According to Serbian President Aleskandar Vučić, Stellantis NV (NYSE: STLA) is investing 190 million euros to produce electric vehicles at a manufacturing plant in the country of which he was recently re-elected president.
“Today we signed an agreement on financing the electric car that will be produced in Kragujevac. The transition period until 2023 is underway, and we will start producing a model from 2024,” Vučić said in a speech at the signing of the contract. “A new era begins today.”
The company currently operates a plant in Kragujevac, the largest town in the central Serbian district of Šumadija, through its subsidiary Fiat Chrysler. Fiat has been operating a 67%-33% joint venture between itself and the Serbian government since 2008. The Serbian government is expected to invest 48 million euros in new plans to manufacture electric vehicles alongside Stellantis (STLA ).
Increased investment in Serbia comes only about a week after Stellantis (STLA) closed its plant in Kaluga, Russia due to sanctions pressure. It should be noted that Serbia is among Russia’s staunchest allies, along with Vučić recently rejecting calls to join the US and EU in sanctions. Political risks for the multinational automaker will remain a story to watch.
Learn more about geopolitical overhangs for the automotive sector in 2022.