Engines undergo a final inspection on the Stellantis Dundee Engine Complex on August 18, 2022 in Dundee, Michigan.
Bill Pugliano | Getty Images
Automaker Stellantis expects inflation costs on raw materials to subside next yr following significant increases through the coronavirus pandemic, CFO Richard Palmer told investors Thursday.
The spiking costs of critical raw materials utilized by automakers corresponding to steel, aluminum and others for EV batteries have been largely offset by record pricing of latest vehicles, cushioning automakers’ margins. But as price increases slow, costs have yet to follow.
Palmer said he expects the favorable pricing of latest vehicles to proceed into next yr, but said inflation could proceed to hit other parts of the automaker’s supply chain.
“What we’ll see in 2023 is a lower impact from raw material inflation than the one we have seen this yr. So, the entity of inflation impact, I believe will likely be lower in 2023,” he said when discussing the corporate’s third-quarter revenue and deliveries. “Inflation could also be high on other elements of the associated fee curve, but they’re of a lower entity in comparison with raw material this yr.”
Palmer didn’t specify what inflationary costs he expected to diminish or increase in 2023. Stellantis, which was formed by the merger of Fiat Chrysler and France-based Groupe PSA in January 2021, was not immediately available to comment.
Costs across the automotive supply chain have skyrocketed through the coronavirus pandemic, as corporations have struggled with logistics, materials and employees.
Ford in September warned investors that the corporate expects to incur an additional $1 billion in costs through the third quarter as a result of inflation and provide chain issues. The issues resulted in parts shortages affecting roughly 40,000 to 45,000 vehicles, primarily high-margin trucks and SUVs that have not been capable of reach dealers.
In June, AlixPartners reported raw that material costs for each electric vehicles and traditional models with internal combustion engines greater than doubled through the coronavirus pandemic.
