]. Group 2: Reactions from the Automotive Industry - Ford's CEO praised the new regulations as aligning fuel economy standards with market realities, emphasizing progress in carbon emissions and energy efficiency while maintaining consumer choice and affordability [9]. - General Motors' CEO highlighted the challenges faced before the revocation of California's zero-emission vehicle regulations, indicating potential factory closures due to production limitations [9]. Group 3: Opposition to the New Standards - Critics argue that the previous fuel economy standards could have saved Americans $23 billion in fuel costs and reduced national fuel consumption by 70 billion gallons [10]. - Environmental advocates express concern that weakening clean car standards will allow manufacturers to produce less fuel-efficient and more polluting vehicles, potentially costing consumers an additional $35 billion at the gas station [10].

Fuel Economy Regulations - Former President Trump announced plans to roll back Biden-era fuel efficiency standards from approximately 50 miles per gallon (mpg) to 34.5 mpg by 2031, along with the elimination of the Corporate Average Fuel Economy (CAFE) credit trading program by 2028 [2][3] - The rationale for this rollback is centered around "affordability" and "consumer choice," with claims that it will save American families an average of $1,000 on car prices and a total of $109 billion over the next five years [3] Automotive Industry Reaction - The automotive industry, particularly the Detroit Three (Ford, General Motors, and Stellantis), expressed strong support for the rollback, viewing it as a victory for common sense and market alignment [4] - Following the announcement, traditional automakers saw stock price increases, with Stellantis surging 7.64%, Ford and General Motors both gaining less than 2% [5] Impact on Electric Vehicle Manufacturers - The elimination of the CAFE credit trading program is expected to create a regulatory advantage for traditional automakers while potentially harming electric vehicle manufacturers like Tesla and Rivian [6] - Despite this, Tesla's stock rose by 4.08% following the announcement, indicating that market reactions can be unpredictable [6] Trade and Tariff Developments - President Trump has renewed threats of tariffs on China, which has historically affected the soybean market, with soybean futures showing slight increases amid ongoing trade tensions [8] - Costco is suing the U.S. government for refunds on tariffs, with $90 billion in tariffs collected, reflecting broader concerns about tariff legality and market implications [9] Market Volatility and Reactions - The market has shown predictable volatility in response to Trump's tariff announcements, with significant drops in major indices following threats of increased tariffs [10] - The "Trump effect" on stock markets illustrates a cycle of immediate reactions to policy changes and trade rhetoric, with markets adapting to this volatility [14]