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Daimler (DDAIF) and Stellantis (STLA) Boost EV Battery Game

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·4 min read
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  • DMLRY
  • STLA.MI
  • F

Daimler DDAIF and Stellantis STLA recently entered into a strategic agreement with solid-state battery maker Factorial Energy.

Per the agreement, the automakers will make a strategic investment in Factorial to commercialize the latter’s battery technology. The financial details of the deal are still under wraps.

Amid the heightening climate change concerns, investors are intrigued by automakers that provide green transportation solutions. A shift toward an electric future has made it necessary for auto players to reorient their business model and accelerate the e-mobility game. Thus, automakers are spending billions on developing solid-state batteries, the next generation of technology that warrants expedited charging, better energy storage and enhanced efficiency, thus making electric cars attractive and viable for as many people as possible.

Daimler and Stellantis are both committed to providing sustainable means of transportation. Recently, Daimler, the parent brand of Mercedes-Benz, pledged to phase out fossil fuel vehicles by 2035 in key markets and by 2040 globally. The German luxury carmaker also plans to invest more than 40 billion euros ($47 billion) in its quest to electrify its vehicle lineup by the end of the decade. DDAIF also intends to build eight factories to mass-produce batteries, a key component of electric vehicles (EVs).

Meanwhile, Stellantis has also vowed to invest more than 30 billion euros ($35.54 billion) by 2025 in software development and electrification of its vehicle lineup, aiming to be 30% more efficient than the industry concerning its total capex and R&D expenses. The commitment marks a historic step for STLA to bring together and electrify 14 brands under one roof. Further, Stellantis aspires to transit more than 70% of its vehicle sales in Europe and more than 40% of vehicle sales in the United States to low emission vehicles (LEVs) by 2030. In fact, the auto biggie recently inked a five-year deal with lithium developer Vulcan Energy Resources to supply battery-grade lithium hydroxide in Europe.

The latest deal with Factorial demonstrates the efforts of Daimler and Stellantis to achieve their carbon-neutrality goals in a sustainable manner. The deal will help the automakers boost their battery capabilities and thus ensure an accelerated transition to EVs. The solid-state battery technology promises longer ranges, reduced costs and safer EVs for customers. In fact, reportedly, solid-state batteries, manufactured in mass, can be made at 40% of the cost of current lithium-ion batteries. Thus, this state-of-the-art technology will enable the production of affordable electric cars with better range and quicker charging times —two of the biggest hurdles to mass EV adoption.

This September, Daimler also acquired a 33% equity stake in battery cell manufacturer Automotive Cells Company (ACC) – a joint venture set up by Stellantis and TotalEnergies. This made Daimler an equal shareholder alongside Stellantis and TotalEnergies.

Daimler currently carries a Zacks Rank of 3 (Hold) while Stellantis sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

EV Push by Other Key Automakers

Ford F is also committed toward its goal of providing carbon-free transportation in the upcoming years and is boosting its electrification efforts to attain this target. The automaker has always been at the forefront of the automotive revolution and is focused on its vision of an all-electric future, including fifth-generation lithium-ion batteries and preparing for the transition to solid-state batteries.

Ford has committed to invest more than $30 billion by 2025 for the electrification of its commercial and retail fleet by capitalizing on its strength, starting with the EV versions of the company’s most popular models. F recently announced its plans of investing $11.4 billion for building two new environmental-friendly and technologically-advanced campuses in Tennessee and Kentucky that will produce next-generation electric F-Series trucks and batteries to power the future electric Ford and Lincoln vehicles.

General Motors’ GM big push toward EVs is also commendable. The automaker has committed to invest $35 billion in EVs and autonomous vehicles by the end of 2025, marking a 75% jump from its initial $20-billion plan. At the heart of this strategy lies the automaker’s Ultium battery platform, which will power everything from mass market to high-performance vehicles. The company is also moving ahead with constructing two U.S-based Ultium battery cell plants along with the battery cell plants currently under construction in Tennessee and Ohio.

In October, General Motors announced plans to invest in the next-generation battery facility – Wallace Battery Cell Innovation Center – that will significantly expand GM's battery technology operations and boost the development of longer range and more affordable EV batteries.


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Ford Motor Company (F) : Free Stock Analysis Report
 
Daimler AG (DDAIF) : Free Stock Analysis Report
 
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Stellantis N.V. (STLA) : Free Stock Analysis Report
 
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