Stellantis CEO Carlos Tavares takes a firm stand on the ongoing push towards electrification of the automotive market. Stellantis CEO believes external pressures on automakers to accelerate the shift to electric vehicles put many jobs and vehicle quality at risk as auto makers struggle to manage the higher costs associated with building electric vehicles .
In Tavares’s sights is the EU ban on new combustion engines from 2035 and that is already pushing the auto industry “to the limits”.
According to Tavares, interviewed today at the Reuters Next conference, the transition to electric vehicles has costs that are “beyond the limits” of what the automotive industry can bear. “What has been decided is to impose electrification on the automotive industry that involves 50% additional costs compared to a conventional vehicle – argues the top manager – and there is no way to pass on 50% of the additional costs to the consumer. final because most of the middle class will not be able to pay ”.
The scenario that lies ahead for the auto industry is theapplying higher prices and selling fewer cars, or accept lower profit margins. “These paths both lead to cuts,” Tavares cut short, explaining that his group will aim to avoid cuts by increasing productivity at a much faster pace than the industry norm. “In the next five years we will have to digest 10% productivity per year… in an industry that is used to delivering a 2 to 3% productivity improvement.”
The CEO is optimistic about Stellantis: on track to achieve synergies of 5 billion
Tavares also spoke about the path his group is pursuing. Stellantis is well on its way to achieving the promised € 5 billion synergies and possibly achieving those synergies will come at a faster pace than planned.