(Bloomberg) -- Stellantis NV is facing delays on a key new EV model for Europe because of software bugs, a dampener to efforts to rejuvenate a stale lineup and reverse a slump in profit.
The €23,300 ($25,216) Citroën ë-C3, the group’s flagship affordable electric car, is months behind schedule because of delays with final software checks for use in mass production, people familiar with the matter said, asking not to be identified discussing internal issues. Deliveries were supposed to start during the second quarter.
Buyers will start to receive their cars after the “summer break,” a spokesperson said. The vehicle’s order bank is at 30,000 units currently.
Pressure on Chief Executive Officer Carlos Tavares has been building for months as aging models and high prices pushed drivers to fresher products elsewhere, making the stock the world’s second-worst performing automaker this year. The issues deepened last week when the company reported first-half net income that nearly halved, a reversal from years of leading peers like Volkswagen AG and Ford Motor Co. on margins.
Stellantis has touted the Slovakia-made ë-C3 as the initial salvo to fight increased competition from Chinese EV makers. Citroën executives were also banking on getting the car to customers well ahead of arch rival Renault SA’s new electric R5, set for an initial starting price of €33,490. The two hatchbacks will now vie for buyers at roughly the same time, raising the stakes in Stellantis’ roll-out of 20 models this year to regain momentum in a slowing market.
Citroën’s French sister brand Peugeot’s new e-3008 SUV also had setbacks with mass production due to component problems in the battery vehicle’s powertrain, two people said. Reaching full-scale deliveries of the car, made at the Sochaux factory in France, is running behind schedule in some countries after starting in March in France and around June elsewhere. The company initially predicted deliveries to start in February.
Stellantis says it’s ramping up production as planned following shortages for some parts that slowed manufacturing. Orders of the new e-3008 reached 50,000 units at the end of July, the company said.
“The Sochaux site will not be at optimal production levels for a few more weeks, and this is normal and under control,” the spokesperson said by email. “Suppliers are also in launch phase, with production and shutdown periods.”
Software Stumbles
Stellantis isn’t alone in stumbling over software. Volkswagen’s troubles delayed the electric Porsche Macan by some two years while tech glitches irked VW ID.3 drivers. Volvo Car AB had to push back production of its flagship electric SUV, and General Motors Co. grounded sales of the battery-powered Chevrolet Blazer after infotainment screens went blank.
For Stellantis, the delays add to quality challenges with the company under scrutiny in Europe over thousands of recalls related to faulty air bags. In the US, the company is under investigation over engine-stall complaints while recalling some 1.2 million vehicles in North America to fix a radio software glitch that can inadvertently disable rear-view cameras.
Among the struggles, two top tech executives have recently departed. Former Nvidia Corp. executive Berta Rodriguez-Hervas left as head of artificial intelligence alongside software business head Mamatha Chamarthi, joining an exodus of high-profile executives in the US.
While Stellantis seeks to address the delays, it’s planning more cuts among engineers, the people said. Before year end, it may ax more than 1,200 additional salaried engineering positions in the US, Europe and China, dubbed “high cost” regions, according to an internal document viewed by Bloomberg.
No final decision has yet been made on the scope of the cuts amid government scrutiny, notably in Italy, one of the people said. A Stellantis media representative declined to comment.
The company trimmed about 400 salaried engineering jobs in the US already this year. On July 30, Stellantis said it will offer voluntary buyouts to US employees in different businesses, threatening layoffs if it didn’t reach its targets, CNBC reported.
Tavares, whose CEO contract expires in 2026, last week said he will spend some time in the US this summer to implement “corrective actions.” Beyond the headcount reduction, this includes cutting production, lowering prices and reviving two Dodge muscle cars — the Charger and Challenger — to stem market-share losses and reduce inventory levels in the group’s most profitable market.
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