Stellantis N.V. (STLA) shares are on the rise on Monday, despite the company’s announcement of a significant recall affecting 1.46 million vehicles worldwide. This recall, disclosed on Thursday, covers a wide range of models, including nearly 1.23 million Ram 1500 trucks from the 2019 and 2021-2024 model years in the U.S. The recall also extends to approximately 159,000 vehicles in Canada, 13,000 in Mexico, and 61,000 elsewhere, according to Reuters.
The National Highway Traffic Safety Administration (NHTSA) has identified a software malfunction as the root cause of the recall. This malfunction can potentially disable the electronic stability control system through the anti-lock brake system control module. Vehicles affected by this issue may fail to comply with Federal Motor Vehicle Safety Standard number 126, which pertains to “Electronic Stability Control Systems”.
Stellantis has assured consumers that, in the event of this issue occurring, the ABS, ESC, Adaptive Cruise Control, and Forward Collision Warning indicator lights will illuminate upon startup. This serves as a clear signal that these systems are not operational. However, the company emphasizes that foundational braking functionality will remain intact.
In addition to the Ram 1500 recall, Stellantis is also recalling approximately 33,000 Jeep Gladiator models from the 2020-2024 model years and Jeep Wrangler vehicles from the 2018-2024 model years. This recall is attributed to a potential internal short circuit issue within the instrument panel cluster.
It’s worth noting that last week, Jeep reportedly halted production of its Wrangler and Grand Cherokee models temporarily due to elevated inventory levels. Stellantis, Jeep’s parent company, confirmed these “production adjustments” at the mentioned facilities. However, the exact duration of the production halt remains unclear.
Despite the extensive recall, STLA shares are trading upwards, registering a 0.35% increase at $15.56 at the last check on Monday. This indicates that investors may be confident in Stellantis’ ability to address the recall effectively and maintain its market position.
