PSA and FCA could collaborate on electric vehicle platforms

2 April 2019

PSA Group and Fiat Chrysler Automobiles (FCA) are exploring a partnership that may involve developing electric vehicles together.

In the latest example of industry collaboration, the two companies are holding preliminary talks to collaborate on a ′super platform’ to reduce their investment costs in the new technology. This is a necessity for carmakers if they are to meet strict emissions targets set by the EU.

The situation, reported by people close to the matter, could be announced by the end of the first half of the year.

Carlos Tavares, PSA Group CEO, suggested in March that the French company could look to acquire another carmaker following its successful turnaround of the Opel/Vauxhall brand, which it bought from General Motors in 2017. FCA CEO Mike Manley said at the same time that he would ′clearly look into’ a deal that would make the automaker stronger, including an alliance or a merger.

Charging forward

The automotive industry is, perhaps for the first time in decades, working reactively rather than proactively when it comes to new technologies. When 2021 CO2 standards were set, with a 95g/km target, the market was experiencing a surge in diesel sales. However, while the target has not changed, the world has. Dieselgate seriously damaged the reputation of oil-burning technology, and continued demonisation has seen sales plummet.

Yet developing new technology takes time and increases financial burdens. Many carmakers are already facing large fines for missing the 2021 targets, especially following the introduction of WLTP, and such cost issues could cause headaches. Collaboration, therefore, is the easiest way forward.

PSA and FCA currently share an agreement to cross-manufacture commercial vehicles and developing EVs would be a next logical step. This would allow both companies to share costs while improving lead times, meaning they could bring cars to market sooner than previously thought.

No comment

A PSA spokesman declined to comment but referred to comments Tavares made to the Wall Street Journal, where he said the company was not targeting a ′specific’ partner and isn’t engaged in ′deep’ negotiations to find a tie-up. ′We have continuous discussions with our partners,’ Tavares told the newspaper in response to a question about potential talks with FCA. ′There is no specific target ″” no specific, deep, ongoing negotiation.’

Should an agreement be reached, it could spell the end of the hopes of rival French carmaker Renault, which was looking to acquire FCA after merging its Alliance partner Nissan into its Group. This move is expected to take 12 months and Renault would need to see it completed before any further mergers could take place.