Stellantis does not know how to make money on electric cars

Stellantis does not know how to make money on electric cars


The head of the Stellantis corporation, Carlos Tavares, admitted during the Reuters conference that he did not know how to turn the production of electric vehicles into a profitable business. Moreover, car companies are simply “forcing” the electrification of the lineup, Tavares added, probably implying impending bans on the sale of new cars with traditional engines in many countries around the world.

Last summer, Stellantis announced the total electrification of all 14 of its car brands: Abarth, Alfa Romeo, Citroen, Chrysler, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall. For each of them, new slogans were even invented – from “Warm up people, but not the planet” for Abarth to “Now“ cool ”means“ green ”” for Opel.

Stellantis’ greening investment is set to exceed € 30 billion by 2025. As a result, by 2030, 70 percent of European and 40 percent of North American sales should come from electric cars and hybrids.

Six months after the announcement of ambitious plans, Tavares made a controversial statement. According to him, the industry does not change of its own free will, and electrification adds 50 percent to the cost of each car produced. The corporation cannot pass the additional costs onto buyers, as in this case it risks losing its middle class customers: they simply cannot afford the sharply increased car prices.

Thus, not all manufacturers will survive the transition to new mobility, Tavares added. Over the next five years, companies will have to increase productivity by 10 percent annually, up from two to three percent annually. Time will tell which player will cope with this difficult task.

Toyota, whose head is also known for criticizing the radical shift to electric cars, intends to focus on low-cost models. The Japanese want to achieve low prices due to the small capacity of the batteries, which are by far the most expensive element of electric cars. The range that manufacturers are chasing is not the main thing, and soon consumers will understand it, Toyota believes.

News tags
Add your comment

Your email address will not be published. Required fields are marked *