American car brand warns of electric vehicle market collapse
Stellantis' top executives are concerned about the prospect of an electric vehicle market collapse due to rising car prices.
A senior executive at auto giant Stellantis has warned that phasing out internal combustion engine vehicles may save the planet, but it could spell the end of the car industry unless electric car prices can come down.
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The European Union recently voted to ban the sale of internal combustion engines by 2035, while other countries, some US states and some automakers have pledged to allow or produce only electric cars by the same date or sooner. Stellantis is the leading automaker in support of this ban.
Brands need to cut the cost of making electric vehicles by 40% by 2030 or risk facing the worst, according to Stellantis’s chief product officer, Arnaud DeBoeuf. “If electrified vehicles don’t get cheaper, the market will collapse,” DeBoeuf said in an interview with Bloomberg. “That’s a big challenge.”
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The Stellantis Group currently comprises 16 brands, including major automakers such as Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Maserati, Mopar and Ram. The company’s main goal this decade is to launch 75 electric models, which it plans to achieve in part by making some components in-house and pressuring outside suppliers to lower component prices.
Locally, Stellantis is investing $229 million in its Indiana transmission plant, accelerating its drive to self-sufficiency.
But these moves will be for naught if the EV market doesn’t change. The amount consumers pay to own a “green” car is on an upward trajectory. Tesla prices continue to rise, and Ford, Rivian, and Hummer follow suit. Consumers don’t have many viable options at an affordable price.
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Stellantis CEO Carlos Tavares said that while the company will comply with the European Union’s decision to ban internal combustion engine vehicles by 2035, he feels that the decision-makers do not seem to care about whether automakers have enough raw materials to actually switch to fully electric vehicles. That is a huge issue for the entire global auto industry.
Western automakers are racing to develop electrified vehicles as Asian countries, especially China, gain dominance in battery production. To secure market share, Stellantis is in the process of building five battery factories in North America and Europe that will only start operating in 2030. Many other brands are making similar moves.
