Stellantis earlier this year made a massive commitment towards electrifying its entire portfolio of vehicles by the mid-2030s across its brands. Being one of the last major automotive conglomerates to make that bet. Its CEO Carlos Tavares feels forced to make this transition as the entire industry is making this tectonic shift. In addition to this, he still hasn't figured out how to make money from these electric vehicles. Tavares who came from the FCA part of Stellantis before the merger with the PSA group, comes from a group that was woefully unprepared for EVs, but after the merger, he has shifted goalposts.
"What has been decided is to impose on the automotive industry electrification that brings 50 percent additional costs against a conventional vehicle. There is no way we can transfer 50 percent of additional costs to the final consumer because most parts of the middle class will not be able to pay," he said at the Reuters conference earlier this
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In particular, Tavares is aggrieved about some of the deadlines around the disbanding of the internal combustion engine in certain markets like the UK and many parts of Europe which is home to Stellantis. He warned that some carmakers will fail to make this shift and die trying.
"Over the next five years we have to digest 10 percent productivity a year ... in an industry which is used to delivering 2 to 3 percent productivity improvements. The future will tell us who is going to be able to digest this, and who will fail. We are putting the industry on the limits," he explained.
Compared to some of the other automakers, Stellantis hasn't bet the farm on EVs with its modest $34 billion investment. Compared to it, the Volkswagen group has invested upwards of $80 billion and already has a litany of EVs across its brands at different price points.
