And I tried to give you some of those examples in the earlier comments. But I think we look at this year as saying, starting today, we think there’s more headwinds than there are tailwinds. And the way we work as a management group is, we say, we have to show what we can do in terms of cutting our costs, making sure we manage our prices effectively, really driving all those positives. And only when we do that do we earn the right to look at being more aggressive in terms of how we guide the market and what we entrust in terms of our ability to deliver. But you heard there really are a lot of things, I’ll say, whether it’s the logistics or the raw materials, those type of things that are helping us. And we are going to be focusing very hard on every single thing that’s in our control to deliver the best possible results.
Carlos Tavares: Thank you, Natalie. Let’s move to the next one. Thank you. Thank you, George.
Operator: Our next person in the queue is Patrick Hummel of UBS.
Patrick Hummel: Yeah, thank you. Good afternoon. Good morning, everybody. If I may start, Carlos, you alluded to this at the very beginning, the production flexibility, the platform flexibility that Stellantis has. Can you just elaborate on that in a bit more detail? Is it right that basically every plan, every production line can do with the STLA architectures, the BEV version and the ICE and hybrid version at the same time. So there is nothing really dedicated in terms of manufacturing assets. And how do you deal with that on the supplier side? As in, you have different parts going into the ICE car than in the BEV, in the powertrain side, needless to say the battery itself. So how can you make sure you’ve got enough flexibility on that front should we go through a phase of temporary weaker BEV demand?
And if I just may one for Natalie, on the share buyback decision and the balance sheet situation, great to see improved or higher shareholder returns. Net of those payments that are yet to come for the buyback and the dividend, you still have a really solid balance sheet with more than 20 billion of net cash left. Should we consider that like a war chest for any potential M&A opportunities, or is there anything specific you have in mind on the investment front that needs to be taken into account in the budget. Thank you.
Carlos Tavares: Thank you, Patrick. Those are three great questions. On the third one, I will comment on the M&A so that we don’t get trapped, but of course, Natalie will be free to jump in. On the first two ones, first of all, one suggestion that we’ll have for our IR team is to invite you to visit one of our plants so that you can see with your eyes the flexibility that we are able to demonstrate in dealing with a very uncertain world. Yes, I can confirm that we have multi-energy platforms that can accommodate ICE and BEVs. A few years ago, I’m sure you remember Patrick, perhaps not with you personally, but with the community of investors, two or three years ago, the message we were getting was if your platforms are multi-energy, then they are not optimized for pure BEV, which means that the performance of your BEVs are not as good as the competitors.
That’s the message we were getting three years ago. I remember at that point in time, I asked our team to demonstrate to me what was exactly the trade-off of having multi-energy platform against dedicated BEV or dedicated ICE platforms. And we made that study. We had several mock-ups. I want to give you the conclusion, which is quite simple. In fact, the only difference is in the way you position the AC system, the air conditioning system, which generally speaking is below the instrument panel and below the instrument panel, above the tunnel, you have somewhere the shape of the AC system that is there on the firewall. If you make a dedicated BEV platform, you can push that AC system a little bit forward, let’s say about two to three inches max.
So you take the AC and you push it forward in the engine compartment because the electrical components are smaller than a pure ICE engine. And then you can compare two mockups, one with the AC as it is positioned for a multi-energy platform, and another one where you say, well, this is a dedicated platform, so I’m going to push the AC forward. Generally speaking, what is below the IP, mostly on top of the tunnel, is an area that you don’t use, because you have the driver and you have the co-driver. And generally speaking, everything which is below the IP instrument panel is dark. So the visual impact of moving that AC forward is marginal and the actual performance in [indiscernible] is marginal off marginal, which this means that the benefit to the consumer of having a dedicated platform is almost nil compared to the diversity complexity that you generate if you have two kinds of platforms.
We made that decision three to four years ago despite the criticism. It happens that in a certain world, in a certain world today, it’s the right decision. It is proven to be the right decision. And we could show to you those mockups so that you can make your own opinion, but it’s crystal clear when you make that study. So we are very fine with that multi-energy decision on the platforms. The second thing is when you go in a plant where you are making BEVs. And you can go, for instance, to Ordan where we make the LCVs and we make right now in Ordan the ICEs, the BEVs and the fuel cells. Same plant, same line. So we can show it to you easily and we see that what you have to prepare upstream of the main line is the module that you call a battery pack.
Yes, you have a dedicated small shop where you bring the trays, you bring the modules, you bring the harnesses and you assemble the battery pack, then you move the battery pack in the line, on the main line as if it was an exhaust system or a gas tank, and you assemble it on the hood of the — on the floor of the car. So yes, this works because the level of expertise that we have in manufacturing and overall layout of our platforms is very, very high and you can visit anytime. I would like to be there to invite you so that you can see it. On the M&A stuff we have already commented right now. Nothing is ongoing. It is clear that if we are among the most profitable carmakers in the world, we are in a better shape to face the Chinese offensive than the ones who have the half of our profitability to face that competition.
And if that was to come, then the guys who are the most profitable today are the guys who will be in a good position to eventually capture any opportunity. Nothing more than that. Everything else is speculation. This is our thinking on that front. I don’t know, Natalie, if you want to add something to that.
Natalie Knight: I think when we look at everything that has to do with the balance sheet, the capital structure, the things that I would focus on are think about this as something where we’re on a journey. If you look at our business a couple years ago, this is something where we had never done a share buyback. We started that last year. We looked at an opportunistic ability to capture more share when Dongfeng offered them in the second half of the year. We have now increased our dividend. We have increased our share buyback. And one of the things that’s kind of been really central in that thinking this year was we said, hey, we want to move from something where we’re building that position to a place where we’re maintaining it.
And we’ve done that. As we look going forward, we’ll see how this moves along. I think we’re very proud of what we’re doing now. It depends, obviously, on what happens with our business performance and that we keep delivering at this high rate. But think of this as something where I think it’s a great position to be in today. It is a real signal as to what we want to deliver the market, but it’s by no means the end of the journey.
Carlos Tavares: Thank you, Natalie. Let’s move on. Thank you, Patrick.
Operator: Thank you. [Operator Instructions] The next person in the queue is Dorothee Cresswell of BNP Paribas Exane.
Dorothee Cresswell: Hi, there, and thank you for taking my question. It’s actually a follow-on to Daniel’s earlier one, but honing in on less electrification strategy, because your NAFTA BEV launches obviously aren’t that far away now. So I wondered how quickly will you be able to replicate the best profitability that you already generate in Europe today in North America? Thank you.
Carlos Tavares: Well, thank you, Dorothee. That’s a great question. You know, it’s — the short answer, which would not be as respectful as it should be because it’s too short, is 2025. That’s the short answer. In fact, most of the launches will happen in the second half of 2024, at least for the US market, except for the ProMaster EV, which is already on sale and already ramping up. So it’s fair to say that given the sequence we have, the full impact, positive impact of our BEV new launches will be visible in 2025 full year. You will see some of it in 2024 by the end of the year, given the ramp up that we will have, but that’s the short answer. We will visit, we will see that in 2025 full year scope and second half of 2024 will be the ramp up.
That’s for NA. For Europe, you see it today. You have it today. You are going to see the ramp up of the Peugeot E-3008, which is going to be a very important pillar of our business in Europe. This is going to start in the next few weeks, as we are going to bring the cars to the showroom very soon. So in Europe you will see a full year of BEV power. One of the good things you can already see is that when you look at the BEV market share in Europe on the B segment, if my memory is correct, we have more than 60% BEV market share in the B segment and the BSUV segment, both in Europe, which means that it demonstrates the competitiveness of our B segment, B-Hatch and B-SUV products in Europe. When you look at the numbers on segment share, where you see the weakness in Europe is the C segment.
You see that in the C segment we don’t have enough BEV market share. That’s why we are now bringing the 308 E-version, the Astra E-version, and of course in the C crossover C-SUV, the Peugeot E-3008. So you should see, hopefully with us, that our BEV share in the C segment is going to grow and there is no reason why we would not bring it closer to the share that we already have in the B-Hatch and the B-SUV which from the top of my memory in Europe is above 60% of share in the B segment in Europe. So that’s the power of what we have in Europe. And we are doing this with profit. We are doing this with profit. Last but not least, if I add to the competitiveness of our products and the market coverage we have with our brands, the power of our sales financing arm, you end up with something that may be meaningful for you, which is the fact in the social leasing channel that has been created by the French government, we have more than 70% market share from the recollection of data that we have been doing, which means that when you add the competitiveness of our products and the power of our financing arm, you end up with a very competitive offering to our customers that they immediately accept at 70% market share using 10 eligible products that we put on the market, which is about 50% of all the eligible products that were put in the market.
This is to say that it’s a perfect demonstration of our ability to converge in affordability, profit and product appeal. That’s what this is. Now we have to do the same thing in the US. We have to be as appealing, as affordable and as profitable as it should be and that’s what we are preparing for the future. But the full picture will be visible in 2025. Thank you Dorothee.
Operator: Next in queue is Michael Jack of Bank of America.
Michael Jacks: Hi. Good morning, good afternoon. Thanks for taking my question and congrats on the great results and big step forward on shareholder returns. Going back to an earlier question on AOI, I’m sure pricing is the most difficult variable to predict, but it would be great if you could give us your take on the pricing environment in Europe and the US, including the dynamics between BEVs and ICE. And in conjunction with that, Natalie, whether BEVs are included in the equation of puts and takes laid out in the guide or if this is one of the weapons you have at your disposal to help fight against the various headwinds. Thank you.
Carlos Tavares: Thank you Michael. Let me take the first part, and Natalie will take the second one. You know, the BEV story is an interesting one, because we all know that we need to fix the affordability, which means the BEV story is a story about the race to reduce the total production cost in order to give back to the market more affordability while protecting the margins. So surprisingly, when we talk about the pricing power of BEVs, in fact, we are talking about cost reduction. That’s what we are talking about. And it’s interesting to see that one of the drivers of the total production cost reduction of BEVs right now is the fact that a number of, a great number of people are talking about the fact that the BEV sales growth is not as strong as what some would predict.
And that has an impact on the raw material price, which means the raw material price is going down, which means total production cost of BEVs is going down, which means it’s opening the road for more affordability. And then affordability will bring more customers, and then there will be a reverse situation at one point in time. So what I want to say is that if we want to bring the affordability of EVs to the market as we should, we need to accelerate the pace of total production cost reduction. We have tons of ideas for that. What I can communicate to you is that right now the pace of total production cost reduction of BEVs is higher than the pace of total production cost reduction of ICEs, which means we are converging. Are we converging fast enough or not fast enough?
