FYI: Jeep is facing a critical juncture as it attempts to catch up in the electrification race, while grappling with gaps in its current gas-powered lineup.
As the global automotive industry races towards electrification, automakers are at a crossroads: either lead the charge with diverse electric vehicle (EV) offerings or bide their time and risk falling behind. Unfortunately, Jeep and its parent company Stellantis have opted for the latter and are now hastily trying to bridge the gap. Compounding their challenges are persistent issues within their lineup of gasoline-powered vehicles that need urgent attention.
This Friday edition of Critical Materials delves into the pivotal developments shaping the world of EVs, software-defined vehicles, and autonomous technology.
### Jeep’s Struggle to Catch Up and the Electric Comeback Plan
Jeep’s inaugural fully electric model, the Wagoneer S mid-size crossover, is finally slated for a fall release. Marking its entry into the EV market over a decade into the global transition, Jeep’s lateness is glaring in comparison to rivals with existing electric lineups. While Jeep touts its plug-in hybrids (PHEVs) like the Wrangler 4xe and the Grand Cherokee 4xe, it still lags behind competitors who are already deep into the EV territory.
Beyond electrification, Jeep faces significant challenges with its traditional vehicle lineup. The discontinuation of the entry-level Renegade and Cherokee last year has left a substantial gap, especially in the vital mid-size crossover segment. With Jeep’s focus skewed towards compact and full-size SUVs, the company saw its sales plummet to a mere 643,000 vehicles in 2023—a stark contrast to the nearly one million units sold prior to the pandemic.
Adding to the company’s woes is an open letter from Kevin Farrish, head of Stellantis’ U.S. dealer council, to CEO Carlos Tavares, highlighting the dire state of the brand’s market share, tumbling stock prices, and discontent within the dealer network.
However, Jeep CEO Antonio Filosa remains optimistic about the brand’s resurgence. Speaking to CNBC, Filosa outlined a strategy to reduce prices across the lineup, implement aggressive pricing incentives, and ramp up advertising efforts. The company has also planned a roadshow to address dealer grievances directly.
Jeep aims to leverage the growing popularity of hybrids as a springboard for its upcoming fully electric line. Upcoming EV models include the Wagoneer S, the Recon—a Wrangler-inspired electric SUV, a $25,000 electric Renegade, and an unnamed “mainstream UV”. Stellantis’ recent $406 million investment in Michigan plants for EV production is expected to catalyze Jeep’s electrification drive. While the journey ahead may be arduous, Jeep now has a golden opportunity to regain momentum.
### Biden’s 100% Tariff on Chinese EV Imports Set to Commence
In another significant development, the Biden administration’s 100% tariff on Chinese electric car imports is set to take effect on September 27, as per the U.S. Trade Representative’s announcement to Reuters.
This tariff is part of a broader strategy to diversify the U.S. EV supply chain and mitigate the risk of a deluge of affordable, high-quality Chinese EVs entering the domestic market. The issue has been contentious, with China asserting the superiority of its EVs, while the U.S. and EU accuse China of overcapacity and state-driven subsidies that could undermine local manufacturers.
Political uncertainty casts a shadow over America’s EV policy, particularly with the approaching November presidential election. The tariffs and EV incentives could see significant shifts depending on the election outcome.
### Toyota and Hyundai Discuss Potential Hydrogen Collaboration
Despite hydrogen fuel cell technology struggling to gain traction in the U.S., automakers like Hyundai and Toyota aren’t giving up yet. Hyundai, fresh off of discussions with General Motors, is now eyeing a partnership with Toyota. According to local reports, Toyota CEO Akio Toyoda is expected to meet Hyundai Motor Group Chairman Chung Euisun in Korea this October to explore collaborative opportunities for hydrogen-powered vehicles in select markets.
While the U.S. market has yet to see substantial adoption, Toyota has the Mirai, and Hyundai offers the Nexo—both hydrogen-powered vehicles. Although these models have seen limited excitement, especially with deteriorating hydrogen infrastructure in the U.S., the brands remain hopeful about the technology’s prospects in Europe and Asia, where hydrogen adoption appears more promising.
### Reimagining Jeep’s Future
Jeep’s identity is rooted in rugged, off-road capabilities, but the brand now faces a unique challenge in adapting this heritage to the EV landscape. While the Wagoneer S aims to be more aerodynamic and efficient, America’s first all-electric Jeep leaves room for more excitement.
To regain its lost momentum, Jeep must address its lineup gaps, deliver compelling electric and hybrid models, and strengthen dealer and customer relationships. The task is daunting, but with concerted effort and strategic adjustments, Jeep can reclaim its position in the evolving automotive market.
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William Kouch, Editor of Automotive.fyi
