Stellantis, the parent company of Peugeot, Fiat, and Jeep, announces plans to invest €1 billion in its factory in Mulhouse, eastern France, to design and produce three new Peugeot electric or hybrid vehicles beginning in 2029.
The shift occurs as European automakers face declining demand in China, increasing global competition, and tariffs.
Concurrently, Chinese companies like BYD, MG Motor, and Chery are making strides in Europe's expanding EV market, leading car manufacturers to invest significantly in innovative technologies and more budget-friendly options.
The announcement is a component of Stellantis' wider €60 billion plan focused on regaining profitability within the upcoming five years. It also reaffirms the site plans that were presented by French President Emmanuel Macron last month.
Stellantis states that the upcoming vehicles will feature compact SUVs and sedans, enhancing Peugeot’s presence in a market segment that represents approximately 30percent of car sales in Europe.
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According to Stellantis, the new models will include compact sedans and SUVs to enhance Peugeot's position in a "key segment" representing 30percent of car sales in Europe.
European automakers are experiencing heightened pressure as they shift to cleaner vehicles while contending with the rising popularity of Chinese brands, many of which provide more affordable electric models.
Earlier this year, Stellantis CEO Antonio Filosa admitted that the company had misjudged the demand for electric vehicles. The group then noted a €22 billion write-down associated with its EV investments and initiated a strategic review.
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Since then, Stellantis has introduced its new STLA One electric vehicle platform, aimed at reducing production expenses and speeding up the creation of new models.
The fourth-largest car manufacturer globally is focusing its efforts on four out of its 14 brands—Peugeot, Fiat, Jeep, and Ram—while cutting its European production capacity by approximately 20percent, which equates to about 800,000 vehicles each year.
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The firm is likewise broadening collaboration with Chinese associates to enhance sales in France and internationally. Chinese car manufacturer Dongfeng has recently entered into a joint venture agreement with Stellantis that encompasses manufacturing, sales, and engineering operations in Europe.