FCA and PSA Propose Merger as Electrification Flags

Fiat Chrysler Automobiles (FCA) and PSA Group have proposed a merger in order to advance their shared and electric mobility goals.

Both manufacturers are somewhat lagging behind in creating electrified vehicles, with TU-Automotive‘s editor saying back in May, when the company proposed a merger with the Renault, that FCA ‘is perceived as being chronically behind the most immediate demands of electrification’. It currently has one EV on the market, the Fiat 500e, with more planned.

PSA, for its part, is also falling behind its rivals; the company’s current electrification strategy means that by 2025, every vehicle it produces would have an electric variant, with three ICE-derived EVs, the Opel/Vauxhall Corsa-e, the Peugeot e-208, and the e-2008, currently on the market in 2019. It does, however, have a good range of electrified LCVs, with Citroën and Peugeot both offering electric versions of their vans. However, Volvo achieved full electrification of its passenger car lineup this year, while Volkswagen is not too far behind, with mass production of its first EV, the I.D3, beginning imminently.

The new company will be 50-50 owned by FCA and PSA shareholders alike. The chairman of the combined group would be the current FCA chairman, John Elkann, while PSA chief executive Carlos Tavares would be CEO of the company. He is known as a fierce critic of electric vehicles, having said publicly in the past his company ‘will not pay for charging infrastructure’, believing this to be up to individual governments.

TU-Automotive spoke to Mike Vousden, automotive analyst at Aroq, to find out what the proposed merger would mean for both companies electrification efforts. He said: “Beyond 2021, however much Tavares dislikes EVs he can’t shy away from them any longer. PSA’s been fortunate that its small-car bias thus far has given it goals that aren’t too much of a stretch for 2020/21. Fiat benefits from that tie-up too, but the combination may still need Tesla to help get over the line and avoid crippling fines. For 2025 and beyond, EVs can no longer be avoided, especially as growth in SUVs threatens to undermine progress in CO2 targets that many OEMs have made thus far.”


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