The automotive industry is witnessing Stellantis, the parent company of brands like Jeep and Ram, reporting record profits of $18 billion for 2022. Despite lower sales, Jeep and Ram are identified as major contributors to this success, with Ram selling over 545,000 units in the U.S. alone and Jeep Wrangler sales exceeding 180,000 units in 2022. Stellantis attributes the success to high average transaction prices, citing an average of $57,000 for the Ram 1500 and $71,000 for the heavy-duty range.
However, the focus of attention turns to Stellantis CEO Carlos Tavares, who, like his predecessor Sergio Marchionne, emphasizes the high costs associated with the transition to electric vehicles (EVs). Tavares highlights the current and expected elevated costs of EV development, raising questions about the financial strategies employed to fund this transition.
A significant development supporting this inquiry is the pricing trend of the 2024 Jeep Wrangler. Initial reports in June revealed price increases ranging from $205 to $5,100 over 2023 pricing, with some trims seeing a decrease of $485. Now, six months later, a second round of price hikes is observed, ranging from $200 to $4,050, impacting every trim. Seven trims see four-figure increases, and the destination charge also rises by $100 to $1,895.
Comparing the 2024 pricing to the 2023 model year, the two-door Wrangler Sport has seen a $2,000 increase, with the destination charge up from $1,595 to $1,895. The four-door version is now $2,630 more expensive. The Rubicon, just a year ago, was $3,900 cheaper, and the high-performance Rubicon 392 had an almost $12,000 lower starting price in 2023 than in 2024.
Interestingly, this pricing strategy is not unique to Jeep, as competitors like the Ford Bronco also feature high base prices. The report highlights that the average monthly payment on a new car in 2023 was $726, with an average loan length of 68.12 months, resulting in a significant total cost of $49,455 before any potential trade-in or down payment. The analysis suggests that these rising costs are reflective of the industry trend, possibly indicating a strategy to generate funds for the expensive EV transition.
In summary, the article raises questions about Stellantis’ financial approach to support the shift to electric vehicles, using the pricing strategy of the 2024 Jeep Wrangler as evidence. The consistent price increases and the comparison with competitors’ pricing suggest a broader industry trend of higher costs for consumers, potentially driven by the need to fund the expensive transition to electric vehicles.