Ram Canceled A Heavy-Duty EV Pickup And Now Two Suppliers Are In Court Fighting Over $25 Million

When a major automaker scraps plans for a new vehicle, it often falls to the suppliers to eat a lot of the costs associated with research and development. When Stellantis decided it no longer wanted to produce an all-electric heavy-duty Ram pickup, the trickle-down effect was that suppliers Valeo North America and American Axle & Manufacturing lost tens of millions of dollars in the process, reports Automotive News. Now, a $25 million legal battle has kicked off between the two suppliers with Valeo seeking the money from AAM for its refusal to cover the sunk costs. Between 2022 and 2024 Valeo spent tens of millions to develop electric motors and inverters for American Axle to use in its “e-beams” destined for the now-scrapped 2027 heavy-duty Rams, the company alleges in its suit. 

The two suppliers began negotiations in 2022, and Valeo worked alongside AAM to push the project into production. When Stellantis cancelled the program it was on American Axle to close out the project with its subcontracted suppliers, in this case Valeo. Valeo says American Axle entered an “integrated, comprehensive agreement” for it to design and manufacture electric motors, controllers, inverters, and software, but after 13 months cancelled the program and refused to reimburse Valeo for services rendered. For its part AAM claims that no enforceable contract exists between the two suppliers, and could not breach a contract that doesn’t exist, filing a motion to dismiss the case.

“From the outset, starting from sourcing and nomination, through AAM’s termination of the program in April 2024, Valeo worked diligently in coordination with AAM to bring the program to fruition,” according to the lawsuit filed on Valeo’s behalf.

Three years ago Stellantis was so confident in its ability to push all of its brands toward an electric future, even going so far as to ask supplier American Axle to develop an all-electric heavy-duty pickup driveline. With lackluster demand on already extant electric pickups like the Ford F-150 Lighting and GM’s Silverado and Sierra twins, it seems Stellantis is more than happy to walk back its promises and cancel future development projects. Ram has already pushed back production of its much-hyped all-electric Ram REV, while getting the hybrid Ramcharger version (above) ready for production ahead of schedule. 

The lawsuit, if not settled in the near future, will head to a jury trial in 2026.