Stellantis N.V. (STLAM) Earnings Call Transcript & Summary

Any forward-looking statements that might be made during today's call are subject to the risks and uncertainties that are noted in the safe harbor statement, and the call will be governed by that language.

Welcome, everybody, to an exceptional event, Stellantis' EV Day 2021. We have an exciting program for you. We're going on a journey together into the core of Stellantis' electrification strategy. The stars are here, and they are aligned. The star iconic brands, of course, are up first; then the star technologies; the batteries; the platforms. But these must be aligned with ecosystems that really serve sustainability. Then we will turn to the financials and, finally, the conclusion. All these stars aligned with one aim, to answer customer needs, customer expectations and customer desires. We know that you, investors, financial analysts and the media, you want to look under the hood and see what's really going on. Well, you're going to find out. And please, if you have any questions, note them down because we have a dedicated Q&A at the end of the session, where we will be pleased to answer all your questions. My name is Paul Barrett, and I will be your moderator for the session. To begin this cornerstone event, I'm going to call on stage a man who has lived and breathed cars for more than 40 years. And he has a mission: to make them safe, sustainable and affordable for every citizen on earth now and for generations to come. Please welcome the CEO of Stellantis, Carlos Tavares.

Good morning, ladies and gentlemen. Welcome to this Stellantis' electrification event. I trust that you and your families are well. Please take care. We know that you are very busy people, and therefore, we value your time. Thank you for your interest in Stellantis. The purpose of today's session is to demonstrate to you that Stellantis is now in full execution mode, at full speed on its electrification journey. 5 months after its birth, powered by its diversity of people and brands, Stellantis accelerates to lead the way the world moves, a deeply vertically integrated strategy that increases our activity against the previous business model. 4 battery electric vehicle-focused brand-new platforms, state-of-the-art platforms, platforms that carry the best of our engineering expertise, platforms that want to compete, and they raise the bar in terms of performance. Those platforms, those 4 dedicated platforms, will have performance with ranges moving from 500 for the most compact one to more than 800 kilometers of range for the largest one. 5 giga battery factories and supply contracts to support our business in Europe and the United States, with more than 260 gigawatt-hours of supply capacity. In Europe, after France and Germany, we have now agreed with the Italian government on the support to transform our powertrain plant internally. And this plant will be transformed into the third giga factory that we will have in the European continent. A dedicated and separated software division to reduce our lead time, create new businesses and change our life-cycle management through OTA upgrades. By 2025, across our 14 iconic brands, 98% of our models in Europe and North America will be electrified. As a consequence, we forecast that by 2030, 70%-plus of our European sales and 40%-plus of our U.S. sales will be LEV. To support this exciting and fast transformation, we will invest, thanks to Stellantis' scale, no less than EUR 30 billion over the next 5 years. We have gathered enough ideas, synergies and new initiatives to share with you today that from 2026, our fully electrified business model will deliver a sustainable double-digit adjusted operating margin. As you know, at Stellantis, we love to compete. This transformation period is a wonderful opportunity to reset the clock and start a new race. We love it. And we will demonstrate today that this is not a one-man show. You will feel the passion and the vision of our brand CEOs, the depth of our functional experts, the business acumen of our regional leaders. Stellantis' top executive team is fully aligned and raising life. Let's start.

Thank you very much, Carlos, and see you later for the conclusion. So now customers and brands. Let's discover how customer-centric Stellantis is. And please welcome Thierry Koskas. Hi, Thierry.

Hi, Paul.

So must be a very exciting day for Stellantis but hopefully also for your customers.

Yes, and a lot of them, Paul. Imagine that in 2030, low-emission vehicle sales will account for more than 70% of our sales in Europe and more than 40% of our sales in the U.S. And this is obviously a huge increase compared to current status as we will end up 2021 at 14% of our sales in Europe in low-emission vehicles and 4% in the U.S.

Wow, these are really impressive figures. I mean how can you be so sure?

Well, what I would suggest is let's listen first to our customers.

Okay. Listen to the customers.

I would say I'm an early adopter, yes. I don't know anybody else who has purchased one apart from myself.

My honest hope is that the 4xe as a plug-in hybrid becomes a nonissue and it just goes full electric down the road.

This is a much more environmental friendly form of transport.

[Foreign Language]

It's quiet. You just put your foot down and go. It's just effortless, really.

Driving around the city streets, I could always accelerate as I needed to.

[Foreign Language]

The kids love it. And it's just so easy and practical and cost-saving.

My favorite thing about the [ Army ] was how it looks, and it was very easy to park.

[Foreign Language]

With the extension of the long range, we can cover 75% of our fleet.

[Foreign Language]

The only negative I can pick upon is the range.

[Foreign Language]

[Foreign Language]

As a DHL, we have a full commitment to really be serious about our role, to make the world a better place. Electrification is part of our future. As a matter of fact, we don't have any other option.

I can't ever see me going back to petrol and diesel car. It's just a no-brainer for me.

So Thierry, okay, we saw some happy early adopters there. But there were some road box -- road blocks that they did mention. What do you think about that? Why are you so confident that despite that, that we'll go on to make these sales?

We don't ignore that, obviously, Paul, but we are very confident for 3 reasons. The first one is it's really a demand for our customers to drive eco-friendly vehicles. When you look at all the trends survey, it shows that eco-consciousness, preserving the environment is the fastest-growing trend on the -- over the last 5 years, everywhere in the world for all generations. So it's something that is becoming very, very important.

And this is like central in terms of electric vehicles.

Absolutely, absolutely. And the second reason is the range. So yes, there were some objections on that. But thanks to the improvement of the batteries that Patrice Lucas will detail later, also thanks to the development of the domestic and the fast-charging infrastructure that [indiscernible] will also explain, we will be able to satisfy most of the customers. And just to give you some figures, in the small car segment, 80% of the customers will be able to enjoy an electric car without changing the habit whatsoever. And if you look at compact and midsize segment, not only in Europe but also in the U.S., it's 90%. And if you look at light commercial vehicles, all the customers, 100% of the customers will be, I would say, compatible with zero-emission cars without changing the way they work and the way they use it. So where do these figures come from? It's very scientific and very simple approach, assuming that for daily trips, you use the range of the battery. But when you have to do longer trip, you do some small stops, very short, very short, using fast charging, like 20 minutes, for example. A few stops that enable you to do much longer, much longer trips. So we really, really are compatible with most usage of the customers by 2030. And the third reason why we are confident is the cost. That was also highlighted by the customers we listen to, especially the British lady. And I think that it's very important to be able to offer affordable vehicles. What we will be able to do is by 2026, to have similar total cost of ownership compared to a conventional car without any government incentive. Total cost of leadership includes depreciation of the car, maintenance, the energy and the insurance. So all the costs related to owning a car. So for these 3 reasons, we are very confident.

So we can all look forward to some very happy holidays and at low cost.

Exactly.

Okay. Thank you very much, Thierry. So aligning with customer needs, yes, it's very important. But the next step is to discover how they actually -- how this actually pans out in practice with the 14 iconic brands over the world. Customers love these brands. They're a part of their everyday lives. So the iconic brands, here they are. Choosing only 6 wasn't easy, but we're off to Germany for our first snapshot because we wanted to start with a brand that has always been about delivering emotions to their customers, that is close to their customers, approachable, or as they say in German, menschlich. Over to you, Michael.

Hello, and [Foreign Language] here from our design center. Electrification at Opel means emotions for our customers. And we deliver pure emotions with electrification. And you can actually see it in our logo, the Opel Blitz. We have a flash and a wheel, and bring this together, the Open Blitz. And we, the Opel brand we are very approachable human or in German language, menschlich. Now have a quick look how we connect in a very emotional way to our customers. We have taken the legendary Manta A pod electrification in it and have an ElektroMOD. And this is really an emotional connection to our customers. [Presentation]

This is how we drive into the future. And Opel has a long history, a pioneering history in electrification, starting in 1971 with the Electro GT. Again, we are modern, approachable, very human brand. We drive renovation. And we love emotions for our customers. Another great example is Opel is the first brand rallying electric cars, the Corsa-e e-Rally Cup. And we at Opel, we are on a journey from cold to cool. Just in this year, we have 9 electrified offers. We will have the fuel cell in our Opel Vivaro this year. And we electrify our entire portfolio by 2024. And here's the first important news of today. By 2028, Opel will be purely electric in Europe. Opel is really the zeitgeist energy for the new world. And what does that mean? We are young-minded, green and global. Talking about globalization. Here is the second very important news of today. Opel will go to China and, of course, 100% electric. And green is the new cool. Here comes the third very important emotional news of the day. Opel will reinvent the Manta A by mid-decade and bring a very emotional car to the market. And this will excite our customers. So what are the 3 key messages of this important date? First, Opel will go purely electric in Europe by 2028. Opel will go to China and, of course, 100% electric. And third, very emotional news for our customers, Opel will bring the legendary Manta A to the market by mid-decade. With this, back to the studio [Foreign Language].

Thank you, Michael. Green is the new cool, everybody. You can still buy other colors, but they have to be green, right? Now let's go over to the States for a somewhat different approach. We're talking muscle here. We're talking power. And also, we're talking history.

We're here on location at the historic Dodge family home, with over 100 years of amazing Dodge heritage parked behind me. And today is an important milestone, embracing the brand's history while looking to the future. The Dodge brand all but defines pure American muscle and was born to push the boundaries of horsepower. For over 100 years, at the core of everything we do, you'll find a foundation of American ingenuity. And pure performance has been the Dodge purpose. Half a century ago, Dodge hit full stride when we introduced the Charger and Challenger. They quickly became icons of performance and attitude. Today, they set the benchmark by embracing ingenuity to push the performance envelope to deliver the most exciting and engaging muscle cars. And that's why Dodge will not sell electric cars. Dodge will sell American muscle. So if a charger can make a charger quicker, we're in. And while that may sound like a nuance, it's not, not to our customers anyways, because our customers purchase an experience, not a technology. And it may surprise you to learn that Dodge attracts one of the youngest and most diverse customers in the industry with the highest concentration of millennials, who now account for 1/4 of the U.S. population, with the highest spending power of any generation. And equally, if not more important, millennials also have the highest acceptance rate of EVs. That's why the convergence of a demographic with spending power and the adaptation of electric power creates the perfect gateway for a brand that's all about horsepower. The customer profile of the Dodge brand today will be a key enabler to getting muscle car buyers into EVs tomorrow. And EV technology will enhance the attributes that matter most to our customers. It's not unlike the formula we followed for over a decade as we continuously improve the Hemi power plant and its power output. With every gain in horsepower, we delivered a gain in market share. But even for a brand that's known for pushing it a bit too far, we've pushed this pedal to the floor. Our engineers are reaching a practical limit of what we can squeeze from internal combustion innovation. They know, we know that electric motors can give us more. And if we know of a technology that can give our customers an advantage, we have an obligation to embrace it, whatever it takes to keep them in the lead. Again, we won't sell electric vehicles. We will sell more motors, better, faster Dodges. Because Dodge doesn't view EV technology as a revolution but, instead, as a natural evolution of the modern muscle car. Let's face it, car and muscle aren't changing. And modern has an obligation, too. Dodge has made it this far by embracing evolution. And it's the same way that hammerhead shark is thrived at the top of the food chain evolution and able to become one of nature's most aggressive predators. So just as we did a half century ago, Dodge will embrace the sea of change in the marketplace to stand out by embracing electrification. Every ounce of technology we integrate will be done to amplify the elements that define not just Dodge but the muscle car itself. And in 2024, Dodge will launch the world's first full battery electric muscle car. Through intelligent evolution, we expect to thrive and define the future of American muscle to tear up the streets, not the planet. [Presentation]

Thanks, Tim. I love that last line, "Tear up the streets, not the planet." So that was Dodge. Over to Europe, again, for a very French brand, a brand that has centered its energy on giving choice to its customers, quality time with Peugeot. Over to you, Linda.

Thank you, Paul. Well, ladies and gentlemen, welcome to Peugeot. And for 3 years now since the launch of the fully electric Peugeot e-208, the Peugeot brand has been acting as an LEV pioneer for Stellantis and has taken on the role of frontrunner. Providing electric mobility for demanding customers is already a reality at Peugeot, with 70% of all models in Europe available in an electrified version, from passenger cars to vans, not to mention, Peugeot e-bikes and e-mopeds. Electrification is at the heart of our Power of Choice strategy. It means we are committed to offering the brand's customers the choice of powertrain that best suits their needs. Peugeot's full electric models have had great success. For the first 5 months of 2021, Peugeot is the second best-selling generalist brand in Europe for overall model sales and the third-best generalist LEV brand. The Peugeot e-208 and e-2008 have posted strong results as second most registered models in their respective BEV segments, gaining segment share year-on-year. Our power of choice strategy is bearing fruit, not only proving successful in terms of sales but also contributing to our profitability. Indeed, there is parity in margins between Peugeot internal combustion engine models and electrified models. And furthermore, 45% of our LEV sales are upper versions. With this, strong sales performance supports our energy transition journey. In Europe, our transition is intensifying, 85% of our models will be electrified by 2023, and this will be 100% by 2025. And internationally, we will use our strong EV model portfolio to stand out as an inventive, high-end generalist brand in emerging EV car markets. And tomorrow, well, tomorrow, the dedicated BEV platform will bring new customer benefits, further enhancing the Peugeot pleasure of driving. Thank you. And now back to Paul in the studio.

Thank you, Linda. So back to the U.S. again, this time in the heart of Michigan, where the future is being made while we speak, always on their quest for excellence. They are blazing their own trail. Over to you, Mike. [Presentation]

Hello, everyone. We are coming to you from the heart of our tech center in Auburn Hills, Michigan, where the future of our brand is right here. And today, we'd like to walk you through Ram's vision for the future. As the only dedicated truck and van brand, Ram's foundation is strong. We are built to serve. And this is a promise we make to our customers every day. And it is our promise to serve the next generation of Ram customers with a next-generation portfolio of products that delivers on their real-world demands. Challenging convention, we will push past what competitors have announced, past what the customer expects, to a fuller portfolio of technology, with more range, more power, more productivity and more convenience. Now the fact is our focus is on bringing the right product at the right time. Research has shown us that the truck customers are open to electrification but are not willing to sacrifice power, performance or capability. And that's why as we are in full motion on our portfolio of solutions, we are addressing the real-world demands of our customers. Now for pickup owners, capability is critical since so many are towing and hauling regularly or with aspirations to do so. And van segment capability requirements are focused on payload and cargo space with some lighter towing but always with an eye on commercial and business needs. It is our responsibility to listen to our customers, understand what they need and to bring tailor-made solutions since one size fits all doesn't address our customer needs. There is no reason why electrification should limit the choice of solution we owe to our customers. And that's why Ram will differentiate itself from competitors by offering a full portfolio of electrified solutions to better meet these customer needs. We will be customer first. Our technology will alleviate customer concerns, improve the product and deliver on real-world demands. We will offer a better range of Ram e-technology with architectures that are designed to evolve in the future, based upon changing customer needs, usages and expectations, adoptable across a wide variety of products. And in 2024, with full knowledge of what our competitors are doing, we will surpass their offerings with the Ram 1500 battery electric vehicle built to, again, redefine the full-size segment. In summary, we are not following in the footsteps of our competitors. Our plan is on track to start production on the class-shattering Ram 1500 battery electric vehicle in 2024. And as the only dedicated truck and van brand, Ram will offer a fully electrified solution in the majority of our segments by 2025 and a full portfolio of electric solutions for all of our segments no later than 2030 because it is our responsibility to serve our loyal following of Ram owners, who believe in our products and who are proud to wear our badge today, but also bring in a greater number of new customers to our brand by continuing to be bold and challenging tradition. Because when you think about the disruption that Ram has created in the last decade, just think about what can happen in this next one. Thank you for your time. [Presentation]

Thanks, Mike, and thanks for talking disruption because, very shortly, we're going to start talking technology and batteries. And you will see, there's going to be even more disruptive technologies in the pipeline. Now change of scenery, change of mood. We're going to Italy for a little bit of dolce vita and fun. Green is only green when it's green for all. And the CEO of Fiat is going to say a few words from an iconic place in Turin. [Presentation]

Hi. So did we really need a lockdown to get that message? Well, now it is time to move in the right direction. So here is just one idea. As you can see around me, we are turning the roof of our old factory in Turin into a garden, a hanging garden soon to be open to all the people of our city. This, I think, is a strong signal that we are on an ambitious path to sustainability embodied in our tag line, "It's only green when it's green for all." That's Fiat DNA for all. Now what is Fiat about? It's about simplicity, fun and social relevance, typical Italian DNA. And today, that DNA is priceless. I mean simplicity, it is a real asset in such a complex world. And so it's fun in a culture of worry. And now what made us so relevant in the first place, mobility for all evolves into sustainability for all. Now what does electric bring to cars? Well, we all know it brings car simplicity, with no gearbox and one pedal. Then it brings more fun to drive with tons of talk. Just try a new Fiat 500 electric. And last, it brings obviously more care for the planet, which is the biggest concern of our time. Bottom line, electricity just enhances Fiat. More simplicity, more fun, more relevance. And that is really good news because it means that we won't have to reinvent our brand, and we won't need to justify or explain or twist it like a pretzel. You see, Fiat going electric is just a fit. So no surprise. The new lineup we are cooking is going to embrace full electric, at least in Europe. So starting from today, the first EV-dedicated model is already on the suites. The Fiat 500 going electric only is a pretty radical choice. It means that we are going all-in. It's an iconic car with a cost. And as you can see here, so far, it's working. Next, totally electrified LCV lineup at the end of next year, which, by the way, includes fuel sales. And from 2023 and '24, you will see an unprecedented passenger car offensive that will bring electric versions on every nameplate. And the same year, 2024, Abarth, too, will switch to full BEV. Now the question is when do we shift to just BEV. Well, the answer is simple. With a democratic DNA like ours, we will do so as soon as we can offer electric at the price of thermic, which, in Europe, should happen by 2025, 2030. Now obviously, we don't want to just sit and wait and follow the trend. We want to disrupt and accelerate. And the ingredients for that are in our Centoventi concept presented in Geneva. This is exactly the kind of animal our DNA can generate. It's a pure people's electric car, affordable and using the concept of simplicity to cut the fluff and make way for batteries. So let me say, we are convinced that electric will bring new power to the brand by bringing new power to the people. So after 500, we are going all in once again because electric will reach our Fiat and because it's only green when it's green for all. Thank you.

Thank you, Olivier. I love what he said about the brand's DNA, such a central part of really meeting a huge diversity of customer needs worldwide. Each brand that you see is proud of its DNA, I can tell you. Next one up. We're going back to the U.S. It's Jeep. Over to you, Christian.

Hi, everyone. Jeep is more than a brand. It is a community. And I'm a lucky guy because I was inducted into this community by my father, who used to take me to the mountains in a Jeep release similar to this one. Those open-air trips are some of the fun and exciting memories of my life. And today, my mission is for the Jeep brand to deliver zero-emission freedom for the generations to come because Jeep 4x4 owners are much more than just clients, customers or target audiences. They're part of a community that lives and loves the Jeep brand value, freedom, adventure, authenticity and passion. This has been the cornerstone of our brand for 80 years. And to honor core values, we're committed to zero emission, 100% freedom. To build this future, first, we need to imagine it and then to make it happen. [Presentation]

This video feels like a dream, but the future is today. This year already, we're forging ahead into an electrified future with our 4 best-selling models, including the upcoming all-new Jeep Grand Cherokee 4xe we build here for the first time. We're also installing solar-charging stations to support our community where it matters most, the trail. And very soon, in 2025, we will have a zero-emission Jeep 4xe in every SUV segment. 4xe is Jeep brand's exclusive electrification approach to develop the most capable and sustainable 4-wheel drive vehicles in the world. 4xe allows us to give our community more of what they love about the Jeep brand; more capability by increasing on-demand torque for maximum traction, acceleration and 4-wheel drive performance; more fun by enjoying open air in nature and absolute silence; more style by opening the doors to new design possibilities and creating more space for people and gear. Let me be clear, 4xe is good for Jeep. It's good for the Jeep community. And more importantly, it is good for our planet. In 2021, 100% of our SUV lineup in Europe offers 4xe technology. Jeep Compass and Renegade 4xe are the best-selling low-emission SUVs in Italy, our largest market in Europe. And just 2 months after launch, Wrangler 4xe is already the best selling PHEV in America. And it is sold out for the rest of the year. Hardcore enthusiasts like those at Four Wheeler and financial media like Bloomberg both agreed that 4xe is the way forward for the Jeep brand. And this is only the beginning. By 2025, we'll be offering a zero-emission, fully electric Jeep 4xe in every single SUV segment. 70% of all Jeep vehicles sold will be electrified. And Wagoneer, as the premium extension of the Jeep brand, will expand to offer zero-emission vehicles in the most profitable premium SUV segment. 4xe is the most significant change ever. It is the opportunity to future-proof the Jeep brand for long-term profitable growth and value creation for our shareholders. I started today by saying that I was lucky to be introduced to the Jeep community many years ago by my father. Today, it is my commitment to all of you to continue this upward, forward and zero-emission path for the generations to come because 4xe is the new 4x4, and our future is zero-emission freedom.

Thank you, Christian. Zero-emission freedom for the Jeep community. So we're going to stop the catalog of brands there. We don't want you to get too dizzy going back and forth between Europe and the U.S. But you can discover some of the other iconic brand statements we didn't have time to cover today, Chrysler, Citroën, Lancia, Maserati. Oh, my God, and the list goes on. Now we asked Mike to also talk to us about a segment in which Stellantis looks to be well positioned to becoming a world leader, commercial vehicles. Over to you, Mike.

Our electrification strategy is enhanced as we think of our family of brands underneath the Stellantis' umbrella. And with our already strong sales position, in particular, the #1 position in Europe today and our strength in light- and heavy-duty Ram pickups in North America, Stellantis is perfectly positioned to become the world leader in e-commercial vehicles. Our strategic road map is clear and is already being delivered on. We will leverage the synergies we have within Stellantis to expand our electrification plan across all products and all regions over the next 3 years. We have a 100% electrified van range in Europe with midsize and large already launched and delivered and compact van first deliveries scheduled for the last quarter. And already today, we are taking this deep knowledge of electrification in our European operations and using it to accelerate electrification in North America, with the first beneficiary being the Ram ProMaster in the U.S. And our electrification leadership will quickly become even more concrete with the introduction of new technologies, with the delivery of our first fuel cell vans by the end of 2021. But that is just the beginning. Environmental trends and business conditions are motivating customers across all segments to consider new technologies and new innovations that serve their demanding and ever-changing needs. Their business needs are many, from delivery to construction to people mover to recreation and more. And their usage requirements are clear. So it's our #1 priority to understand our customer demands so that we could deliver a full portfolio of products that exceeds their expectations in all ways. And that's why we have focused on a customer-centric approach: to deliver the widest and deepest range of products, from the small omni cargo van to our largest Ram pickups and all the segments in-between; to develop products that are the best-in-class for capability, safety, strength, durability and innovation; and to offer a customer-driven range of electrified alternatives, to create platforms that are conversion-friendly, opening possibilities to customize the product exactly as they need it; and to provide an unparalleled customer experience with our customers' business through an extensive network of service support with focus on reducing the total cost of ownership and overall maintenance costs, all supported by a growing charging infrastructure that will be outlined in more detail later in these sessions. So to recap, these are transformational times for the commercial vehicle business. And make no mistake, there is no global company that is better positioned than Stellantis to deliver the right portfolio of solutions for the commercial customer. We are ready. Our ambition is strong. We will become the global leader in e-commercial vehicles. Thank you.

Thanks, Mike. I think the message here is that we are leveraging knowledge to become a world leader in affordable, sustainable and clean commercial vehicles. Okay. So far, we've talked about the market evolution and how having 14 iconic brands on both sides of the Atlantic is a considerable advantage when it comes to answering customer needs. But what about technology? Let's find out with our next chapter how platforms, powertrains, software and batteries are aligned and perfectly positioned to deliver on customer needs. So to give us an overview, let's turn now to Harald Wester speaking to us from Italy. Hi, Harald.

Hi, Paul, and hello, everybody, from Italy. As you have heard, electrification is at the core of our strategy and the chosen path towards our future. Our approach is not just about meeting compliance goals. It is, above all, about respecting all our customers by meeting and exceeding their expectations, reinforcing the DNA of each brand and offering a new sustainable and affordable mobility enabled by continued evolution and innovation in all areas. Having in mind what matters most to our customers in the era of electric mobility, the range, charging time, price and product variety, combined with the core values of our brands we have developed for fully dedicated BEV platforms. You'll hear more details about them shortly, but I can assure you, they will unlock new facets of our brands, taking their efficiency and performances to the next level. Let me give you some examples. The STLA Small platform reinforces efficient city mobility solutions for the Fiat and Citroën brands. STLA Medium was designed for our premium DS and Alfa Romeo vehicles. STLA Large is dedicated to a wide variety of SUVs, a highly innovative electrified pickup truck and the next generation of American muscle cars with breakthrough performances. And last but not least, STLA Frame creates convenience, capability and practicality for our commercial vehicle range for pickup trucks and full-sized SUVs. Electrification for us is about making our products like our world-renowned SUVs under the Jeep brand more relevant for the trail and the streets. It is about enjoying the instant target of fast response and delivering more fun and exciting driving experience in a sustainable way. It is about using electrified powertrains and high-efficiency batteries to enhance the true nature of each brand, the experiences they produce and the emotions they steer. We will take the lead in transforming the mobility concept the Stellantis way. Our solution to the equation is based on 4xe design BEV platforms with the most efficient common toolbox and systems, 3 core electric drive module families to ensure modularity and performances, and 2 battery cell chemistries to provide affordability to all. This strategy is supported by a strong core technology portfolio that will put Stellantis among the best-in-class players, if not setting a new benchmark in the industry. Our leading performances include over 800 kilometers or 500 miles of range, best-in-segment efficiency for energy demand in all 4 platforms, best-in-class efficiency per mile or kilometer traveled. That is under 12-kilowatt hours per 100 kilometers or 4.3 miles per kilowatt hours in the U.S. market; acceleration from 0 to 100 kilometers per hour in as low as 2 seconds; class-leading fast charging of 20 miles per minute or 200 miles in only 10 minutes; and best-in-class energy storage efficiency because our platforms will provide the highest energy density, reaching almost 60-kilowatt hours per meter. And we will offer over-the-air updates throughout the entire life of the vehicle as the software transformation is an important part of our EV transition puzzle. We are living in a period of disruption and radical transition, a truly defining moment for the industry, for all of us. And like everyone, we are facing many risks and headwinds. And who doesn't look far enough might fail. This is why our thinking and our vision goes far beyond our business plan period. We have developed a comprehensive strategy center around flexibility in order to extend the life of our platforms well into the next decade. And we like to call this a future-proof concept. It will allow us to constantly update, upgrade and enhance both the software and the hardware as the needs arise in terms of competitiveness, cost efficiency, weight and capabilities. In simple words, it enable us to naturally evolve over time. We will execute this strategy with a very passionate, highly dedicated and talented team, working side by side with either our partners or specifically forged strategic partnerships and joint ventures. And you've already heard and seen some examples, from the creation of the ACC joint venture to master technology and produce batteries with a highest level of performance and efficiency; to our partnership with Archer to develop electric vehicle vertical takeoff and landing devices for urban mobility; to the recent joint venture with Foxconn to develop breakthrough digital cockpits and personalized connected services. The most promising aspect is that our industry is in the midst of a transformation process. And this is being rebuilt tile by tile. This process is spurring initiative, creativity, innovation. And in the end, it will make our company and most importantly, our environment, a better and healthier place. And we, at Stellantis, we intend to lead that process. I will now leave the stage to my colleagues who will take you even deeper into our technology strategy. And we will start with Patrice Lucas and the platforms. Thank you all.

Thank you, Harald. So this is about technology, which provides leading performances, best-in-class efficiency, class-leading fast charging and storage efficiency. In other words, the intention here is to lead the game. So next step, deep dive into the platform. So please welcome, Patrice Lucas.

Hi, Paul. With Stellantis, we have defined a clear platform strategy with different modules and technology to cover the total and diverse customer needs and market needs, a strategy that will allow us to propose the most efficient solution for each category of vehicle size, attributes and usage from ultra compact car up to pickup, from arch, 2-door, SUV, van and truck silhouettes, covering the full market segmentation but will still remain after the shift to electrification. This strategy is the foundation of our product differences from now to 2030. This strategy is based on 4 platforms: 3 unibody and 1 body on frame. It is not a theoretical one-fits-all-needs strategy, but an optimized segmentation to cover our customer different usages and expectations with optimized performances and cost efficiency. We owe our customers the power of choice. We are driven by the performance. And these platforms, our design are the first place around the battery pack, and as a result, will provide the maximum embedded energy. This is leading to a best-in-class range performance and electrification efficiency. The Small platform will offer up to 500-kilometer range; the Medium, up to 700 kilometers; the Large and the Frame, up to 800 kilometers. These 4 platforms will be complementary in size and model flexibility to address all profit pools and market coverage. Each platform is optimized around vehicle width and length with a defined bandwidth. This is providing flexibility to build our vehicles to answer to mainstream or premium attributes and to answer to each of brand DNA to comply with customer expectations. To show what it means, let's take the examples of the platform, Large. This platform will address the midsize to full-size vehicle. That is a vehicle between 4.70 to 5.40 meters and width between 1.90 to 2.03. This platform -- we'll have this -- that on the other platform. The Medium, compact to midsized cars; the Small will address ultracompact to compact cars; and last, the Frame will address the full-size SUV and pickup trucks. We will have different battery sizes for each of them from 37 to more than 200-kilowatt hours to offer solutions for range anxiety and affordability. Efficiency being core, our optimized design around the battery, will provide a 94% useful energy efficiency compared to 92% for base competition. This platform will use common assets, which is a key lever for the business model sustainability. They will cross share electrified best-in-class components with stronger capability to adapt over time to technology evolutions for forever best-in-class performance. Cross-sharing all the major components is a real success factor for complexity reduction and volume bundling to sustain the economic performance. Versatility of this platform is also a strong asset. Technology is immersed, but passion and attractiveness remain at the core of our duty towards customers. We'll be able to provide a large degree of liberty to let our styling studios making very attractive design and stick to the DNA of our 14 brands. Who is better placed to talk about that? Let's have a specific view with Ralph on the Large and Frame platform.

Well, the reality of having 14 brands is that they each have their own deep legacies appeal and adoring customers. As designers, we see this as a tailwind, an exciting opportunity to take our loyal customers on a new journey. Along the way, we will continue to conquest and bring new customers into our brands while being careful caretakers of what our brands have come to define and represent. Thank you, Patrice. The STLA Large platform is an outstanding opportunity to take our customers and our brands a new journey to the future with us. The work on STLA Large is already well underway in our design studios. So far, they look to be some of the most beautiful cars we've designed yet, fully connected and fully electrified on the outside as well as on the inside. We're hoping to bring a new level of digital delight to our customers. And then my favorite aspect, creating the dream machines for the community of enthusiasts that consider their mobility as a form of expression. The STLA Large platform has outstanding fundamentals, with the batteries nice and low, the EDM motors at the edges, allowing for a variety of wheel sizes, suspension heights and widths. All these components are out of the way, allowing us to do just about whatever we want on the top surface, allowing us to create a long-range luxury sedan, an all-conquering muscle car, a heart-of-the-market DUV, a heart-of-the-market SUV, a very capable Jeep off-roading white space opportunity vehicle as well as a new midsize truck. Now we're working on these vehicles together, which allows us to share some of the most costly components in a way never before done. So 8 vehicles are now being created that will come to market in the next 3 to 5 years. But that's just the beginning. Eventually, the STLA Large platform can actually touch all 14 of Stellantis' brands. And one of the most important segments in the North American market, as we all know, is a segment the Ram truck plays in, the 1500. And there's a new platform we're working on with engineering called STLA Frame. Similar ideals. The battery pack is nice and low, nestled in the strong frame; the EDM motors at the edges align for outstanding capability, but also giving us an opportunity to redefine what the full-size truck looks like and also how it works. Stay tuned because there's some pretty cool looking Ram trucks coming your way. And with that, back to you, Patrice.

Thank you, Ralph. You have demonstrated what we will be able to deliver, make different vehicle size from sedan to SUV, including a pickup on our Large platform. But to cover the full scope of a pickup usage, our Frame platform is going to be a must. The Frame platform will offer to our truck customers the choice between a BEV and a new solution. On one hand, our BEV with full capability with a best-in-class range up to 500 miles. On the other hand, a new solution, which is going to break the paradigm. We call it REPB for Range Electric Paradigm Breaker. And we consider it as a unique selling point, which will make the difference versus competition. So we have decided to keep it confidential today. More will come in an appropriate timing. Just want to tell you that with this new solution, we will answer to the customer range anxiety, with a specific customer usage expected by such vehicles. In particular, in towing conditions, we will get the benefit of an electrified vehicle without range anxiety, with a range at the level of a traditional powertrain, with no compromise on the key characteristics being payload, cargo volume. Again, our customer will have a power of choice, a full BEV of this unique REPB offer. Finally, yet importantly, thanks to our 14 brands portfolio and worldwide footprint, we'll have for each platform the critical volumes to ensure purchasing and manufacturing efficiency. Each platform will be, at a point of time, up to 2 million units per year. This will guarantee our critical size for optimized investment and competitive unit cost. This is a key success factor for our value optimization. Thank you.

Thank you, Patrice and Ralph. Any questions so far? Well, don't forget, there's a Q&A at the end. So note them now, and we'll deal with them later. Four platforms built around our energy density batteries that provide infinite variations. It's not one size fits all. But it's maximum commonality, maximum differentiation to cover the profit pools from small cars to big trucks. But what about the software? What are the critical factors in mastering the power of software? Please welcome, Yves Bonnefont.

Thank you, Paul. EV is all about energy efficiency, charging and integration in the ecosystem. Software will help on 3 fronts. The inverter, we drive traction control and regenerative braking, so fundamental to the energy efficiency. The battery management system for charging and for the lifetime of the battery. And of course, the smart cockpit and remote operation to integrate the vehicle in its ecosystem. On the inverter and the BMS, we have in-sourced the development of software. On the smart cockpit and connectivity, we have announced a joint venture with Foxconn to leverage their capabilities in terms of consumer electronics and connectivity in the mobile Internet. With this increased control on the software value chain, we will be able to deliver over-the-year updates on a frequent basis to our vehicle. OTA is at the core of our software strategy. This software strategy is based on 3 components: the design of fluid customer experience. This is a customer-driven strategy, not a techno-push strategy. Second, data. We want to leverage the 12 million active connected vehicle Stellantis has on the road. We want to leverage them in order to understand how customers use our vehicles, how they use our features to provide the data needed for the development of our artificial intelligence-based features; and also, of course, to share data with third parties and create new services to integrate the vehicle in its ecosystem. Third, thanks to the over-the-air update strategy, we will continuously improve and upgrade the experience of our customers by delivering updates over the air, and we're targeting more than 15 million updates by 2023. So you see, the software strategy is fully there to support the EV strategy of Stellantis. Thank you very much, Paul, and thanks to all of you.

Thank you, Yves. And now let's dive deeper under the hood and look at the powertrains, the drive units, the EDMs. Please welcome, Micky Bly.

Thank you, Paul. Now let's take a look at our drive units and how they will play a fundamental role in our electrification strategy, putting us in the front row in our race to innovate and improve the way our societies move. As was the case with our platforms, we've developed a comprehensive strategy also for electric powertrains centered around flexibility and modularity. This will lead to Stellantis' third generation of technology that is focused on providing a scalable design that is compact and with a high level of reuse. Our optimized, integrated 3-in-1 drive module assembly is scalable from 70 kilowatts all the way up to 330 kilowatts. The design has also been optimized to allow for flexibility in the drivelines to include a front-wheel drive option; rear-wheel drive option, all-wheel drive and of course, our patented, 4xe. Stellantis will utilize 3 different electric drive modules so that we can go all the way from the STLA Small up to the STLA Frame platform, covering all of our vehicles worldwide and sharing a high level of commonality and optimizing the overall cost with efficiency. A very important part of our strategy is to develop 1 power inverter for all 3 EDMs with scalable technology, a common microprocessor and in-house proprietary controls and software. It is based again on a specific approach to optimize costs, reduce complexity and improve our development efficiency for faster market. This inverter will run at both 400 and 800 volts and has phased current capability from 350 to 750 amps to deliver up to 350 kilowatts of power. The heart of this inverter is the power device. We will employ a selectable power device that is either silicon-based or silicon carbide-based, the most advanced wideband gap semiconductors that are better suited to efficiently handling the electric loads, switching rates and other performance capabilities to best control energy consumption on the vehicle. This degree of interchangeability and flexibility allows us to go from very cost-effective to extreme high-performance vehicles. Underneath all of this hardware will be our Stellantis in-house control and software, with brand-unique calibrations to capture the essence and the nature of each brand, as we said at the beginning. With these 3 EDM families, we now have a complete solution for every 1 of our platforms worldwide, all of our brands, a solution that's focused on performance and cost, ensuring the highest level of flexibility and efficiency. And we will use our global manufacturing footprint to produce drive units locally. Europe will be supplied by NPe, our joint venture with Nidec. In North America and China, production will be a combination of inside of our Stellantis manufacturing plants and with our strategic partners. As you've seen, we have adopted an uncompromised, customer-centric approach and development of our electric drive modules, which will allow us to meet all the customer expectations at the best level performance, and all of this in the most affordable and cost-effective way. And now I will hand it back to Paul.

A 3-family solution that's focused on performance, ensuring the highest level of flexibility and efficiency. Thank you, Micky. Obviously, at the heart of customers' concerns for the electric vehicle is the battery. Can you make it last longer, please? And maybe the central question is, what can Stellantis offer that the others can't? Please welcome Jean Personnaz.

Hi, Paul. Hi, everyone. To serve all its customers, Stellantis is developing, from 2024, a dual chemistry strategy based on 2 different operating points with a high level of synergies in between, nickel, cobalt free on one hand, without any raw material concern, offering a low and stable cost, 20% lower than the nickel based with, nevertheless, optimizing energy density between 400 and 500 water per liter at cell level, enhanced with the cell-to-pack installation. Nickel based, on the other hand, with the high gas energy density between 600 and 700 water per liter at cell level, one unique module-based design for all our platforms and further improvement by 2026 with the cell-to-pack installation. Those 2 chemistries are several points in common, same process, similar and active material, separator, electrolyte, aluminum foils, copper foils. And from 2026, we will use the same cell-to-pack installation by design, where we'll be able to be upgraded depending on our customer needs, cost reduction, energy density improvement or charging speed increase. And 2026 will be also the time to introduce the first competitive solid-state battery by reusing our industrial assets. I mean most of the sales manufacturing equipment pack assembly line because we have considered the solid state in our decisions from the beginning. We work on each and every items on vertical integration from the pack down to the cells to get all the benefits from the chemistry active materials that are so useful and precious. Our partnership with Total/Saft, the JV ACC, automotive sales company, and sustainable businesses with the most competitive sales supplier allow us to save more than 40% cost in 2024 versus 2020 at module level, module simplification, cell size increase and chemistry upgrade. On the battery pack, Stellantis is using its knowledge in mass production to propose a very simple 1-layer concept deployed on all our new platforms from 2024, with more than 40% saving compared to 2020. And last but not least, the battery management system features have been designed using our experience in complex system to maximize the useful energy in real life, pushing the depth of discharge limits while controlling the hedging, enhancing the voltage measurement accuracy and cell-balancing strategy. Thanks to that, for a given embedded energy that we buy, we increase the usable energy by 4%. We are competitors. And as competitors, we need to know where the others are, where they will be in the coming years versus our own position as far as energy density and costs are concerned. We precisely know the current situation. And following the announcement, the suppliers on maps they are working with, it is possible to quite well forecast where the major competitors will be, and so where we'll be the head of the race in 2024 and 2026. Based on all the improvements we are currently implementing on our dual-chemistry strategy towards 2024, energy density increase for the nickel cobalt-free chemistry, cost reduction for the nickel-based chemistry, we expect to be ahead of the race in 2024. For 2026, we will adopt the same cell-to-pack installation without modules anymore for the 2 chemistries and further improve by 15% the chemistry, energy density itself to stay ahead of this race. On top of that, the introduction of the first competitive solid-state battery in 2026 will bring a decisive advantage. So the plan is defined with our partners. This is now all about execution, and you know, with Stellantis' execution, this is our passion.

Thank you, Jean. Execution is our passion, I love to hear that.

Thank you, Paul.

So what is key here is thanks to an aggressive innovation policy and dual-chemical battery strategy, we will be a frontrunner by 2024. And with solid state and a powerful software strategy, we will lead the market. But if we want to deliver on sustainability promises, we have to have a comprehensive and in-depth strategy for another major factor, which is charging times and availability and battery life cycle. So let's talk ecosystems that really serve sustainability. And to give us an overview of the subject, please welcome, Alexandre Guignard.

Hi, Paul. What we want to share with you now is how we take care of our customers with our global ecosystem management to remove any worries and do it in a sustainable way. The first concern is the charging. We want to make it easy with the best customer experiences, easy private charging, easy public charging for B2C and for B2B usages. The second question is the battery life cycle. We want to manage the whole battery life cycle in a full circular economy strategy. It means a battery life span for automotive use. It means the second life of the batteries, and at the end, recycling. And last but not the least, in our quality, we want to guarantee the availability of our EV products for our customers. It means securing the batteries and the raw material supply. So let's sit together how we're going to manage those priorities.

Thank you, Alexandre, and we'll see you later to talk about battery reuse. Thank you. So one of the major concerns we have mentioned for our customers is charging. So here to tell us about charging services, please welcome Brigitte Courtehoux. Hi, Brigitte.

Hi, Paul. How are you?

I'm good. How are you?

Good. Thanks.

So I think we're going to have to start with the main pain point for customers. I realized that during this transition phase, things are changing very quickly. But still, the main -- or one of the main pain points for customers is charging. So how does Stellantis hope to tackle this issue?

You know, Paul, that we are developing a strong strategy to support our customers. We are here for our customers. So we offer a 360-degrees offer for both our private and B2B customers. So it's an end-to-end customer providing wallbox, installation, charging stations. And on top of that, we provide a day-to-day smart charging offer, which is a bundle. As a customer, when you want to buy an EV car, you also have a bundle of wallbox, the installation, the home green energy and the charging solution when you're out of home. And it's a peace of mind for the customer.

But is this something that you buy as a bundle? Or can you customize it? Can you change things?

In fact, we customize some of our solution. For instance, when our customers need us to tailor-made some solution, we are there for them. So we partnership with third parties. For the example, we have done one partnership between Jeep and Electrify America with solar-charging station in America.

I saw that. It's very impressive. Cars are coming through with solar charging.

Yes. It's wonderful.

Yes. So I'm thinking about the future because I can see that you're answering customer needs for today, but what kind of new technologies are coming up that are going to answer future needs?

Yes. We want to be at the cutting edge of the future of the smart grid. So we innovate in the GI technology. Why? In order to really well integrate EV cars into the smart grid. So we already have a pilot in Italy. We are also doing agreements, and we have done agreements with big B2B customers in order to start by 2022, in the field, those kind of solution. But more than that, we also intend to launch the largest fast-charging network in South Europe first, and we will deploy the rest of Europe after. And what do we do? In fact, we are partnering with [ NGOPS ]. [ NGOPS ] is one of our big partner. So as Free2Move eSolution, we design, produce and deliver the fast charging, and [ NGOPS ] will develop the network and invest in the network. This is new. And this is also -- on top of that, we also -- with those fast-charging stations, it's new, so world premiere. This is with storage energy, and it's plugged with the grid. So smart grid will be there also.

I think there can be a lot of people very interested in that. But it's in Southern Europe, right? So that's where it's going to start. So what's the strategy for geographical development after that?

All our solutions. So we have started all our solution, our 360-degree solution in Europe. And we intend to launch in Americas, in North America first and in Latin America.

Great. Well, thank you very much, Brigitte.

Thank you, Paul.

So we're now going to move on to another subject, take a quick dive into something that I think people haven't thought enough about, which is battery reuse and battery repair. So please welcome, Alexandre Guignard.

Let's see now the battery life cycle. Our strategy is to manage a sustainable battery life cycle within a global secular economy strategy. Our first concern is to ensure the customer satisfaction. The battery must last as long as the vehicle life span and beyond the guarantee period. And to do that, we are able to monitor, by software management, the state of health of a battery, and if necessary, to provide unique services to our customer to maintain the performance above 70%. Thanks to the e-repair center in each and every country where we operate, 21 centers up and running by end of the year, including Japan and Korea. And for deeper or longer operation, what we call remanufacturing, we have the battery expertise center. The first one is operating in Rüsselsheim, it's scalable and reputable. Then when the battery level of performances is not sufficient anymore for vehicle usage, the battery can be reused for a second life, our energy storage capacity. Our JV, Free2Move eSolution is a dedicated entity to commercialize different kinds of products based on second life as key mobility charging station or third-party storage in some buildings and condominium. The repurposing is integrated in our battery expertise centers. And ultimately, once batteries are no more suitable anymore for automotive or for second life, they are recycled with qualified partners. But with the volume growth, on the battery per year today, 5,000 by '24 and above 500,000 by 2045 for Europe only, and with a new recycling technology for raw material extraction between 90% to 99% recycling of different raw materials, we are going to integrate for recycling through a new partnership in our Stellantis footprint in Europe, then in North America. The extracted raw materials will be used to remanufacture new batteries and close the loop of battery life cycle and reduce deeply the cost, logistic, prioritization of raw materials. That battery life-cycle management is the core of our circular economic business model and contributes to the sustainability of our EV products.

Thank you very much, Alexandre. So now we're going to see how that remanufacturing works out in practice at the battery expertise center in Rüsselsheim. Video. [Presentation]

So thank you, Alexandre, and thank you, Rüsselsheim, the research center there. As Alexandre mentioned, mastering the battery life cycle is also about supply chain continuity and access to raw materials. So please welcome, Michelle Wen. Hi, Michelle.

Hi, Paul.

So the first question is really about your strategy in terms of -- from a purchasing standpoint in terms of securing battery availability in order to meet your customers' demands.

Well, I propose that we first have a look at the medium-term horizon. From a purchasing strategy standpoint, Stellantis is applying a multi-sourcing strategy at platform and module technology level. By doing so, we are making sure that we guarantee the best competitiveness and the total landed cost and the higher agility to react to the flexible customer demands. In 2025, we will contract a minimum 130-gigawatt hour, of which 80-gigawatt hour for European needs through our ACC joint ventures, investments in Douvrin, SOP plant in 2023; and in Kaiserslautern, SOP plant in 2025; as well as thanks to our best Asian battery partners such as CATL, BYD, SVOLT, Samsung and LG. In North America, we will secure 50-gigawatt hour in partnership with a major battery partner, which -- with whom we are in final step of contracting. And so in total of 3 giga -- of factories established in Europe and North America.

So moving forward, what would be your outlook for 2030?

Well, now looking into 2030, our customer demand will represent a minimum 20x more gigawatt hour compared to 2021. Our strategic direction is to secure a minimum of 260-gigawatt hour of capacities. This means that in 2030, in North America, a minimum of 90-gigawatt hour available capacities through the continuation of our partnership, which we have already established in 2025, and also potentially a second partnership, including the possibility of establishing an ACC plant in North America. And in Europe, a minimum of 170 gigawatt hour available capacities through extended collaboration with ACC, minimum 50% of our needs targeted in 2030 to be expanded by increasing size of production blocks and by establishing a new plant, for example, in Italy, and on top of the existing 2 giga factories, Douvrin and Kaiserslautern, which will already be operating in 2025; and the sourcing partnerships with our best Asian suppliers, including localizing their production in Europe. So at the end of the day, this means a minimum of 5 giga factories established in Europe and in North America. So you can see that we have a clear strategic direction for 2025. And for 2030, we could summarize in 1 slide.

I love it when we summarize everything all on 1 slide because you can see in one glance, a very clear road map for the future. So thank you, Michelle. But what about the raw materials that are used to manufacture the high-voltage batteries, which is another key issue? What's your strategy to secure them?

You are right. We don't just stop there. Not only we are guaranteeing our customer demands, growth through capacity investment, but we are also securing at our raw material availability and sustainability. In particular, we have identified lithium as the most critical raw material with regards to availability, and we have taken 2 upstream value trend initiatives by signing 2 MOUs for new direct offtake of lithium with lithium geothermal partners in North America and in Europe. And indeed, our tier 1 battery suppliers have also contracted the raw material supply in Europe. On the longer term, Stellantis also prepares to set up offtake agreements of recycled raw material with raw material recyclers. As I have mentioned, the importance of sustainability for Stellantis, and after having audited our current suppliers with regards to the cobalt supply, we are extending our partnership with third-party external agency to run the same evaluation on lithium, nickel and the graphite.

Wow. Well, thank you very much, Michelle. Very clear. Thank you.

Thank you.

So now we get to the part where you, investors and financial analysts and media, have all been waiting for, the financials. To discover the precise figures on electrification, please welcome the CFO of Stellantis, Richard Palmer.

Thank you, Paul. Good afternoon and good morning to everybody. Over the past 1.5 hours, my colleagues have provided you with a holistic view of Stellantis' electrification road map. I will now provide an overview of the key financial implications of this exciting strategy. As we have previously stated, we intend to become an LEV market leader. And as a first step, we are targeting to increase our global LEV sales in 2021 to more than 400,000 units, a threefold increase over our 2020 LEV sales. Then through 2030, we plan to steadily grow our LEV mix for passenger cars in Europe from our forecast [ 14% ] in 2021 to over 70% in 2030. The target is to be 10 percentage points ahead of current industry assumptions for the overall market mix by 2030. In parallel to our strategy in Europe, we intend to quickly ramp up our U.S. LEV mix for passenger cars and light-duty trucks from 4% in 2021 to exceed market LEV forecast by 2025 at 30% and proceeding up to over 40% by 2030. This LEV sales mix will be accomplished by the introduction of electrified options across substantially all nameplates by 2025 in both Europe and the U.S., with all nameplates offering a battery electric option by 2029 in the U.S. and by 2030 in Europe. As we explained today, by leveraging a wide range of brands, we will offer electrified options across all price points in the market and we'll meet consumers' requirements with best-in-class driving ranges and capabilities. By 2025, we plan to have 55 LEV vehicles across our European and U.S. passenger vehicle portfolios, of which 40 in a BEV version and 15 in a PHEV version. And it is important to note that since we are the market leader in the LCV segment in Europe, we will also have full battery electric vehicle offerings across all 3 LCV segments, that is small, medium and large brands, by the end of 2021. To execute on this transition to new technologies, we expect to invest more than EUR 30 billion in electrification and software development between 2021 and 2025, including equity investments in our various joint venture partnerships. We currently have, or are completing, 6 key technology joint ventures ranging from e-powertrain and e-transmission operations to battery cell chemistry and production and digital cockpit and personalized connected services. We believe these partnerships provide us the opportunity to leverage not only our in-house competencies, but also the expertise of our partners in order to bring new technology and solutions to market more rapidly, while optimizing capital allocation to further enhance our competitiveness in the marketplace. At Stellantis, we want to invest at the highest level of efficiency. To demonstrate that commitment, we expect our overall R&D and CapEx spending over the next 5 years to continue to be about 30% more efficient than the industry average based on percentage of spend versus revenues. This means we will continue to be a leader in the industry in the efficient use of capital while also being a leading provider of affordable mobility on a global scale. Clearly, one of the challenges in this transition is to reduce the costs of the new technology supporting the low-emission powertrains. By 2024, we intend to reduce the battery pack costs for nickel-based batteries, our high-energy density offering, by more than 40% compared to 2020 levels and then further reduce the cost by more than 20% from 2024 to 2030. One of the key contributors to these cost savings is the competencies we will have access to through our ACC joint venture partnership with Total/Saft, together with partnership arrangements with other key suppliers. Leveraging these competencies, we are implementing cost-saving actions across all the aspects of the battery pack, including battery pack optimization, simplifying the format of the battery modules, increasing the battery cell size and upgrading the battery chemistry. To summarize the financial impacts of today's presentations, we are moving very quickly to an electrified world. Today, our margins on BEV sales in Europe are at similar levels to our internal combustion engine sales, but we have to recognize that they are supported by government incentives to customers designed to support the initial transition by consumers to these new technologies, and they are also concentrated in higher contented vehicle offerings. Looking forward, our financials will have negative impacts from our targeted increase in LEV mix due to the likely reduction or discontinuation of government incentives to customers, which will not immediately be offset by the reduction in the unit cost of the new technologies as we scale up their production volumes. Also, the increase in transaction prices necessary to offset technology costs, even if supported by reducing total cost of ownership, will potentially put downward pressure on market demand. However, in this key transition period, we are very confident that these impacts can be more than offset by the synergies we are already capturing from the formation of Stellantis, which we are confident will total EUR 5 billion plus by the end of 2024, and by the road map for the reduction in battery costs as well as continued optimization of other business areas such as distribution and production costs. Stellantis will also continue to work at reducing its breakeven point, driven by the target to continue to be the most capital-efficient OEM in the industry. And last but not least, the development of new revenue streams and business models, in particular, related to software and connected services, will be an important lever to increase our profitability over the coming years as well as the strong growth potential in regions like Middle East and Africa, China, Asia, and last but not least, in developing the Maserati brand. As a result, we are targeting to achieve a sustainable double-digit adjusted operating income margin in the midterm. We believe that this will make us a market leader in profitability in the provision of electrified mobility to customers on a global basis. Thank you, everybody.

Thank you very much, Richard. So now you should have a clear picture of the EV strategy. We've looked under the hood. You saw the figures, EUR 30 billion, puts Stellantis in a leading position in the industry, committed to deliver double-digit profitability with well-positioned offers in the U.S. and Europe and efficiency at the core. And if you have any questions, the Q&A session is coming up right after the next session. So please welcome back the CEO of Stellantis, Carlos Tavares, for the final words of today's presentation.

By now, I trust that you can appreciate the speed and the power with which Stellantis is moving forward on its electrification journey. We are excited as we love to compete. And we believe that at Stellantis, we have the scale, we have the technology skills, we have the competitive spirit and we have the financial sustainability to deliver. We understand that the safe, clean and affordable freedom of mobility represents a strong expectation of our societies. And we are committed to deliver on that matter. This electrification journey is possibly the most important break of our long-term plan. And we intend to come back to you in fall this year with the second fundamental break on software. We will keep Stellantis a 30% lead on the efficiency of our investments. And we will use our diversity to -- as a differentiator to better understand the world. In fact, powered by our diversity, we intend to lead the way the world moves. Thank you.

Thank you very much, Carlos. So before the Q&A, which is beginning in a very short moment, we have a video for you. Video. [Presentation]

It's time for our EV Day Q&A. Carlos and Richard are waiting for your questions, the CEO and CFO of Stellantis. So please go ahead.

[Operator Instructions] And the first question comes from the line of Horst Schneider from Bank of America.

Actually, I've got to say I would ask basically at least 5 questions, but I restrained myself, really, just 1 question here. So of course, [ explanation is understandable ] into the financial targets. For example, to you, Richard, maybe. When I look at the chart, and you showed the way from H2 '20 to 2026 as a double-digit operating margin, is that a straight line up? Or could we expect basically a bit in between what will trigger the debts? And then also to your announcement this morning that you exceed, basically, your H1 -- or your full year targets in H1. Is there any reason to believe that the H2 margin should be weaker than H1 because the volumes are going to increase? I think this environment for you is stronger than ever.

Before I give the floor to Richard, let me just make a comment on your question. I think that we will both agree on the fact that what we have been experiencing on the automotive industry over the last few years is quite chaotic, and the volatility of the market environment has been demonstrating a significant magnitude. What we are saying today is that we have gathered enough new initiatives, new ideas, significant amount of synergies to have enough confidence to tell you that we will be double-digit in the sustainable way from 2026. What we both ignore, you and us, is what is going to happen in the external world. That's, of course, the headwinds that we have been facing over the last few years. We don't know what is coming next, but statistically, other headwinds will come. This being said, we believe that we have enough tailwinds to face those headwinds. So we need to put that in perspective. It would be arrogant from our side to tell you that we know all of what is going to happen in terms of headwinds for the next years. But what is clear is that we have now significant tailwinds coming from inside of the organization to be confident to announce this to you. Richard, please?

Yes. Thanks, Carlos. I think, just to add to that, clearly, the 2 companies prior to the merger were both performing very strongly. And so the base businesses are functioning very well. And as Carlos said, we have a lot of opportunities with the synergies and the various business levers that we talked about in the presentation. So I think we feel good about the midterm target, but clearly, there will be volatility that we'll have to deal with.

The next question comes from the line of Thomas Besson from Kepler Cheuvreux.

I have 1 question as well, probably more for Carlos. I'd like to talk about the flexibility you have in this way to electrification. I mean you've mentioned the 70% share of electrified car in Europe. I'd like to think of it as it's lower than some of your peers. So you haven't said [ 122 ] to beat the previous one. But basically, there are a number of factors that could come against you, including, I don't know, the possible delay of solid-state battery, the access to raw materials or the number of charging points or utilities companies not doing their job extra, et cetera, et cetera. So I'd like you to just give us some indications about what flexibility you keep with your 4 dedicated platforms, which I think keeps -- gives you see the possibility to have as well PHEVs or internal commercial engines and have a, let's say, agility still between BEVs that you need probably because of regulation and what you'll be effectively able to get because of reality in life.

That's a great question, Thomas. Thank you for asking that. Actually, what you are saying is, are we going to be able to execute such a strong strategy that we explained to you this afternoon? And it's fair to say that it's a significant amount of work. When we developed almost in parallel 4 brand-new BEV-focused platforms, the developments of all the electric motors and all the transmissions that go with that, the developments, the construction of new plants for battery cells and so forth, I think it's fair to say that there is an execution risk. But as we know, in our industry, it is a relative gain. So what you have to assess is the execution risk of Stellantis with what you know about our top executive team compared to other companies. But it is fair to say that this is an unprecedented transition for the industry in a very compact time window with a significant magnitude of change. This is fair, absolutely, and I support your statement. But I have also a bigger level of confidence and trust on my team on their ability to deliver. But there is an execution risk, which I don't believe is higher for Stellantis than for any other car company. I believe, actually, that our past is telling us that this execution risk is lower for Stellantis. Then you made another very good point about the LEV mix of sales. What is important at this stage is for you to understand that we are going to execute a strategy that will lead us to have a near 100% of electrified models by 2025. That is the execution part. The execution part is we bring the platforms, we bring the models, we bring the technology and the technology works. And with that road map, we achieve 100% -- near 100% of electrified models by 2025. That's the execution part. That's the offer part. From there, you have exactly what you said, which is the LEV sales mix that we forecast in 2030 as being above 70% in Europe. It's a forecast. It's a forecast of sales mix based on the fact that, from 2025, we will be almost 100% electrified models in our brand portfolio. So we will deliver on the offer side. And then we will see, both of us, if the market conditions, density of the charging network incentives from the states, any other convenience that would come to facilitate the usage of those products is going to accelerate or constitute a headwind against those numbers. But we need to, somewhere, break down the offer. We are committing on the fact that we bring our electrified models to almost 100% by 2025. That's the offer. That's the execution part of the strategy, and then the sales mix will grow in function of the performance of our products. And we are very confident that we are in a very competitive strategy, where, each time we launch a new platform, it's because we believe that it is going to be more competitive against the other carmakers and, of course, the overall external environment, which will support more or less this trend. But given the society challenge to fix the global warming issue, I believe that the support will be there in a way or another. And because of that support, I think that our forecast is a fair one. Now everybody can have a little bit more optimism, a little bit more pessimism, that's up to you to consider.

The next question comes from the line of George Galliers from Goldman Sachs.

I wanted to ask, fundamentally, given the high level of commonality on the batteries, powertrain and drivetrain across your brands, across regions and across the product portfolio, do you see the electrified battery -- electric vehicle world as having the potential to be structurally more profitable with higher returns on invested capital in outer years than the combustion engine world of the past?

That's a great question. I would like to hand over to Richard after I just make a comment on that one. I think the fair answer to what you are asking is to say that we don't see any reason why we would not be double digit. Now can we go further? I have no idea. As I said, we have some headwinds. They are clearly identified. They are about the speed at which we are going to reduce the cost of batteries. They are about the efficiency of our cost-reduction activities. They are about the significant amount of synergies that we see ahead of us. So many good things are now visible over the last 5 months of Stellantis' life. And those tailwinds are demonstrating that we feel confident that we'll be double digits from 2026. Now what will come next is very difficult to predict, but at least, the things that we need to overcome are clear. It's mostly about the cost of batteries. We have tons of ideas about the synergies on the design to manufacture, on the design to cost, on the distribution model, on the way we are going to monetize a certain number software-related services. And this is going to be explained in full. That's why I believe it is fair to come back to you on this matter. And all of those tailwinds will certainly compensate for the headwinds that we are seeing right now. Richard, please?

Yes. Thanks, Carlos. I'll just add to that. I think it's -- there's a massive discontinuity, which is clearly a risk but an opportunity. And if we can execute properly, we can drastically simplify our industrial footprint, I think, and potentially add more value-added activities around the vehicle to augment our revenue stream. So I think it's -- as always, it's about execution, but the opportunity exists.

The next question comes from the line of Philippe Houchois from Jefferies.

My question is probably more to Richard. You've given us a budget of EUR 30 billion over 5 years to pay for that transition. What I struggle with those numbers from your peers as well is how much of that amount is going to be showing up on your cash flow and balance sheet over the next 5 years? And how much is going to be if they get borne by some of your partners, whether it's on the battery side or the electric motors? So if you could split that EUR 30 billion, how much is on your balance sheet? How much is off your balance sheet in part? That will be very helpful to understand the cost of that transition for you and for others as well.

Well, thank you, Philippe. I think you're asking me to look in a crystal ball, to some extent. I think what we're saying is that we have -- clearly, we have the financial resources to execute on this transition. We are putting aside a substantial amount of our capital spending going forward. And that execution will be in various forms, but the number we're showing you is largely on our balance sheet, frankly. So we are trying to execute that within the framework of our spending levels of the past. So that one of the big challenges, clearly, is the execution and the execution within the framework of a similar level of spending to the past, which implies the level of efficiencies that we talked about in the presentation at 30% compared to the industry. And I think this management team have shown the ability to execute very well with relatively lower levels of capital expenditure. And so we are very focused on being very efficient. Whether the efficiency means that it's on-balance sheet or off-balance sheet, there will be choices to be made along the way. And clearly, we are sort of at the beginning of that process, to some extent. So we will keep you informed as we progress.

The point made by Richard is fundamental. It is also a differentiator. Right now, only Stellantis can enjoy, through the merger between FCA and PSA, the amount of synergies that we see ahead. We are in a specific moment of our life. We are 5 months in the life of Stellantis, and we see significant amount of synergies that is the consequence of this merger. And this situation is unique to Stellantis. It's a differentiator compared to the other competitors. A second differentiator, which is going to be maintained, is the fact that we have a 30% efficiency and effectiveness lead on every investment we do against our competitors. And this is a differentiator that we are going also to protect against our competitors. The third differentiator is the fact that we are a very diverse company, and we love that. This diversity inside of our company is giving us a perspective, which is very large in terms of internal benchmarking. It gives us also a very good understanding of the markets in which we operate because, as we are diverse as the world in which we operate, we want to leverage this diversity to understand our markets in a more efficient way. So you see on those 3 dimensions, we have 3 differentiating factors vis-à-vis our competitors.

The next question comes from the line of Peter Campbell from Financial Times.

Carlos, can I just ask about the EUR 30 billion? How much of that money has already been spent? Because some of the things we saw in terms of the platforms and various details of them look quite far advanced. Or is it all completely new from this year to '25? And can you also give us a sense of how much of the EUR 30 billion is going into EVs, and how much specifically into software? Because, obviously, it's EUR 30 billion for EVs and software.

Thank you, Pete, for your question. Let me answer simply. First of all, it's EUR 30 billion ahead for the next 5 years dedicated to electrification. And the part of software that you have on those EUR 30 billion is the one that is supporting electrification. Of course, there will be other software-related investments, which will not necessarily be linked to electrification. Those ones will be commented in full when we will make a Software Day with the whole of you, hopefully, to go deeper in that strategy. Because I believe that in our investors' interest right now, we have 2 major topics. One is electrification journey. The other one is software development. And we will come back to you in a little there. So for your question, what we have in the EUR 30 billion is the next 5 years and only the software part, which is related to electrification.

The next question comes from the line of Patrick Hummel from UBS.

It's Patrick from UBS. My question goes to Carlos, please. Regarding the launch pipeline, it's great to see you've embarked on this all-in EV strategy now. But I'm more interested in the next 2 to 3 years because you're clearly not the first to go all in. And it feels like the pipeline over the next couple of years could be a little bit light. So are you happy to share a number of BEV launches over the next 2 years or so? And if you can, with a little bit more color how that breaks down by region, specifically on China, we haven't heard much. And if I can just dive a little bit deeper into the pickup segment. All the competitors in the U.S. are going to come with product over the next 12 to 18 months, and your new best-in-class truck then in 2024. Isn't that a very long time in which you could miss out substantial market share in what is your cash cow #1 in your portfolio?

Thank you for those 2 questions. First of all, be aware that in 2021, we will be somewhere between more than 30 and less than 40 pure LEV cars on sale already today. I think you heard from Linda Jackson on the Peugeot brand that we are already selling a significant amount of LEV cars. I think she said 85% of sales are also already LEV-based. This is something that you need to understand. We are already in the race. This is not a standstill race. It's a rolling start. We are already there. And we see that our market share in the LEV market is growing by the day, and that is important. It's important that you understand that we are not on a standstill. We are on a rolling start, and we are now accelerating full power, full speed. So this number of available BEVs and PHEVs is going to grow, I would say, almost by the day. Already this year, more than 30 LEV-based products will be on sale. You can go through all the brands and all the brand portfolios to check that. But it's the reality that we enjoy, so we are just going to accelerate. And every time we decide a new investment on all of those 4 BEV-focused platforms, we make the decision based on our ability to beat the competition at the moment where we hit the ground with the new products. So of course, we predict, or try to predict, what is going to be the pace of progress of our competitors. And of course, we decide our own investments and our own specs based on where we see our competitors going in a very clear competitive mindset, which is to beat them when we hit the ground with the new products on those new platforms. So that's how we think about things. And we feel that we are exactly on the right timing with the right power. And by the way, thanks to the scale of Stellantis, we are now doing this race with the other carmakers, and we are just fine about it. And perhaps, you heard Linda Jackson saying that, right now, in Europe, the per-unit margins of the BEVs are at the same level as the ICs, which is a very important information that we are giving you here, which means that we are now moving in the good direction in terms of cost efficiency for this electrification. So that's where we are. And if we reach 98% or almost 100% of electrified models by 2025, it means that between now and that moment, you can consider that this is almost a linear growth of those electrified models. If you want to have detailed information, you just have to look at the slides that I presented at the Stellantis shareholders' meeting this year, where you have the exact ramp-up of the electrified models, both in Europe and the U.S. So we have the precise information, and you can track year by year that we are executing on our plan.

The next question comes from the line of Dorothee Cresswell from Exane.

I wondered whether you could update us on your U.S. emissions compliance. Could you tell us roughly when you expect to be self-compliant without the need to buy credits? And do you think you have enough credits stockpiled already that you can stop buying them from Tesla and other players within the next year or 2?

Thank you for your questions there. I will let Richard give you some of the details related to the financials on this matter. It is a very important matter. It's not only a financial matter. We see it as an ethical one. We consider that compliance is a must, which means compliance -- natural compliance by the competitiveness of our products. We are moving very, very fast because, as we have already stated, right now, in 2021, we are already fully compliant in Europe on the Stellantis approach, which means gathering all the brands coming from ex-FCA and ex-PSA. So we are already naturally compliant, thanks to the quality of our technologies. And we have already made a significant amount of progress in the U.S. And we will be naturally compliant very, very soon, but I will let Richard give you more details on the financials. Richard, please?

Thanks, Carlos. So in terms of credits, Dorothee, we basically have commitments on all the credits we need. And we will have our last cash out for payments for credits in 2022. So then, we basically [ merge ] in warehouse all the credits we need to get through the compliance process. And our compliance stance will start to significantly improve from 2023 onwards.

The next question comes from the line of José Asumendi from JPMorgan.

José at JPMorgan. I just want to come back again into the EUR 30 billion expenditure. So struggling a little bit to get to this figure, if I would divide it between the key components: battery, platform, e-motor transmission and software, am I sort of in the right track with the sort of maybe 40% share of this figure, the EUR 30 billion dedicated to battery? Or am I missing something in this split just to get to this EUR 30 billion overall?

Well, José, your question is spot on. And I would like to apologize as I don't want to give you the breakdown for a very simple reason. As we are leading by 30% on the efficiency of our investments vis-à-vis our peers, if I start giving you that kind of breakdown, then I will be giving too much competitive information to our peers, and I would like to avoid that. What I can tell you is that, while we spend those EUR 30 billion to support this transition in a competitive way, we ensure that we keep that 30% leading the efficiency and effectiveness of our investments. And this is, of course, a big differentiator of Stellantis vis-à-vis our peers. But it is also a way to tell you that, because of our scale, because of our sustainability in terms of financials, we can perfectly support this transition and be timely in the way we bring the new technologies to the market. So that's what makes us very confident, on the numbers that Richard commented to you, is that we have the capability to move forward, fast forward with the right magnitude and the right technologies. And each of those platforms, each of those battery packs, each of those chemistries will be highly competitive, either leading the pack or hitting the ground on the leading position because we already know where some of our competitors are going. And that's going to be a very intense, very competitive period, and we are looking forward to it.

The next question comes from the line of [ Koji Furukawa ] from MBK.

Am I quick in understanding that LEV defined as -- BEV's promising hybrids and few FCEVs.And on that basis, can you like tell us your mix of BEVs, but actually, it exists only for Europe, North America and the rest of the world in 2030. And what is your assumption of the zero-emission regulation in Europe in 2030? Yes, and how do you see the future of BEV rates?

You are right to ask that question. We should have been clear on that one. When we talk about LEVs, we mean PHEVs and pure BEVs. That's what we mean by LEVs in our own acronyms. On terms of -- in terms of breakdown by 2030, you can assume that there is no less than 80% mix of pure BEVs on this total amount of LEV sales. So it's a breakdown 80-20 by 2030. And it is -- LEV means pure BEV, PHEVs. In terms of regulations, as you know well, this -- there is going to be a significant announcement this month by the European Commission on what will be the more stringent targets that we will have to meet in 2030 in Europe. From everything I know, we have already anticipated that, and we are absolutely fine with what should be announced. This is something that we usually do is we anticipate the regulatory moves. And we try to make them even harsher than what they end up by being because we want to be ready for that kind of situation. So yes, it's going to be more stringent in 2030 against 2021. Yes, it's going to be a significant step of demand that will come. This is something we have already included in our strategy. And you can assume that everything we presented to you this afternoon already embarks that kind of demand. For everything else, we have to wait for other new regulations, which are still to be announced, namely the ban on ICE sales in Europe after 2030. We don't know exactly if it's going to be 2035 or 2040, we'll see. In any case, our electrification strategy will fit and support that in a proper way.

The next question comes from the line of Stephen Reitman from Societe Generale.

Question about the synergies again. Obviously, when the merger agreement was first announced at the end of 2019, the figure was below EUR 4 billion, and then it was actually updated to EUR 5 billion. Obviously, with the significant deceleration in electrification that you're planning in the next few years and the scale effects that's given you, could you share your thoughts about what the potential synergy improvement might even be beyond that EUR 5 billion? And you also mentioned, I think, today that you were ahead of your targets already for this year. So if you can maybe give some color on that as well.

I will hand over to Richard to give you a little bit more details on this one. What I can tell you is that, indeed, when we started working at Stellantis, we have seen that the creativity of our teams to come up with very, very smart solutions is very, very high. I'm not surprised -- when I saw the talent of the people coming from FCA as much as from PSA, I'm not surprised by the fact that they are finding, by the day, very, very smart things to be decided and executed. So yes, we are, we are confident, and we are seeing things which look very, very promising. At the same time, as you know, reporting on synergies, which, of course, we will do for the first few years, is not the best way to assess how we are moving forward. The best way to assess that is to measure the adjusted operating margin of the company. That's where you can see the impact, the positive impact of implementing the synergies. It is fair to say that 5 years down the road, it is going to be difficult to imagine what would be life without Stellantis. The more we move forward, the more, of course, this comparison between the stand-alone situation and a merged situation is going to be difficult. And therefore, what we want to say is that, of course, we will report on the synergies. Of course, we are very confident. And we see that the bottom-up stream is stronger than what we expected. And at the same time, I think the reality of the benefit of those synergies is visible in what we present this afternoon, which is to say, from 2026, we believe we will be in a sustainable double-digit adjusted operating margin area. And that's where we are today, but let me hand over to Richard for more details on the synergies.

I don't think I have much to add, Carlos. I think the only point, Stephen, as you said, EUR 5 billion-plus was the target. I think after 5 months, it would be a bit early to start giving you a new number. But I think we're seeing a lot of opportunity, and we're very confident. And we also said that we would be cash positive for the year in 2021. And we can confirm that, and we will give you more details when we report the H1 numbers.

The next question comes from the line of Martino De Ambroggi from Equita.

In one of your initial remarks, someone mentioned that Peugeot already has a similar profitability for electric and ICE cars. My question is, what are the conditions allowing such a performance? Is it just a matter of fiscal incentives? And what are the condition on when do you plan to achieve a similar result for the whole group and not only for the Peugeot brand?

That's a very important question. Thank you for raising that. It is absolutely clear, I think Richard mentioned this, that we are currently benefiting from the fact that there are subsidies, which are allowing our customers to buy electric vehicles at a reasonable price. And indeed, we are protecting our margins. And what we see is that those margins are also supported by the fact that we are making those products more affordable to the final customer because of the subsidies. So our job now is to maintain our profitability or even enhance it. While we believe the subsidies will progressively disappear, we need to compensate the -- that negative trend in terms of subsidies by more cost reduction inside of our company, and this is exactly what we intend to do. And this is the reason why we have such a differentiating situation for Stellantis because we have a huge amount of synergies that is going to help a lot on this direction. So while the subsidies will disappear, we will enhance our cost reduction by bringing all of those synergies in the execution mode. And by doing that, we believe that we are able to protect our margins, while making those products affordable for our customers and protecting the size of our customer base. So as the technology path is common to all the brands of Stellantis, all the 14 brands of Stellantis can enjoy the same technology components, electrified components. They are all there. The platforms, the motors, the batteries, the softwares, all of this is on the shelf for all the 14 brands to enjoy. And it is now the vision of the brand CEOs that presented to you some of the brands to build their own road map using those available technologies to improve their midterm plan business. And this is exactly what they are doing. And I can tell you that you will be surprised by some of our results. We are very confident that our brands are going to use those components to make a very profitable double-digit operating margin for an electrified business model. That's where we are today. I don't know if you want to add something, Richard, on this matter.

No, I think you covered it, Carlos. Thank you.

The next question comes from the line of Charles Coldicott from Redburn.

I wanted to ask about China. So I think your slides on battery demand seem to imply that all of your global battery needs will be in the U.S. and Europe. So how should we interpret what that means for Stellantis' ambitions in China?

Quite simply, as you know, currently, we are making red ink in China. So the 2 engines of Stellantis -- the 2 big engines are North America and U.S., of course, and Europe, as you may imagine. So North America and Europe are the 2 profit pillars of the company, and this is why, today, we put the focus on those 2 major pillars. We have some work to do in China to get rid of the red ink. It is in the process right now. And because those negotiations are ongoing, I don't want today to unveil things which are not finalized, but we are doing that. We are doing our homeworks to come back to you when we will present the long-term strategic plan of Stellantis. We'll present to you the strategy for China. And we are, right now, starting with the first step, which is to get rid of the red ink. And as the profitability of the company is mostly done by North America and by Europe, we are presenting to you the sourcing plan for batteries for those major pillars. Of course, we can give you more details when we will present the long-term strategic plan worldwide for Stellantis. At this stage, we put the focus on those 2 ones. And if you ask me, "What are you doing in China?" My answer is I'm getting rid of my red ink, and I'm preparing for a complete new business model that I will be happy to present to you when we'll present the Stellantis long-term strategic plan.

The next question comes from the line of Henning Cosman from HSBC.

I just had a clarification around your full year guidance, which you haven't changed, notwithstanding that you said you have over 50 range in the first half. So I just wanted to clarify if you deliberately want us to think that H2 will be below H1, or if you just felt that it wasn't the time to change the guidance? So that's the first part of the question. And if you don't mind, I'm going to try you again on the trajectory of profitability through to 2025. Is it possible at all to -- notwithstanding the macro factors that Carlos mentioned, right? Like you said, you and us, we're ignoring that a little bit. Everything else equal, would you expect the margin to get worse before it gets better through to 2025?

Well, that's a very smart question. And as I'm not smart enough to answer it, I'm going to hand over to my friend, Richard. Richard, please?

Well, along the easier question, Henning, on the guidance, we -- it doesn't implicitly mean we think H2 is going to be worse than H1. It just means we'll update you on how we see the full year when we do our announcement of our H1 earnings. On the trajectory, honestly, I don't really want to change the answer we gave. I think we clearly had a -- an 89% margin performance, in the aggregate, of the 2 companies in the second half of 2020, which I think is a useful reference. We will show you the numbers for the first half presently, but I don't think you'll be disappointed. And frankly, we see the business performing very well. But clearly, this transition will be an arduous process with a lot of execution to be performed. And so I don't really want to get drawn into giving you guidance for 2022 in advance. So I think we'll keep you updated along the way.

The next question comes from the line of Stephen Walmart from the Wall Street Journal.

So a slightly related question, I just wanted to hear a bit more about the other side of the coin from the electrification so on the shrinking ICE portfolio, and it's winding down the assets. It can't be repurposed. I know you want to repurpose it as much as possible, but it's winding down the assets. That can't be repurposed in a straightforward process. And I guess, related to that, does that EUR 30 billion imply that your capital spending is going to increase over the coming years relative to the pre-merger levels of FCA and PSA? Or on a net basis, will it actually be fairly steady?

It's a very fair question. Let me give you some hints. We believe that we should be around 80% of turnover in R&D and CapEx, overall. So you can calculate the magnitude that this represents, and you'll see that it's much bigger than 1/5 of EUR 30 billion. And that means that we have other investments. Related to ICE, we have been preparing for this for a few years now. And we have been making very wise investments, including, in some cases, under investing in anticipation of what we are now seeing in terms of moving towards a clear milestone where there will be a ban on the ICE sales, at least, in Europe. So we were anticipating that, and we are making sure that we wind down progressively those productions. And as I have told you today, we already have 3 powertrain plants that we are transforming to make them become a gigafactory for battery cells. So we already have 3 in Europe, that's what I told you in the opening comments. And we are going to announce at one point in time exactly what we are preparing for in North America, and it's also quite exciting. And that's the way things are now moving. We are transforming part of our existing powertrain manufacturing system in order to be able, of course, to take care of our people. That's obvious. It is our responsibility, but also to make sure that we are wisely reducing our investments for that refurbishing so that we can use part of our assets for those new activities. So we are in this efficiency and effectiveness approach by creating those gigafactories out of the existing powertrain plants, taking care of our people, limiting the cash-outs and investments and reusing everything we can reuse in terms of existing assets. That's exactly what we are doing now. But you will calculate that compared to 80% R&D and CapEx against turnover rate, if you calculate that number for 5 years and you compare to EUR 30 billion, you'll see that the number is much, much bigger.

The last question comes from the line of Tom Narayan from RBC.

It's Tom Narayan, RBC. A follow-up on the plug-in hybrid question from before, and I appreciate the pivot being made here to 80% BEVs by 2030 in Europe in terms of LEVs. But curious, why not go closer to 100% BEVs there? Similar to just what some of your peers have done, I think Renault said something similar last week. Am I just splitting hairs here? Or are you guys making a call on plug-in hybrid saying, "There's still a role for this powertrain by 2030 in Europe, especially with potential bans coming on the horizon where plug-in hybrids may be considered ICEs in some ways"?

It's a great question, and please do not look for understatements on this forecast. What we are saying is that we will be at near 100% of electrified models by 2025. So the electrified offer will be there by 2025. And from there, the mix of sales is more the result of the external environment of the company, for instance, density of the charging network; for instance, subsidies, existing subsidies; for instance, easy convenience on the way you use those vehicles in some urban areas. So the mix of LEV cells is more a function of the external environment than a function of the offer. The offer will be there, and it will be 100% LEV so we will able to compete. And then the external conditions of the market will dictate what the sales mix should be. Of course, we also think that, somewhere, PHEV will still have some kind of attractiveness for some of our customers. So we intend to continue to use PHEV, but not to the detriment of the full power that we put in our BEV-dedicated platforms. It's important that we take the best out of the optimization of a pure BEV mobility world, and this is exactly what we are doing. This is exactly what we explained to you today. So there is no understatement on this 70%-plus number. Anybody can say a number because it's just a forecast. What is important is the offer. What is important is do we bring the electrified models to the market? And we bring near 100% in '25, so we are perfectly in the right timing to race.

Well, thank you. Thank you very much, Carlos and Richard, for answering all those questions. And that brings us to the end of EV Day 2021. So I hope you all enjoyed it. If you didn't get to see all the presentations, then you still have the replay option, so please make use of it. So goodbye, see you soon, stay safe. Thank you very much for your attention.