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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.

Ram to go on a Rampage with new small pickup?

When people look back at today's automotive industry, what do you think they'll remember us for? The emergence of hybrids? Ever more expensive and exotic supercars? The dawn of the self-driving car? All likely scenarios, but so is the blurring of lines between one bodystyle and another, giving rise to hardtop convertible coupes and crossovers of every shape and size. But one bodystyle the North American auto industry has stayed largely away from in the past couple of decades is a car nose and chassis with a pickup bed.
It's a bodystyle immortalized by the Chevrolet El Camino, but with few exceptions, we haven't seen too many of these automotive platypuses in recent years on our turf. Subaru tried with the Baja and the low-volume Honda Ridgeline soldiers along largely unchanged, but the genre's biggest adherents are still Down Under, where ute versions of the Holden Commodore and Ford Falcon live. With a few other examples scattered to the four corners of the earth, that's really about it. But if these spy shots are anything to go by, it looks like Fiat Chrysler Automobiles could be working to bring it back.
Spied undergoing testing in Michigan, what we appear to be looking at is a heavily disguised Fiat Strada being prepared - like the Fiat Ducato-based Ram ProMaster and the smaller Doblo-based ProMaster City - for Stateside duty as a Ram product. The Strada, for those unfamiliar, is a product of Fiat Automóveis in Brazil and is based on the Palio economy car. The nameplate has been around South America since 1996 and was originally designed by Giorgetto Giugiaro (long before Volkswagen monopolized his talents), and takes a more rugged approach in the form of the Strada Adventure.

Autoblog Podcast #317

Mitsubishi Mirage, Toyota thinks of beefing up US production, Marchionne on Alfa, Dart and minivans, Ford Atlas concept, Honda Gear concept
Episode #317 of the Autoblog Podcast is here, and this week, Dan Roth, Jeff Ross and Michael Harley bookend the other podcast topics with a pair from the Montreal Auto Show, the Mitsubishi Mirage and Honda Gear concept, and in between we talk about Toyota building all its US-market cars stateside, Hyundai building a Nurburgring test facility, Sergio Marchionne's latest words about Alfa Romeo, Dodge Dart powertrains and the future of Chrysler vans. Some chatter about the Ford Atlas concept finishes up the meat of the 'cast and then we wrap with your questions. For those of you who hung with us live on our UStream channel, thanks for taking the time. Keep reading for our Q&A module for you to scroll through and follow along, too. Thanks for listening!
Autoblog Podcast #317: