As the world embraces electrification, automakers have two choices: be early to the market with a lineup that spans segments, or wait a few years, hoping buyers will catch up—but risk losing ground to startups and rivals. Unfortunately, Jeep and its parent company Stellantis chose the latter and now they’re scrambling to catch up. And both have very basic problems with their lineup of gas-powered cars that they should probably take care of first.
This kicks off the Friday edition of Critical Materials, your daily round-up of news and events shaping up the world of electric cars, software defined vehicles and autonomous tech.
Also on today's list: The Biden administration's 100% tariff on Chinese EV imports will go into effect later this month and Hyundai's potential collaboration with Toyota for development of future hydrogen models.
30%: Jeep Wants To Make A Comeback
Jeep's first pure electric model, the Wagoneer S mid-size crossover, will go on sale this fall. But it's been a long time coming. Over a decade into the EV transition and Jeep is offering a fully electric model in the U.S. only now. Sure, it offers PHEVs like the Wrangler 4xe and the Grand Cherokee 4xe, but it feels rather behind many other rivals who offer full EVs.
Regardless of the powertrain, electric or gas, Jeep’s lineup has been lagging, especially after the retirement of the entry-level Renegade and Cherokee last year. The result? Plummeting sales. Jeep sold just 643,000 vehicles in 2023, a sharp drop from nearly a million before the pandemic.
Moreover, electrification isn’t Jeep's only problem. The brand is glaringly absent from a critical gas car segment: the mid-size crossover. The Cherokee never got a replacement. The Compass is compact-ish and everything else in the lineup leans toward full-size SUVs. Skipping this key category is a major miss, especially if Jeep wants to stay competitive—and pay the bills for an electric transition.
All that is not just hurting the company, but also its vast dealer network and loyal customer base. Here's how the head of Stellantis' U.S. dealer council Kevin Farrish voiced his frustration this week in an open letter to CEO Carlos Tavares, as reported by Bloomberg:
The market share of your brands has been slashed nearly in half, Stellantis stock price is tumbling, plants are closing, layoffs are rampant, and key executives fleeing the company. Investor lawsuits, supplier lawsuits, strikes–the fallout is mounting. Your own distribution network, your dealer body, has been left in an anemic and diminished state.
But Jeep CEO Antonio Filosa isn't sitting quietly. He believes the automaker can still orchestrate a comeback.
As CNBC reported today, Filosa's plan is to reduce prices across line-up, mimic the price incentives that the rest of the industry is banking on to accelerate their EV sales and increase advertising and marketing spending. There's also a roadshow planned to address dealer concerns.
Luckily for Jeep, it can ride the wave of increasing hybrid sales and use that momentum to spotlight its upcoming fully electric models. That includes the Wagoneer S, the Recon, which is expected to be a Wrangler-inspired electric SUV, the $25,000 electric Renegade and an unnamed "mainstream UV."
Stellantis’ recent $406 million investment to retool its Michigan plants for EV production should also give Jeep the push it needs to realize its electric ambitions. The road ahead won’t be easy—it rarely is in the EV space—but Jeep has an opportunity now to finally get the ball rolling.
60%: Biden's EV Tariffs Go Into Effect This Month (Again) (Maybe)
After several delays, the Biden administration's punitive 100% tariff on Chinese electric car imports should go into effect on Sept. 27, the U.S. Trade Representative told Reuters today.
So what exactly is happening? The U.S. is working hard to diversify its EV supply chain, aiming to shield domestic automakers from a potential flood of affordable, high-quality Chinese EVs.
The issue has been a geopolitical punching bag between China and the West. China insists its EVs are simply superior, denies claims of overcapacity and argues that it’s helping accelerate global EV adoption. The U.S. and EU see things differently. They believe China has over invested in EV production, which could crush local competitors. The EU even accuses China of providing unlawful levels of state-driven subsidies.
But uncertainty still looms over America’s EV policy, with much depending on the outcome of November’s presidential election. The country remains deeply divided on EVs and that means the tariff and EV incentives could shift based on political winds.
Having said that, the tariff finalization has been delayed so much, we may see it get delayed until after November's election to keep it from being some kind of political football.
90%: Toyota And Hyundai Will A Discuss Hydrogen Partnership
Despite failing to prove its viability in the U.S., the prospect of hydrogen-powered cars seems far from dead. Just ask Hyundai, which, hot on the heels of a new set of talks with General Motors, is courting Toyota next.
Local reports suggest that Toyota CEO Akio Toyoda may meet Hyundai Motor Group Chairman Chung Euisun in Korea towards the end of October to discuss a collaboration for hydrogen vehicles in certain markets.
As the world prepares to move away from gas cars, we're seeing an increasing number of collaborations between automakers. Last week, BMW said that it would launch its very first hydrogen-powered vehicle in 2028, using Toyota's third-gen hydrogen fuel cell.
Both Toyota and Hyundai are leaders in that space. Toyota has the Mirai and Hyundai has the Nexo, both on sale in the U.S. They haven't garnered much excitement, as hydrogen infrastructure is crumbing stateside.
But regardless of that, the brands are seeing potential in the technology. And if it's not working in the U.S., it doesn't mean it won't work in other markets—Europe and Asia certainly seem more promising in that regard.
100%: How Should Jeep Stage A Comeback?
EVs are not ideal for a brand that prides on producing indestructible off-roaders that can champion the Rubicon Trail. Small and aerodynamic is considered the best form factor for EVs. The Wagoneer S seems the most aerodynamic of any other Jeeps we've seen in recent times. Then again, America's first all-electric Jeep isn't quite as interesting as perhaps it could have been.
What more can Jeep do regain some of its lost momentum? Leave your thoughts in the comments.
Contact the author: suvrat.kothari@insideevs.com
