“Stellantis Holds Firm: No Participation in EV Price-Cutting Bloodbath”

Stellantis CEO Carlos Tavares has emphasized the company’s commitment to profitable electrified vehicles (EVs) and outlined the future direction in a recent media roundtable. Despite Ford’s F-150 Lightning production cutback hinting at an EV demand issue in the U.S.,

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Stellantis

Stellantis remains steadfast in its Dare Forward 2030 plan, aiming to sell only EVs by 2030. The plan, with four new vehicle platforms and eight EV launches for North America from 2024 to 2026, includes models like the electric Dodge Charger and Jeep Wagoneer S SUV.

Tavares highlighted two potential factors that could lead to a change in direction: election results and shifting customer demand. Political outcomes in the U.S. and European parliament elections could impact the pace of Stellantis’ EV rollout. Tavares has prepared for two scenarios, either speeding up or slowing down EV efforts based on the political landscape. Additionally, changes in customer demand, as evidenced by Ford’s pullback and adjustments from other automakers, might influence the company’s strategy.

Emphasizing profitability, Tavares stated that Stellantis currently makes money on its electrified vehicles, primarily plug-in hybrids. While acknowledging the cost challenge of purely electric cars, which currently cost 40% more to produce than internal combustion vehicles, Tavares expects efficiency improvements and cost reductions over 3-4 years to bring electric vehicles to cost parity.

Crucially, Tavares emphasized that Stellantis won’t engage in a profit-eroding race to the bottom, emphasizing the need for continued profitability to invest in new technology. The industry could face a “bloodbath” if companies sacrifice profits by cutting prices excessively. While Stellantis remains profitable, Tavares highlighted the potential risk for other companies to fall into the red, making them takeover targets. Tavares did not specify potential acquisition targets or Stellantis’ interest in further acquisitions.

Tavares underscored the importance of affordability, signaling an intention to adjust prices in response to changing conditions. However, he ruled out accepting losses to achieve affordability, emphasizing Stellantis’ commitment to maintaining profitability as a key element of its strategy.