Automotive News Europe — 2024-05-30
Automotive Industry
Stellantis CEO Carlos Tavares said the need to cut EV costs could mean that the supplier base will shift to lower-cost countries from the West.
The transition to electric vehicles will impose a "significant burden" on suppliers, Stellantis CEO Carlos Tavares said, as Western automakers race to cut costs and compete with Chinese peers.
Tavares said the challenge for automakers was to sell EVs, whose production costs are 40 to 50% higher than cars with internal combustion powertrains, at the same price as equivalent ICE models. This forces them to cut costs at every level of their operations, including supply chains and logistics.
"You are going to see a huge shift of the supplier base. The sourcing will move from the Western world to the best-cost countries," he said Wednesday, 29 May 2024, during the Bernstein Strategic Decisions conference.
"The EV race has become a cost-cutting race," he added.
Tavares said the EV transition was being held back by affordability, with customers reluctant to buy expensive electric cars unless supported by governments through incentives.
"The Western world consumer is telling the Western world government, OK, there is the global warming issue, fine, but if you don't help me, I will not help you," he said.
Stellantis will continue to bet on multi-energy platforms -- those created for EVs but that can also be used for ICE models, including hybrids -- to retain flexibility in its ranges.
"Today multi-energy is good to face uncertainty," Tavares said.
In an effort towards make cars more affordable, Stellantis plans to launch a Jeep model in the US costing less than $25,000, following its €23,300 ($25,200) Citroen e-C3 small EV in Europe.
Stellantis also has a joint venture with China’s Leapmotor that will allow it to sell the Leapmotor T03 small electric car for less than €20,000 in Europe.
Asked about potential M&A deals, Tavares said his main goal was to keep Stellantis in strong business shape. "If an opportunity comes, we will of course consider it, but we have to be fit at the moment where that opportunity is passing by," he said.