Stellantis seeks more suppliers to help it hit green goals

TROY, Mich. — Stellantis seeks a larger supply base for green components and will lean on supplier innovations to meet its sustainability targets, the head of the automaker's circular economy business unit said here.

"We want to increase our supplier footprint," said Alison Jones, head of global circular economy at Stellantis, during a sustainability summit this week hosted by the Motor & Equipment Manufacturers Association. "We see that as a really good way to collaborate and work and use different expertise."

Jones' comments come as the automaker works to expand what it calls its circular economy business, an enterprise aimed at extending the life of parts and materials as much as possible by returning them to the manufacturing process for new components and vehicles. Stellantis plans to establish regional hubs for reconditioning and parts remanufacturing in the coming years while developing "local loops" for parts manufacturing and reuse.

The global automaker expects to generate more than $2 billion in revenue from the circular economy business in 2030 and reach carbon net-zero status by 2038.

The strategy revolves around what Jones calls the "4R's" — remanufacturing, repair, reuse and recycling — which ensures that parts last as long as possible and are returned into the manufacturing loop, driving down carbon emissions and raw materials consumption.

To do that, Jones said Stellantis will need the help of its suppliers. The automaker expects to have 40 percent of green materials in its vehicles by 2030, up from 15 percent today.

"This needs a proactive approach," she said. "We need suppliers prepared to challenge us on our thinking but also to take responsibility for delivering those mandatory components that we need for remanufacturing in other areas. That's a key consideration for us now."

Stellantis counts 11 suppliers in 18 locations in North America in its circular economy unit, providing the company with mechanical parts such as alternators and starters, valve bodies and turbo chargers. The suppliers produce 2,500 unique part numbers supporting 26 product lines, Jones said.

The company wants to grow that footprint significantly in the coming years, though Jones did not estimate how many suppliers Stellantis will end up with for its circular economy business.

But she said Stellantis has a need for components, including headlamps, taillamps, future variants of transmissions and long block engines, rear-drive modules, rear axles, steering columns and power inverters.

The automaker is looking at new ways to engage with suppliers in order to stay in the loop on innovative products before it puts out a traditional request for quote, or RFQ, on a needed component.

"What typically happens is an RFQ goes out, and then suppliers come to us," Jones said. "What we're trying to do is be aware of suppliers and [have] suppliers come to us before we put an RFQ package out, because there may be opportunities that we haven't considered."

How successful Stellantis is in pulling together this business plan could be influenced by how successful the company is in improving its relations with suppliers. The automaker has performed poorly in recent years in Plante Moran's annual automaker-supplier working relations study. But the company's score improved in 2023 as it became more transparent with its supply chain.

"We're not going to do all of this in-house," Jones said, "and we don't want to.

"We have potential to grow, and we want to grow," she said. "We think it's the right thing to do for our customers, for our company and for the planet and the sustainability of what we do."