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EV cost burden pushing automakers to their limits, says Stellantis' CEO Tavares
Pushing this hard could threaten jobs and vehicle quality
https://www.autoblog.com/2021/12/01/ev-development-costs-stellantis-carlos-tavares/
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. . . .
Tavares said governments should shift the focus of climate policy toward cleaning up the energy sector and developing electric-vehicle charging infrastructure. . . .
Tavares has accelerated Stellantis' electric vehicle development, committing 30 billion euros through 2025 to developing new electric vehicle architectures, building battery plants and investing in raw materials and new technology.
On Tuesday, Stellantis said it had invested in solid-state battery startup Factorial alongside German automaker Daimler AG.
"We can invest more and go deeper in the value chain," Tavares said. "There may be other (investments) in the near future."
Also ABG:
Auto execs expect EVs will own over half the market by 2030
The most bullish executives were in the United States and China
https://www.autoblog.com/2021/11/30/electric-cars-half-market-share-2030/
Auto industry executives expect electric vehicles will make up just over half of new vehicle sales in the United States and China by 2030, and could do so without receiving government subsidies, according to a new survey by accounting and consulting firm KPMG.
But combustion vehicles, including hybrids, are expected to retain a significant share of most major vehicle markets for years to come, according to KPMG's latest annual survey of 1,000 auto industry executives.
The speed at which automakers can phase out combustion engines and the carbon dioxide they emit is a pivotal issue for the global auto industry. A group of automakers and countries signed a statement earlier this month calling for phase-out of combustion vehicles globally by 2040, and by 2035 in richer nations.
But the world's two largest automakers by sales, Volkswagen and Toyota, and three of the world's biggest vehicle-buying nations — China, the United States and Germany — did not sign on.
The KPMG survey of auto industry executives found that they believe that electric vehicles will account for 52% of sales by 2030 in the United States, China and Japan, with lower percentages for Western Europe, Brazil and India. But behind those aggregate forecasts, industry executives have widely varying views.
For China, some auto industry executives expect EV sales by 2030 to be less than 20% of the market, while others believe the world's largest market could be 80% electric by then.
Electric vehicle sales around the world have been fueled so far by government subsidies. But 77% of the respondents to KPMG's survey said electric vehicles can achieve mass adoption within 10 years without government aid as battery costs drop to parity with petroleum-fueled engines. However, 91% of auto executives said they support government subsidies. . . .