One of Europe’s biggest automakers warned after a landmark deal to phase out combustion engines that the industry is doomed unless electric vehicles get less expensive.
Stellantis is aiming to cut the cost of making electric vehicles 40% by 2030, Chief Manufacturing Officer Arnaud Deboeuf said Wednesday. The producer of Fiats and Peugeots plans to manufacture some parts in-house and also pressure suppliers to cut the price of their products.
If EVs don’t get cheaper, “the market will collapse,” Deboeuf said at the company’s Tremery factory in France. “It’s a big challenge.”
Stellantis is planning to introduce more than 75 fully electric models this decade and transform at least some of its French car plants to make EVs. While the company is spending big on the rollout, it’s pledging to maintain strong returns, relying on extra revenue from software and services as well as some premium vehicles.
The company announced last month an agreement with renewable battery company Samsung SDI to build a $2.5 billion electric-vehicle battery plant in Kokomo, which is expected to open in 2025 and create up to 1,400 jobs.
EV prices are going up at a dizzying pace these days. Tesla raised prices by as much as $6,000 per car this month, following similar hikes earlier this year from Rivian Automotive and Ford. Rising raw-materials costs are rendering some battery-powered models unprofitable, Ford Chief Financial Officer John Lawler said at an investor conference earlier this month.
European Union countries this week endorsed a push to eliminate carbon emissions from new cars by 2035. With EU lawmakers in favor of giving up fossil fuels in the auto industry, it’s highly likely that most manufacturers will have to shift to producing EVs in little more than a decade.
While Stellantis will comply with the decision, policymakers appear to “not care” whether automakers have enough raw materials to underpin the shift, CEO Carlos Tavares said Wednesday.
Greater demand for EV batteries between 2024 and 2027—a period before more European capacity is due to come online—will benefit Asian producers and “put at risk” cell output in the West, Tavares said during a factory visit in Metz in northeastern France.
Stellantis is developing five large battery factories across North America and Europe to produce 400 gigawatt-hours of cells by 2030. He added the company won’t rule out buying a mine to secure raw-material supplies.
Stellantis is also considering to what extent it may produce its own energy to buffer rising prices in case of supply disruptions as a result of Russian’s invasion of Ukraine.
“We have significant areas where we could put solar panels,” Tavares said.
The executives were speaking during a trip aimed at showcasing how the automaker is transforming some of its French combustion-engine and gearbox plants to make EV parts. Tavares offered no guarantees that all European factories will make the transition, saying that depends on whether the overall auto market holds up.
8 thoughts on “Stellantis warns of car market collapse if EVs don’t get cheaper”
I wonder how they are going to charge these beasts They’re investing in everything but the grid.
Details, Details…Progressive greenies never let facts get in the way of their ideology.
This is not correct. At present, $2.5 billion in Federal funds is being invested to expand grid capacity (this is not accounting for investments being made by States and utility companies). The notion that the grid is somehow fixed and hasn’t changed in years is blatantly false and baffles me. Does nobody take five seconds to gather even a basic understanding of these things?
The infrastructure plan that no Indiana GOP senator or GOP house member voted for has allocated billions of $$ to install millions of new charging stations
So? Elections have consequences.
Better build 400 giga-watt hour nuclear power plants to charge these batteries, if the intent is zero emissions EV. If not, we will have to choose between modern conveniences such as air conditioning and transportation.
That is a false dichotomy. Indiana hasn’t fully embraced solar and wind, nor energy efficiency in buildings. There are plenty of ways solar could be installed that would not reduced farmland. This is not a progressive issue- we are all being affected by a warming planet that is changing our weather and weather related flooding while storm destruction is costing the US billions of dollars to rebuild and repair. Putting less carbon in the air makes logical sense.
Installing a charging station is very expensive. The last figure I heard
was around $ 140,000 per charging station.
That’s why you’re not seeing charging stations.
Second, No business wants to invest a lot of money into a charging station
if that charger will be obsolete within a short amount of time.
From what I’ve read, the technology is changing rapidly.