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China's Great Wall confirms its interest — in Jeep, or all of FCA

HONG KONG/SHANGHAI — Chinese automaker Great Wall Motor reiterated its interest in Fiat Chrysler Automobiles NV on Tuesday, but said it had not held talks or signed a deal with executives at the Italian-American automaker. China's largest sport utility vehicle manufacturer made a direct overture to Fiat Chrysler on Monday, with an official saying the company was interested in all or part of FCA, owner of the Jeep and Ram truck brands. Automotive News first reported the news, quoting Great Wall Motor President Wang Fengying as saying she planned to contact FCA to discuss acquiring the Jeep brand specifically. Those comments sent FCA shares higher but also raised questions over the ability of China's seventh-largest automaker by sales to buy larger Western rival FCA, or even Jeep, which some analysts value at as much as one-and-a-half times FCA. Great Wall sought to dampen speculation on Tuesday. It confirmed it had studied Fiat Chrysler, but said there was "no concrete progress so far" and "substantial uncertainty" over whether it would eventually bid. "The company has not built any relationship with the directors of FCA nor has the company entered into any discussion or signed any agreements with any officer of FCA so far," the company said in an English-language stock exchange filing. It did not give further detail. Fiat Chrysler stock dipped on the statement on Tuesday. Great Wall said trading in its Shanghai-listed shares would resume on Wednesday after having been suspended. Fiat Chrysler declined to comment on Great Wall's statement. On Monday, it said it had not been approached and was fully committed to implementing its current business plan. FLUSHING OUT RIVALS? Great Wall Motor, which was early to spot China's love of SUVs, had revenue of $14.8 billion last year and sold 1.07 million vehicles - but that compares with FCA's 2016 revenue of 111 billion euros ($130.6 billion). Analysts said Great Wall would need to raise both debt and equity to complete any deal, meaning its chairman Wei Jianjun could lose majority control. One possible scenario, according to analysts at Jefferies, would see Wei keeping a roughly 30 percent stake, while Great Wall would raise $10-$14 billion in debt and $10 billion in equity - hefty for a group currently worth just $16 billion. Ultimately, politics could be the clincher.

Stellantis reports record margins, $7B profits despite chip shortage

MILAN — Automaker Stellantis on Tuesday said it achieved faster-than-expected progress on synergies and record margins in its first six months as a combined company, despite suffering 700,000 units in lower production due to interruptions in the semiconductor supply chain. The company — formed from French carmaker Peugeot PSAÂ’s takeover of the Italian-American company Fiat Chrysler — reported net profit of 5.9 billion euros ($7 billion) in the first half of 2021, compared with a loss 813 million euros during the same period a year earlier, which was impacted by the coronavirus restrictions around the globe. Shipments rose 44% to 3.2 million units, while revenues rose 46% to 75 billion euros. “We are very pleased with the speed with which the new team has begun to execute as one company, as Stellantis,Â’Â’ Chief Financial Officer Richard Palmer told reporters. Semiconductor shortages accounted for 200,000 units of production losses in the first quarter and 500,000 in the second quarter. Semiconductors are used more than ever before in new vehicles with electronic features such as Bluetooth connectivity and driver assist, navigation and hybrid electric systems. Stellantis achieved 1.3 billion euros in cost savings in the first half, mostly by sharing investments in new technologies and platforms, which Palmer said was a faster rate than initially forecast. It aims to achieve 80% of the targeted 5 billion in cost savings by 2024. “These synergies allow us to continue to invest in the electrification strategy, which we talk about every day,” Palmer said. Stellantis, which lags competitors in rolling out electric vehicles, plans to launch 21 fully electric or plug-in gas electric hybrid vehicles over the next two years. North American posted record profitability on global sales of Ram trucks and the strong launch of the Jeep Wrangler 4xe, which was the best-selling plug-in gas electric vehicle in the United States in the second quarter. Stellantis was the market leader in South America and second in Europe. The results were presented on a pro-forma basis, taking into account the performance of each of the carmakers as separate entities during 2020. Related video: 2021 Jeep Wrangler Rubicon 392 Inside and Out

Stellantis invests more than $100 million in California lithium project

Stellantis said it would invest more than $100 million in California's Controlled Thermal Resources, its latest bet on the direct lithium extraction (DLE) sector amid the global hunt for new sources of the electric vehicle battery metal. The investment by the Chrysler and Jeep parent announced on Thursday comes as the green energy transition and U.S. Inflation Reduction Act have fueled concerns that supplies of lithium and other materials may fall short of strong demand forecasts. DLE technologies vary, but each aims to mechanically filter lithium from salty brine deposits and thus avoid the need for open pit mines or large evaporation ponds, the two most common but environmentally challenging ways to extract the battery metal. Stellantis, which has said half of its fleet will be electric by 2030, also agreed to nearly triple the amount of lithium it will buy from Controlled Thermal, boosting a previous order to 65,000 metric tons annually for at least 10 years, starting in 2027. "This is a significant investment and goes a long way toward developing this key project," Controlled Thermal CEO Rod Colwell said in an interview. The company plans to spend more than $1 billion to separate lithium from superhot geothermal brines extracted from beneath California's Salton Sea after flashing steam off those brines to spin turbines that will produce electricity starting next year. That renewable power is expected to cut the amount of carbon emitted during lithium production. Rival Berkshire Hathaway has struggled to produce lithium from the same area given large concentrations of silica in the brine that can form glass when cooled, clogging pipes. Colwell said a $65 million facility recently installed by Controlled Thermal can remove that silica and other unwanted metals. DLE equipment licensed from Koch Industries would then remove the lithium. "We're very happy with the equipment," he said. "We're going to deliver. There's just no doubt about it." Stellantis CEO Carlos Tavares called the Controlled Thermal partnership "an important step in our care for our customers and our planet as we work to provide clean, safe and affordable mobility." Both companies declined to provide the specific investment amount. Controlled Thermal aims to obtain final permits by October and start construction of a commercial lithium plant soon thereafter, Colwell said. Goldman Sachs is leading the search for additional debt and equity financing, he added.