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EV cost burden pushing automakers to their limits, says Stellantis' CEO Tavares

DETROIT — Stellantis CEO Carlos Tavares said external pressure on automakers to quickly shift to electric vehicles potentially threatens jobs and vehicle quality as producers struggle with EVs' higher costs. Governments and investors want car manufacturers to speed up the transition to electric vehicles, but the costs are "beyond the limits" of what the auto industry can sustain, Tavares said in an interview at the Reuters Next conference released Wednesday. "What has been decided is to impose on the automotive industry electrification that brings 50% additional costs against a conventional vehicle," he said. "There is no way we can transfer 50% of additional costs to the final consumer because most parts of the middle class will not be able to pay." Automakers could charge higher prices and sell fewer cars, or accept lower profit margins, Tavares said. Those paths both lead to cutbacks. Union leaders in Europe and North America have warned tens of thousands of jobs could be lost. Automakers need time for testing and ensuring that new technology will work, Tavares said. Pushing to speed that process up "is just going to be counter productive. It will lead to quality problems. It will lead to all sorts of problems," he said. Tavares said Stellantis is aiming to avoid cuts by boosting productivity at a pace far faster than industry norm. "Over the next five years we have to digest 10% productivity a year ... in an industry which is used to delivering 2 to 3% productivity" improvement, he said. "The future will tell us who is going to be able to digest this, and who will fail," Tavares said. "We are putting the industry on the limits." Electric vehicle costs are expected to fall, and analysts project that battery electric vehicles and combustion vehicles could reach cost parity during the second half of this decade. Like other automakers that earn profits from combustion vehicles, Stellantis is under pressure from both establishment automakers such as GM, Ford, VW and Hyundai, as well as start-ups such as Tesla and Rivian. The latter electric vehicle companies are far smaller in terms of vehicle sales and employment. But investors have given Tesla and Rivian higher market valuations than the owner of the highly profitable Jeep and Ram brands. That investor pressure is compounded by government policies aimed at cutting greenhouse gas emissions. The European Union, California and other jurisdictions have set goals to end sales of combustion vehicles by 2035.

2015 Ram ProMaster City Wagon [w/video]

At the tail end of 2014, I brought you a First Drive feature on the new Ram ProMaster City cargo van, a remarkably solid entry into the exploding light-commercial segment. While I was down in Austin, TX playing with those box vans, I also had time to sample Ram's slightly more civilized version, the ProMaster City Wagon. From the driver's seat forward, the Wagon and Tradesman (Ram's name for the cargo version) are practically the same, but the former trim is a lot different in the back section. The rear gets a folding, three-passenger-wide bench seat in the middle, and a carpeted cargo area behind that. This isn't exactly a new formula for the market; Ford has been selling a passenger-friendly five-seat version of its Transit Connect for a few years now. But the baby Ram is another competitor for small business owners in need of shuttles and such, or individuals who place a premium on interior space over creature comforts. Drive Notes Just as with the cargo version, the 178 horsepower and 174 pound-feet of torque from the 2.4-liter four-cylinder makes the City Wagon feel ably fast in urban traffic. Our short driving loop (along with the dozens of extra miles I logged around Austin), didn't offer much in the way of high-speed cruising, but I did dice with other city drivers confidently. The engine pulls adroitly if you really trample the throttle, though it certainly won't tempt you to race that punk kid at the red light. Handling is nippy relative to the size of this small van, with a tight turning circle and quick turn-in around town. The added weight in the back offered by the seats and trim – not quite 200 pounds – also helps to dampen the ride and improve smoothness over the road. The Short Cut video at the bottom of the page was shot with a cargo version of the City, but it should give you the general idea about the nimbleness herein. The extra seats, carpeting and stuff found inside the wagon also do a successful job of masking the strained sound of the engine and exhaust when you do rip through those nine gears. The ProMaster City Wagon is a significant number of decibels quieter than the Tradesman always. That said, no one will ever mistake this Ram for a Lexus; wind and road noise can be heard at all speeds. Ram has effectively cut the cargo area in half compared to the box van version; though bias seems to have been given to cargo over passengers.

Say goodbye to the Dodge Dart and Chrysler 200

Fiat-Chrysler CEO Sergio Marchionne outlined an update to the company's five-year business plan Wednesday, and among the changes, the Dodge Dart and Chrysler 200 sedans will soon be phased out. The company's presentation to investors states that the "market shift from cars to trucks and UVs [utility vehicles is] now seen as permanent shift in demand," and FCA wants to respond as quickly as possible. Killing the 200 and Dart will allow FCA to build more Jeep and Ram models at the Sterling Heights, MI, and Belvidere, IL, plants where the sedans were produced. We already knew FCA was planning to shift 200 and Dart production to Mexico, to free up the Sterling Heights facility for Ram 1500 production, and the Belivdere site for Jeep Cherokee output. The Cherokee will move from its current home in Toledo, OH, to allow for increased Wrangler production. It's no shock that FCA wants to shift its focus to crossovers and trucks. In December 2015, for example, combined sales of the Dodge Dart and Chrysler 200 were 15,310. The Jeep Cherokee, which uses the same platform as the Dart and 200, outsold both models combined, with 24,049 sales. Both the Dart and 200 had troubles from the beginning. Marchionne recently blamed designers for the 200 not receiving a Consumer Reports 'recommended' rating, and the Dart was one of the lowest-scoring cars in a CR reliability study. Featured Gallery 2013 Dodge Dart: Review View 27 Photos Related Gallery 2015 Chrysler 200 View 43 Photos Image Credit: Copyright 2016 Drew Phillips / AOL Chrysler Dodge Jeep RAM FCA confirmed