Stellantis to invest $6 billion in Brazil to make hybrid cars

Stellantis, the parent company of Jeep and Ram, plans to invest 30 billion reais ($6.1 billion) in Brazil to support the production of flex-hybrid vehicles and get a leg up on the competition in South America.

The investments will be paid out between 2025 and 2030, according to Stellantis. They will support the launch of more than 40 new products over the next five years and a series of “new Bio-Hybrid technologies” and “innovative decarbonization technologies.” The first launch of new models will occur in the second half of 2024.

“This announcement solidifies our trust and commitment in the future of the South American automotive industry and is a response to the favorable business environment here,” Stellantis CEO Carlos Tavares said in a statement. “South America will take a leading role in accelerating the decarbonization of mobility together with our employees, our supply chain network and our partners. ”

The investment in electrification and eco-friendly technology also advances Stellantis’s aim to reduce its environmental impact. As part of its Dare Forward 2030 strategic plan, Stellantis has pledged to invest over €50 billion ($54 billion) in electrifying its fleet and becoming carbon net zero by 2038.

Several of the Netherlands-based automaker’s competitors have previously announced investments in Brazil, spurred on by President Luiz Inácio Lula da Silva’s Green Mobility and Innovation program. The “Mover” initiative includes tax incentives for companies that invest in decarbonization and the creation of new technology. It also created new sustainability standards for vehicles.

Volkswagen Group, General Motors, Hyundai Motor, and Toyota Motor have all revealed plans to invest billions of dollars in Brazil over the next several years. Each company said it wants to electrify its products to be sold in the Brazilian market and invest in flex-hybrid variants.

BYD, China’s largest electric vehicle maker and the chief rival to Elon Musk’s Tesla, also has plans to expand in Brazil. The automaker on Wednesday began work on its 3 billion reais ($620 million) project to renovate an industrial complex once operated by Ford Motor Co.

“The automotive industry must enter clean mobility through accessibility. If the middle classes cannot buy, there is no volume and there is no positive impact on the planet,” Tavares told reporters during a media briefing Wednesday.

Stellantis’s current investment cycle began in 2018 and ends this year. The plan allowed for the investment of 16 billion reais ($3.2 billion) to launch 43 products among the eight brands it operates in South America; around 80% of Stellantis’s resources are concentrated in Brazil, where the company has three factories.

The automaker sold more than 878,000 vehicles in South America last year, giving it a market share of 23.5%, according to Stellantis. The company said it has a 31.4% market share in Brazil, with 686,000 units sold.