Stellantis to generate own power at European plants

DETROIT — Stellantis is considering “significant” investments to produce energy for its European facilities as part of its response to the threat of the cut-off of natural gas supplies from Russia.

“We are now preparing a very strong energy (use) reduction plan,” CEO Carlos Tavares,Tavares told reporters during a video conference on the sidelines of the Detroit auto show on Wednesday.

“We are going to make significant investments to produce our own energy onsite,” Tavares said. “This will be decided in the next few days.”

Tavares said Stellantis plant sites have space for additional solar power arrays but did not offer more details.

The automaker is working on measures to cut energy consumption, Tavares said, modelled in part on steps he saw Japanese companies take after a tsunami knocked out power supplies in 2011. Tavares previously was a top executive at Nissan.

So far, Tavares said, the company’s European operations have not been affected by disruptions to Russian gas supplies, “beyond cost.”

“It’s one additional element of chaos,” Tavares said, on top of the supply chain and pandemic disruptions the automaker has dealt with for two years or more.

‘Chaos on chaos’

Industrial companies across Europe are bracing for a winter during which utilities may struggle to keep the lights on as Russia chokes off supplies of natural gas following its invasion of Ukraine.

European government are preparing blackout plans as the region faces an energy squeeze that is getting worse with each passing week. France’s Reseau de Transport d’Electricite said Wednesday it will probably have to ask the country to cut consumption several times this winter to avoid rolling blackouts.

Stellantis has so far not been affected beyond dealing with higher costs, Tavares told reporters. If there is an energy crunch, the automaker may have to avoid operating at peak consumption times and schedule weekend work, he said. Remote working also would help and the carmaker has “big areas that can easily welcome solar panels,” Tavares added.

“When you add chaos to the chaos, you don’t see so much difference,” Tavares said. “We have been managing this industry in the last few years in health-related chaos, supply chain-related chaos, regulatory chaos, and now energy chaos.”

No ICE split

Tavares affirmed that he does not plan to separate Stellantis into electric and combustion technology units, as French rival Renault has proposed.

Ford has created parallel electric vehicle and combustion units within the company.

“We do not see the business as an obsolete business from one side and a new business on the other side,” Tavares said.

Bloomberg contributed to this report