Stellantis calls on Toyota and Bosch suppliers for hybrid technology for Jeep

DETROIT — Jeep manufacturer Stellantis is leveraging technologies from auto suppliers for its new hybrid SUVs as the market for more fuel-efficient vehicles is expected to continue to grow, CNBC has learned.

The transatlantic automaker’s first-ever Jeep hybrid SUV for North America, its recently launched Cherokee, features a system from a Toyota-backed company called Blue Nexus, while its upcoming extended-range electric vehicles, or EREVs, use major technologies from Bosch, the world’s largest automotive supplier.

It’s not uncommon for automakers to use components from suppliers, but it’s less common for key systems or technologies, especially those developed by a competitor like Toyota.

But Stellantis’ move is a prime example of a broader shift away from the all-electric vehicle market and a way in which automakers can bring hybrid vehicles — which were increasingly in demand even before the oil price surge — to market more quickly, potentially at a lower cost of capital. Many automakers have already lost billions of dollars due to massive spending on electric vehicles, including developing and producing many technologies themselves.

The Jeep Cherokee, which uses Blue Nexus’ two-motor electric continuously variable hybrid drivetrain, and the upcoming Jeep Grand Wagoneer EREV are major launches for the automaker this year, especially as it attempts to regain market share in the United States. Stellantis also plans to use the EREV system on its Ram pickup trucks.

“The electrification trends are pretty stable. The hybrid trends are growing,” Richard Cox, senior vice president of Jeep brand operations, told CNBC at a recent media event for the 2026 Cherokee. “So I think it’s a big step in the right direction.”

Officials at Stellantis and the auto parts makers declined to comment on the tie-ups, but sources at each company who were not authorized to speak publicly about the partnerships confirmed the details to CNBC.

The two hybrid systems work differently. The Cherokee is more of a traditional hybrid vehicle, just like many Toyota models, including the Prius.

Upcoming EREVs, meanwhile, drive like fully electric vehicles until a motor starts and functions as a generator to power the vehicle’s electric motors when the vehicle’s battery is depleted. The engine powers the electric motors rather than the vehicle itself.

Both hybrid systems use Stellantis engines and have been integrated to meet the company’s own standards and driving dynamics, according to two automaker sources.

Both systems are also expected to significantly improve the fuel economy of vehicles, including the Cherokee, which, at 37 mpg combined, is the most fuel-efficient non-plug-in Jeep ever produced for the United States.

“Consumers have accepted [full-hybrid electric vehicle] technology through improved fuel economy, [a] wide range of vehicles to choose from, and as they do not require lifestyle changes to benefit from the system,” said Eric Anderson, S&P Global Mobility associate director for light vehicle powertrain forecasting in the Americas.

Stellantis and other automakers have invested billions of dollars in recent years to develop fully electric vehicles to meet federal regulations and unfounded consumer demand, but most have given up on those investments and are eyeing hybrids to increase vehicle fuel economy and meet customer expectations.

Stellantis last month disclosed $26 billion in charges related to its electric vehicle plans, while its Detroit rivals also announced writedowns. Ford engine said it would book $19.5 billion in special charges as it withdraws its electric vehicle plans, while General engines said its writedown would amount to $7.6 billion due to changes to electric vehicles.

Peter Tadros, Bosch’s president of electrical solutions for North America, said the automaker has received an influx of inquiries about its hybrid systems as automakers look to move away from electric vehicles and to market quickly, with a reliable system and partner.

“There’s certainly a lot of interest in these systems,” he told CNBC. “What is very evident over the last few years is that sales of hybrids have increased regardless of what is provided for in the regulations, regardless of political direction. This is a steady increase in the market.”

Led by Toyota, U.S. hybrid sales grew from 7.3% of the market in 2023 to 12.6% last year, according to S&P Global Mobility. This compares to sales of fully electric vehicles during this period, increasing from 7.5% to 8%.

S&P Global Mobility expects hybrid electric vehicles to account for 18.4% of U.S. sales this year, while fully electric vehicles are expected to account for 7.1%.

Tadros declined to comment on any relationship with Stellantis, citing company policies, but said it was common for Bosch to work closely and partner with automakers to launch new vehicles and products.

“There is no silver bullet, and everyone comes at it from a different direction,” he said. “It depends on each person [automaker]where their strengths are, where their equipment is and how they best use it, and that’s their starting point.

Bosch offers what the industry calls “off-the-shelf” components, which the company then integrates with each automaker’s particular use case. Besides the EREV, Bosch also offers components for more traditional hybrids as well as plug-in hybrid electric vehicles that operate similarly to EREVs but drive more like traditional gasoline vehicles rather than electric vehicles.

Stellantis, more than some other automakers, has a history of partnering with other industry players to reduce research and development costs and capital. It has a long-standing partnership with German car manufacturer ZF for transmissions and axle systems.

“They often rely on vendor partners for these kinds of things,” said Sam Abuelsamid, vice president of market research at communications and consulting firm Telemetry. “The advantage is that you can take something that maybe an investment has already been made in, developed by a vendor. By taking a product off the shelf, you potentially get it to market more quickly.”

Abuelsamid said disadvantages include that parts potentially do not integrate seamlessly with vehicle systems and that the company does not have control over the supply chain for key components.

In the 2000s, as the Toyota Prius gained traction in the United States, the Japanese automaker entered into agreements with Ford and Nissan Motor to license or use certain hybrid technologies for their vehicles. But those deals and the vehicles that were produced from them, like the Ford Escape and Nissan Altima hybrids, didn’t last long.

Blue Nexus is a joint venture established in 2019 between Japanese automotive suppliers Denso and Aisin, both of which are part of Toyota Motor’s parent group. It sells electrified components such as electronic axles, or electric axles, and hybrid systems such as the Toyota Hybrid System II, which includes the two-motor electric continuously variable hybrid transmission used by the Jeep Cherokee.

A representative for Blue Nexus could not be reached for comment. Toyota, Denso and Aisin declined to comment or did not respond to requests for comment.