Higher prices help Stellantis weather worsening chip shortage

Stellantis is expected to deliver a strong performance this year because of its higher prices and robust consumer demand.  Despite a worsening global shortage of semiconductor chips this quarter, the world’s fourth-biggest carmaker is heading towards a strong performance.

Without environmental credits bought from Tesla, the group also expected to meet European CO2 emissions targets this year. This gives another boost to the results. Chief Financial Officer Richard Palmer said this in a statement. After forecast-beating quarterly revenues, he said to a conference hall that they don’t have to pay Tesla any longer will further improve their performance in Europe.

In the second half of 2021 the chip shortage should improve, said Palmer. He also warned that the disruption to the auto industry could last into 2022. Due to a shortage of vital chips in this covid situation, carmakers across the world have had to curb output. The higher prices paid by American consumers added about $1.5 billion to Stellantis’ first-quarter revenues.

From the merger of Italian-American Fiat Chrysler and France’s PSA shares in Stellantis rose more than 5%. Chip shortages cut around 11% of Stellantis’ planned production in the first quarter. Stellantis reiterated its forecast for an adjusted operating profit margin of 5.5%-7.5% this year.