Increase in EV Prices Threatens Electromobility: Stellantis CEO
Home > Automotive > Article

Increase in EV Prices Threatens Electromobility: Stellantis CEO

Photo by:   Stan Petersen
Share it!
Rodrigo Andrade By Rodrigo Andrade | Journalist & Industry Analyst - Fri, 01/06/2023 - 15:32

Automakers warn of potential closings of auto plants during 2023 should EV prices keep increasing, shrinking the market to pre COVID-19 pandemic levels. Carlos Tavares, CEO, Stellantis, highlighted that automakers and policy makers must sort out ways of reducing EVs prices, as they are a critical consideration for many potential buyers.

High inflation and the lack of affordability policies and packages remain as major issues for automakers, said Tavares during the Consumer Electronic Show (CES). Last month, Stellantis announced that its assembly plant in Illinois, the US, will stop operations “indefinitely” in February. Tavares stated that this “will happen everywhere as long as we see high inflation of variable costs,” according to Reuters.

EVs still cost about 40 percent more than Internal Combustion Engine (ICE) models and automakers must absorb this higher production cost, which puts the market in an unfavorable position, said Tavares. If the market continues to shrink, new plants will start to close and “some unpopular decisions will have to be made,” he added.

Chinese Automakers Enter the EU’s Automotive Sector
Tavares warned about the impact that China’s automotive companies could have on the EU’s auto industry. If politicians in the region do not implement the right policies, a “terrible fight” will occur, Tavares told Automobilwoche, according to Europe Autonews.

"The price difference between European and Chinese vehicles is significant. If nothing is changed in the current situation, European customers from the middle class will increasingly turn to Chinese models. The purchasing power of many people in Europe is decreasing noticeably,” said Tavares.

The EU must make “unpopular” decisions as regulations make it hard for regional automakers to compete with the lower priced vehicles made in China. Tavares highlighted that these policies make EVs assembled in the EU about 40 percent more expensive than similar Chinese models.

Tavares explained the two possible paths the region could take. "If you keep the European market open, then we have no choice: we have to fight the Chinese directly. And that applies to the entire automotive value chain." The second option is to “re-industrialize” the continent, which would mean transforming the current trade policies.
 

In 2022, Stellantis Mexico announced an ambitious plan for this year, which includes launching 16 new models, as reported by MBN. "We are going to have a product for every segment of SUV's, from entry-level to luxury products, plus commercial," said Carlos Quezada, Commercial Vice President, Stellantis.

Photo by:   Stan Petersen

You May Like

Most popular

Newsletter