Amid declining Jeep sales, automaker Stellantis (NYSE:STLA) is temporarily cutting a shift at one of its Detroit plants and slashing positions at its Toledo plant, according to Bloomberg.
The Detroit plant produces Jeep Grand SUVs and hybrids, while the Toledo plant manufactures the Jeep Gladiator pickup and the Wrangler SUV. Notably, Stellantis has cited stringent emissions standards in California and other U.S. states for this move. The company is lowering Jeep production in anticipation of a decline in gas-powered vehicles. Reportedly, it has also filed a petition against California authorities, asserting that the emissions standards place Stellantis at a disadvantage against its rivals.
Despite the government’s push for EV adoption and better fuel economy, sales of EVs are sagging. Further, the automotive industry has cautioned that these stricter norms could result in fines to the tune of billions. Major U.S. automakers are still reeling from the recent UAW strikes. With the strikes resolved, these companies are now looking at ways to lower costs. According to the Detroit Free Press, nearly 3,700 positions could be affected at the two Stellantis plants.
In another development, Stellantis has teamed up with EV battery swapping solutions provider Ample to support a shared fleet of Fiat 500e vehicles in Spain. Importantly, Stellantis could scale the partnership to personal EVs in the U.S. and Europe.
Is STLA a Good Stock to Buy?
Despite facing sales and labor challenges, shares of the company have gained nearly 48% over the past year. Overall, the Street has a Strong Buy consensus rating on Stellantis, and the average STLA price target of $25.60 implies a modest 13.5% potential upside in the stock.
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