Stellantis Drafts Sustainable Strategy for North America

Stellantis outlined details of a business unit that is central to the automaker’s goal of becoming carbon net-zero by 2038.

Internally, the company – parent to Jeep, Dodge, Chrysler, Maserati, Peugeot, Fiat, Opel and more – says the unit, dedicated to recycling and reuse, can generate $2 billion in revenues by 2030. That would be an improvement from more than $500 million it reported last year from similar efforts.

Stellantis is playing catch-up on sustainability and showing the world that it takes climate change and its environmental responsibility seriously. Under the previous management of Sergio Marchionne before Fiat Chrysler’s merger with PSA Group, the company did not invest much in electric vehicles or sustainable policies. Additionally, the automaker five months ago pleaded guilty to concealing true emissions of its diesel engines in the U.S., agreeing to pay $300 million to settle criminal fraud allegations.

Stellantis announced the new business unit last March as part of a broader strategic plan, called Dare Forward 2030. A plan has to have a name, and the company calls this one “4Rs” for Remanufacture, Repair, Reuse, Recycle.

Alison Jones, senior vice president of the global circular economy unit, says the $2 billion will be an annual return that the company will track and report, but will not be a line item on financial results because the savings will be reinvested in operations as they become available. Jones says there is an emphasis in every operating unit and brand group to design, engineer and procure parts and raw materials that have a high degree of recycled content and/or recyclability.

This approach, which is being done by every automaker to different degrees, faces internal challenges, however. Privately, sustainability executives within the industry say the biggest challenge can be their own purchasing departments. That’s because some of the most innovative products, materials, etc., are being developed and brought to market by small companies and start-ups. And processes to certify new suppliers can be a great deal of work that procurement departments often discourage.

“Putting a system in place that is dedicated to bringing everyone along is key,” says Jones. She notes Stellantis also has a $300 million new venture fund to help foster those opportunities. “We know that some of the most interesting things going on today are being done by entrepreneurs.”

Repair in the context of a Circular Economy refers to fixing parts to put back into vehicles. Reconditioning parts can be used for repairing vehicles. Stellantis has 21 “e-repair” centers for repairing and refurbishing electric vehicles. Tools that include software to identify bad or faulty cells in batteries enable those cells to be replaced, and the battery re-used to finish its planned lifecycle.

The new business unit encompasses Stellantis’s North American operations including Canada and Mexico. The company already has a unit for reconditioning parts in Europe called Aramis.

Jones says the company has 4.5 million parts in inventory sold in 155 countries through its existing B-Parts e-commerce unit.

Stellantis will use a new “SUSTAINera” label to denote parts that are offered as part of its “Circular Economy” platform. “The SUSTAINera label represents our promise to provide sustainable, transparent and affordable products and services to our customers for all brands of vehicles, without compromising quality, while preserving the environment through decreased waste and less use of our planet’s resources,” says Jones.

As part of the effort, Stellantis is setting up hubs and local outlets based on regional needs. The automaker’s Mirafiori, Italy complex, for example, opens in 2023 as a circular economy hub, and is a model for the North American plan. Local outlets will open in an array of countries and states, with the number and location based on the volume of business in those regions. An example offered by Stellantis is a facility in Brazil where starter motors, alternators and more are remanufactured and sold across more than 1,000 dealerships and repair shops.

Stellantis plans to have its “4R” strategy operating across North America by 2030.