AUBURN HILLS, Mich. - Stellantis (NYSE:STLA), the global automaker, has announced a $29.5 million investment in an advanced wind tunnel technology at its Michigan facility, aimed at enhancing the aerodynamics of its electric vehicles (EVs). The investment in the Moving Ground Plane (MGP) technology is expected to reduce drag and improve EV range, a critical factor for electric vehicle performance.
The upgraded wind tunnel will allow Stellantis to measure and mitigate airflow resistance from wheels and tires, which contribute significantly to a vehicle’s aerodynamic drag. This capability is particularly important as the company seeks to optimize the efficiency of its EVs, potentially leading to smaller battery sizes and cost savings.
Mark Champine, senior vice president and head of North America engineering technical centers, emphasized the importance of range for EV customers and the role of reduced drag in enhancing the driving experience. The investment is also seen as a step toward meeting Stellantis’ Dare Forward 2030 strategic plan, which includes a commitment to carbon net-zero by 2038.
The new facility features a realistic simulation of on-road conditions, enabling more precise testing. This translates to quicker adjustments and a faster speed to market for new vehicle designs. The MGP technology will be used for vehicles sold globally, across various Stellantis brands.
The Auburn Hills wind tunnel, operational since 2002, will now be able to accommodate larger vehicles, including those based on the STLA Large and Frame platforms. The investment is part of an estimated $85 million commitment from the 2019 UAW contract, which includes a new annex for staging test vehicles and a new outbuilding for the MGP system.
Stellantis has a history of aerodynamic innovation, dating back to the 1929 wind tunnel built for Chrysler Corporation. The company continues to lead in this field, with recent models like the 2025 Ram 1500 and Chrysler Pacifica achieving best-in-class coefficients of drag.
The investment in the MGP technology is a key enabler for the development of BEVs and aligns with the company's goal of offering more than 75 BEVs and achieving 5 million annual vehicle sales by 2030.
This development, based on a press release statement, underscores Stellantis' ongoing efforts to enhance vehicle performance and sustainability.
In other recent news, Stellantis and General Motors (NYSE:GM) are set to receive significant funding from the U.S. Department of Energy to aid in the conversion of their manufacturing plants for electric vehicle (EV) production. The grants, totaling $1.7 billion, are part of a government initiative to boost the EV industry. Meanwhile, Stellantis is also participating in discussions with the Mexican government, alongside other industry leaders, to identify products that can be manufactured domestically, in a bid to reduce reliance on Asian imports.
In Turin, Italy, the future of the car industry, including the Stellantis-owned Fiat, is uncertain as the city grapples with the challenges of transitioning to the new era of EVs. Despite this, Stellantis maintains that its Mirafiori plant, which currently produces the electric Fiat 500, has a future and is slated to begin manufacturing a new hybrid Fiat 500 in late 2025.
On the labor front, the White House has urged Stellantis to honor its agreement with the United Auto Workers, which includes a commitment to revive and scale up operations in areas impacted by plant shutdowns. In a bid to foster a sense of ownership among its employees, Stellantis has also expanded its employee share purchase plan, 'Shares to Win', to cover nearly its entire workforce worldwide.
In other company developments, Stellantis has announced changes to its management structure, revised its profit forecast for 2024, and partnered with Segway-Ninebot to offer customers a diverse mobility experience. The automaker is also nearing approval from the Italian government for the sale of a majority stake in its robotics division, Comau, to private equity firm One Equity Partners.
InvestingPro Insights
Stellantis' $29.5 million investment in advanced wind tunnel technology aligns with its strategic focus on electric vehicle development and efficiency. This commitment to innovation is reflected in several key financial metrics and insights from InvestingPro.
According to InvestingPro data, Stellantis currently has a market capitalization of $38.13 billion USD. Despite recent challenges, including a 13.57% quarterly revenue decline, the company maintains a strong financial position. An InvestingPro Tip highlights that Stellantis holds more cash than debt on its balance sheet, providing financial flexibility to fund strategic investments like the wind tunnel upgrade.
The company's focus on EV range improvement through aerodynamic enhancements could be crucial for its future performance. This is particularly relevant given another InvestingPro Tip indicating that analysts anticipate a sales decline in the current year. By improving EV efficiency, Stellantis may be able to offset some of these challenges and maintain its competitive edge in the evolving automotive market.
Investors should note that Stellantis is trading at a low earnings multiple, with a P/E ratio of 2.73. This could suggest that the market has not fully priced in the potential long-term benefits of the company's EV strategy and investments like the wind tunnel upgrade.
For those interested in a deeper analysis, InvestingPro offers 15 additional tips for Stellantis, providing a comprehensive view of the company's financial health and market position.
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