Stellantis Boss: The Auto Industry Is in 'Survival Mode'

Carlos Tavares says Stellantis needs to reach cost parity between gas and electric cars to stay alive.

Carlos Tavares at the inauguration of the new Stellantis Pro One offices in Mirafiori

Photo by: Stellantis

Adrian Padeanu

By: Adrian Padeanu

Sep 18, 2024 at 3:34am ET

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Stellantis is in quite the pickle in the United States. Dealers aren't exactly thrilled with how things are going with the "degrading" American brands, leading to an ongoing "disaster." The automotive conglomerate is having different problems in Europe, where regulators are pressing the automaker to sell more EVs while governments reduce and eliminate incentives.

That puts Stellantis (and rival companies) in a difficult situation since EVs are generally still more expensive than ICE cars. Automakers active in Europe will have to lower their fleet emissions even more from 2025. Otherwise, they risk huge fines. Decarbonizing the fleet can be done with cleaner combustion engines and a richer variety of hybrids, but the substantial benefits come from selling more EVs.

"To stay alive we need to achieve cost parity between electric cars and thermal cars, but another chapter opens here. We operate in a geographical region animated by chaos and it is difficult to make predictions. Governments have decided to reduce purchase incentives and this is holding back the market."

"The automotive industry is in a kind of survival mode: we are beyond fear. We cannot complain, we cannot hesitate, we have to concentrate our efforts to stay alive. To stay alive we need to achieve cost parity between electric cars and thermal cars, but another chapter opens here. We operate in a geographical region animated by chaos and it is difficult to make predictions. Governments have decided to reduce purchase incentives and this is holding back the market."

Indeed, the EV market is slowing down in Europe, so much so that production of the Fiat 500e has been paused for four weeks due to weak demand. The market share of fully electric cars declined in the first seven months of 2024 in the European Union (plus the UK and EFTA countries), from 14.3% to 13.8%, according to the European Automobile Manufacturers Association (ACEA).

Despite these hurdles, Tavares doesn't want the EU to delay the new CO2 targets. He told Agence-France Presse that "it would be surreal to change the rules now." In his interview with our Italian colleagues, the head honcho claimed Stellantis has taken all the necessary measures to keep up with stricter regulations:

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"My cars are ready, my people are ready, and our factories are ready. Why delay? Is global warming no longer a problem? Right now half of Portugal is burning."

The EU still wants to ban sales of new cars that generate harmful emissions from 2035 but is likely to allow those powered by combustion engines that run on carbon-neutral synthetic fuels. Whatever will happen in Europe is going to have global consequences. Not being able to sell a gas-powered model in the EU could lead to that car's demise worldwide if the economies of scale are not reached.

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