The massive Jeep recall is just the latest headache for Stellantis

In recent months, Stellantis (STLA) the multinational parent company of beloved American auto brands such as Chrysler, Dodge and Jeep has received a number of bad cards.

A dismal first-half earnings call in July was followed by an unfortunate pattern of events and drastic measures, including voluntary buyouts for white-collar workers and layoffs of more than 2,450 assembly line workers following the outage Ram 1500 Classic.

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Meanwhile, a coalition of Stellantis-branded US dealers labeled the state of Stellantis’ business a “disaster,” and Shawn Fain and the United Auto Workers targeted the automaker for failing to meet its contractual obligations.

However, a new problem is added to the growing list of issues facing the automaker.

2025 Jeep Wrangler 4xe

Stellar

Dangerous Jeep defect triggers massive recall

Amid Stellantis’ woes, the auto multinational has issued a massive recall of some of its most popular vehicles.

In separate announcements by the automaker and the National Highway Traffic Safety Administration (NHTSA), a worldwide recall has been issued affecting 194,000 units of the Jeep Wrangler and Grand Cherokee 4xe plug-in hybrids.

According to NHTSA, the recall affects 154,000 plug-in hybrids in the United States, including 118,230 Jeep Wrangler 4Xe models and 35,802 Jeep Grand Cherokee 4Xe models, which are at risk of catching fire.

The federal regulator says the defect is in the high-voltage lithium-ion battery unit used to power the hybrid powertrain. In documents filed by Stellantis with NHTSA, battery supplier Samsung SDI (which is partially owned by Samsung Electronics (SSNLF) ) told the automaker in August that the cause of the defect was “separator damage combined with other complex interactions within the cell.”

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In a statement on September 30, Stellantis reported that the automaker knew about the defect. It noted that “a routine data review by the company led to an internal investigation that uncovered 13 fires” and that “all vehicles were parked and turned off” when they occurred.

NHTSA’s Office of Defect Investigation (ODI) began its own investigation in September after receiving nine reports of fires and one related injury, with most of the alleged incidents occurring in relatively new Jeeps.

The recall follows a 2023 recall of 32,000 Wrangler 4xes that required a software update. Stellantis said the procedure was “ineffective in detecting certain anomalies” because some vehicles that caught fire were treated with the software update.

Stellantis estimates that 5% of affected vehicles have this defect. However, they and NHTSA advise owners of model year 2020-2024 Jeep Wrangler 4xes and 2022-2024 Jeep Grand Cherokee 4xe plug-in hybrids to park outside buildings or other vehicles until the recall repairs are completed.

Additionally, the automaker said the risk of fire is reduced when the battery is completely discharged, and owners are advised to refrain from recharging. Stellantis says a fix is ​​imminent, and owners will be notified when they can schedule service.

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Inventory issues and declining sales are hampering Stellantis’ progress

News of the recall rubs more salt into Stellantis’ wounds, giving car buyers yet another reason not to patronize an automaker with existing inventory issues.

According to an analysis by car shopping website CarEdge, six of the ten slowest selling cars in the US are owned by Stellantis. Some of the worst-performing cars have nearly a two-year supply rotting on dealer lots across the country.

In an announcement made earlier on September 30, Stellantis said it had “accelerated its planned normalization of US inventory levels,” prioritizing its target of having “no more than 330,000 units of dealer inventory by at the end of 2024′ instead of 2025.

In addition to reduced factory production, Stellantis says it plans to offer more incentives and discounts “on 2024 and older vehicles.”

Still, Stellantis is doing its best to move the metal, as new figures show it is struggling to do so.

In new sales data released on October 1, Stellantis reported that it sold 305,294 cars in its portfolio in the US during the third quarter of 2024 – a decrease of 19.8% compared to the same period last year and a decrease of 11, 5% compared to the last quarter.

While the numbers spell disappointment, the automaker says an “aggressive stimulus program,” or bigger and bolder discounts, implemented at the start of the quarter is showing results, with dealer inventory down 50,000 units, or 11.6 percent.

“These cross-brand incentives, which will continue through the end of the year, also contributed to the consecutive month of total share growth in Q3, from 7.2% in July to 8% in September,” said Matt Thompson , Stellantis’ head of retail sales in the US. “We continue to take the necessary steps to boost sales and prepare our dealer network and consumers for the arrival of the 2025 models.”

Stellantis NV, which trades under the symbol STLA on the New York Stock Exchange, is down 0.07% from the opening bell, trading at $13.70 per share at the time of writing.

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