Will Stellantis Korea achieve rebound with Avenger EV?

Jeep Avenger electric vehicle / Courtesy of Jeep

Stellantis Korea hopes to achieve a major rebound with the launch of the Avenger, Jeep’s strategic electric vehicle (EV), but its use of Chinese batteries and weak range performance come as major downside risks for its potential success here, according to industry officials, Tuesday.

Jeep is the flagship brand under Stellantis Korea, but the once-popular carmaker has in recent years suffered a steep sales decline here amid fierce competition in the nation’s imported vehicle market.

The company hopes that the Avenger will be a game-changer, but its ill-timed launch may prevent the brand from achieving a meaningful sales rebound, as consumer sentiment toward EVs particularly with batteries sourced from Chinese firms shows no signs of recovery anytime soon.

The Avenger uses a 54-kilowatt-hour (kWh) battery pack supplied from China’s CATL. The vehicle can travel up to 292 kilometers on a single charge, which is far less than its major counterparts, such as Kia’s EV3 with a range that tops 500 kilometers. Both vehicles share a similar body size.

The Avenger is priced between 52.9 million won ($39,445) and 56.4 million won here, but Kia's cheapest EV3 sells at 42.08 million won. Additionally, the EV3 uses a domestically made battery from LG Energy Solution.

“Customers have a growing tendency to check in detail the battery specifications before purchasing EVs,” an official from a carmaker said. “After a Mercedes-Benz EV burst into fire and sparked a nationwide EV-phobia, customers’ fear sentiment on Chinese batteries is also escalating rapidly.”

This casts a gloomy outlook on the possible success of the Avenger here, as fewer and fewer customers are willing to purchase EVs with non-Korean battery manufacturers.

Stellantis Korea reported sales of 207.1 billion won in 2023, down 64 percent from the previous year. The carmaker’s operating profit also extended a bigger decline with 4.4 billion won, down 80 percent during the same period. Jeep's sales also plunged by 37 percent amid customers’ growing preference for luxury German carmakers and rising presence of domestic carmakers, such as Hyundai Motor and Kia.

“Even if CATL exudes its global influence as the world’s largest battery manufacturer, the point is that customers display a preference for EVs equipped with Korean batteries,” another official from the industry said. “The potential rebound for Stellantis Korea remains to be seen, but the worsening EV sentiment and growing influence of domestic carmakers make it harder for the carmaker to expand its footing here."

In April, Stellantis Korea Managing Director Bang Sil shared the firm's strategy focusing on restoring customers’ trust. She underscored that the carmaker will not be obsessed with expanding its sales figures aggressively.