Back to top

Image: Bigstock

Stellantis (STLA) Boosts EV Future With Kuniko Collaboration

Read MoreHide Full Article

In a groundbreaking development, Italian-American automaker Stellantis N.V. (STLA - Free Report) has inked a binding offtake term sheet with European-focused battery minerals explorer Kuniko Limited. This agreement allows Stellantis a future offtake of 35% of nickel sulfate and cobalt sulfate, crucial battery-grade metals, from Kuniko's Norwegian exploration projects for a nine-year term.

Stellantis has also purchased €5 million (A$8 million) of new equity in Kuniko, giving it a 19.99% shareholding and the right to nominate one director to the Kuniko board. This investment will be used to propel Kuniko's brownfield and greenfield battery metals exploration projects in Norway, including nickel, cobalt and copper.

The binding offtake and share subscription agreements are, however, subject to customary closing conditions, including regulatory approvals.

This strategic partnership aligns with Stellantis' Dare Forward 2030 plan, aiming to achieve a 100% passenger car battery electric vehicle sales mix in Europe and a 50% mix in the United States by 2030. Stellantis is forging ahead with its commitment to become a carbon net zero corporation by 2038, and the collaboration with Kuniko brings it one step closer to this goal.

Stellantis' chief purchasing and supply chain officer, Maxime Picat, emphasized the company's aggressive path to building a comprehensive portfolio of raw materials to meet its electrification targets. The partnership with Kuniko serves as another lever to support Stellantis' European battery needs with a local and environmentally conscious solution.

Kuniko's CEO, Antony Beckmand, stated that the partnership with Stellantis promotes sustainable European battery value chain solutions and validates the potential of Kuniko's battery metals project portfolio in Norway. This collaboration is anticipated to contribute significantly to the growth and advancement of the European battery industry.

Stellantis' strategic partnership and investment in Kuniko present a promising step toward building a sustainable European battery materials cluster. This development not only secures a stable supply of critical battery metals for Stellantis but also paves the way for the growth of the European battery industry. This collaboration is part of Stellantis’ larger strategy to assemble a roster of partnerships to ensure a stable supply of key materials for its electrified future. Apart from Kuniko, Stellantis has agreements with Alliance Nickel, McEwen Copper, Terrafame, Vulcan Energy, Element 25 and Controlled Thermal Resources.

For investors, these strategic deals by Stellantis underscore its commitment to its electrification targets and pursuit of becoming a carbon net zero corporation, which bodes well for the company's long-term sustainability and growth. STLA currently carries a Zacks Rank #2 (Buy).

Top-Ranked Auto Stocks

Better-ranked stocks in the auto space include General Motors (GM - Free Report) , Honda (HMC - Free Report) and Li Auto (LI - Free Report) , each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GM’s current-year sales is pegged at $163.8 billion, implying an uptick of 4.5% year over year. The company’s 2023 EPS has been revised upward by 9 cents in the past 60 days. General Motors surpassed earnings estimates in three out of four trailing quarters and missed once, the average being 15.5%. The stock has gained more than 14% year to date.

The Zacks Consensus Estimate for HMC’s current fiscal year sales and EPS estimates implies year-over-year growth of 16.5% and 30.7%, respectively. The company’s fiscal 2024 EPS has been revised upward by 9 cents in the past 30 days. Honda’s fiscal 2025 EPS is pegged at $4.16/share, marking year-over-year growth of 5.1%. The stock has gained more than 32% year to date.

The Zacks Consensus Estimate for Li’s current-year sales and EPS estimates implies year-over-year growth of 131% and 2,400%, respectively. The consensus mark for 2023 bottom line has improved from a loss of 8 cents/share to a profit of 25 cents a share over the past 60 days. The company’s stock has gained more than 70% year to date.

Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.

Published in