Why People Think Stellantis, BMW, And Renault Might Merge Into One Giant Automaker

Rumors are starting to swirl around European outlets suggesting that the long-suspected merger of Renault and Stellantis might finally be happening, and this time there’s a new player involved: BMW. Not since the Traveling Wilburys have forces so strong been united in a common cause.

For Stellantis this might be a relief as the company is having such a crap time in Italy that CEO Carlos Tavares is being dragged before that country’s parliament to explain why things are going so poorly. This is all happening against the backdrop of potential EU tariffs against China, which may end up passing after all.

And, finally, I’m going to wrap up The Morning Dump with an alarming report about Uber and Lyft drivers using their Teslas as proto-robotaxis. That’s a little bleak, but the Astros are no longer in the post-season so I’m feeling in a dark mood.

The European Supergroup Merger Is Nigh… Maybe

Individually, European carmakers are in trouble. They’re fighting for relevance in Europe, China, and the United States and not necessarily winning in any of those markets. It was bad enough when European brands had to fight other European brands. Now Europe’s carmakers are forced to try to beat brands from Japan, Korea, the USA, and China at home.

This friction led to serious murmurings earlier this year that Renault, fresh off its Nissan divorce, could hook up with Stellantis. Ever since the combination of Peugeot and Citroën into one automaker, the French have been left with the two state-supported car companies. It’s not an ideal situation for the French government, and you can imagine why it’s so appealing to French President Emmanuel Macron to try to combine them.

Most of these rumors seem to be coming out of Italy, so let’s start with Italian business publication First Online:

The idea is this: to create a all-European colossus to face the pitfalls of US and Chinese producers, to oust the Japanese Toyota from the top of the global manufacturers’ podium and surpass Volkswagen from the top of the European ones. An idea that, already written in the notes of Sergio Marchionne, has returned with the hypothesis of a merger between Stellantis and Renault right in coincidence with the Stellantis profit warning of yesterday, with the blessing first of all of Emmanuel Macron who also sees a political advantage in it, but also of John Elkann who would prefer to disengage and move to other sectors.

There’s a lot to unpack here.

I don’t need to explain all of the external threats to European carmakers, but the strange politics of France are worth clarifying a bit. France has a parliamentary system, but one that gives the executive a lot of power and space to create a government. The country’s left-wing party won the most seats, but not enough to win outright, so centrist Macron formed an uneasy alliance with the right to stay in power. Creating a bigger and theoretically more competitive global automaker with a decent chunk owned by France could be a plume in his chapeau.

And what of Stellantis Chairman John Elkann? I’m not as steeped in Italian business rumors as others, so take everything with a grain of sale. It seems like the implication is that cars are so 20th century and a huge pain to own right now, so why not get out while the getting is good? Or, at least, why not get out before the getting gets any worse? Elkann shot down these rumors earlier this year.

Stellantis CEO Carlos Tavares has, allegedly, been against a merger that would almost surely see him sidelined early (though his days at Stellantis might already be numbered). A reporter asked Tavares about this earlier today in Italy and he called the idea “Pure speculation.”

…So you’re saying there’s a chance?

If the idea of Renault and Stellantis getting together isn’t wild enough a new person has entered the chat. If you saw the opening ceremony of the Paris Summer Olympics you know the French are fine with a three-partner merger of equals, though it’s a little kinky for ze Germans.

Again, all of this is coming out of Italian newspapers and Italian business sites. Every society has its own mores around the press and I am definitely not saying you shouldn’t entirely trust Italian newspapers. I would just maybe suggest pizza dough isn’t the only thing that the Italians are good at stretching.

The idea of creating an “Airbus of Cars” that would mimic the consolidation of a bunch of Europe’s carmakers the same way Airbus combined a trove of European aviation companies is an old one that traces its roots back to the late, great Sergio Marchionne, who essentially called it when he said mergers were the only thing that made sense. Later this month Renault CEO Luca de Meo is going to meet up with BMW’s Oliver Zipse and Tavares and this seems to be fueling a lot of these rumors.

From the hometown tabloid Torino Cronaca comes the best summation of the rumor:

The reason for the alliance would be first of all to counter Chinese competition, although Stellantis has a partnership – with an investment of 1.5 billion – with Leapmotor while Renault has it with Geely which controls, among others, Volvo. Then, in the whirlwind of rumors, BMW has now also entered , due to a meeting – a round table, to be precise – in the program of the Paris Motor Show which opens on October 13 and to which Stellantis also returns: on October 15, Luca De Meo, Carlos Tavare and Oliver Zipse, CEO of BMW , will be the protagonists of a debate, which will also address the topic of this hypothetical “Airbus of the car” .

How likely is any of this to happen? I think Stellants combining with Renault at some point in the future isn’t a complete given, though it’s probably never been more likely than now. The BMW piece doesn’t seem as imminent, although a partnership of some kind that doesn’t involve significant transfers of ownership makes sense to me.

Just because it’s maybe a good idea, however, doesn’t mean it’s going to happen. I would love to see more reporting on this from the German side in the run-up to the Paris Motor Show.

The Italian Parliament Would Like Carlos Tavares To Explain Why Everything Is Terrible Right Now

Imagine having to go to the Italian parliament to explain why no one seems to want the adorable but expensive Fiat 500e? That’s basically what Stellantis CEO Carlos Tavares, pictured above, is going to have to do next week.

Should we quote another Italian outlet? Sure. Here’s Euractiv.it:

Stellantis CEO Carlos Tavares will appear before the Italian Chamber of Deputies’ Commission for Productive Activities, Commerce, and Tourism and is expected to deliver a comprehensive report on the company’s automotive production in Italy.

Stellantis confirmed the meeting in a statement, expressing its “spirit of collaboration” and willingness to engage in dialogue with Italian institutions.

“Stellantis’ commitment to open and constructive communication with institutions remains unwavering. This includes our ongoing relationship with the Ministry of Enterprise and Made in Italy, led by Minister Adolfo Urso, and the Italian parliament,” the statement read.

The big concern here seems to be Stellantis telling the local unions that Europe’s electric car market is in “deep trouble” and that the result could be reductions in output at the Italian plant that’s making the Fiat 500e.

Can EU Pass Its Chinese Tariffs?

The likelihood of the European Union passing tariffs of up to 45% on Chinese automakers seemed high as recently as two weeks ago, but wavering from some EU countries like Germany and Spain made the chances feel a little more 50/50 as of late.

According to Reuters, the pro-tariff bloc of France, Greece, Italy, and Poland might have enough support to push through the measures:

Under EU rules, the Commission can impose the tariffs for the next five years unless a qualified majority of 15 EU countries representing 65% of the EU’s population votes against the plan.

France, Greece, Italy and Poland will vote in favour, officials and sources in those countries told Reuters. Together, they represent 39% of the EU population.

Germany is expected to refrain.

Uber And Lyft Drivers Are Reportedly Already Acting Like They Have Robotaxis

The future is so much fun. You might be in your driverless robotaxi and some dude who looks like he just got kicked out of a ska band might try and stop your car to dibs your digis. OR, perhaps worse, the driver of your very-much-not-self-driving Tesla might just let the car drive.

With Tesla soon to unveil its own robotaxi, Uber and Lyft drivers are allegedly already using the company’s Full-Self-Driving software extensively.

From Reuters again:

A self-driving Tesla carrying a passenger for Uber rammed into an SUV at an intersection in suburban Las Vegas in April, an accident that sparked new concerns that a growing stable of self-styled “robotaxis” is exploiting a regulatory gray area in U.S. cities, putting lives at risk.

[…]

Many say the software, which costs $99 per month, has limitations, but that they use it because it helps reduce drivers’ stress and therefore allows them to work longer hours and earn more money.

This is an interesting grey area. Of course, there’s no reason why a for-hire driver shouldn’t be able to use a car’s safety system to help with driving. But a driver using it so they can do an extra long shift? That seems like a bad idea.

What I’m Listening To While Writing TMD

The film company A24 re-released the Talking Heads concert film “Stop Making Sense” and I was able to convince my buddy to go with me even though he couldn’t remember who the Talking Heads were. It’s a great film and it was a delight to see it in a theater. As part of the A24 re-release the company got together The National, Miley Cyrus, Paramore and others to do covers of songs from the album/movie. If you like Talking Heads it’s a fun listen. I particularly like this Toro y Moi version of “Genius of Love,” which I guess is technically a Tom Tom Club song.

The Big Question

Would you like to see a Renault-Stellantis-BMW merger? Does it make sense?