The costs of the electrical transition they push the boundaries of what the auto industry can support. Word of Carlos Tavares, the CEO of Stellantis, who argued that external pressures on carmakers to accelerate the switch to electric vehicles potentially threaten jobs and vehicle quality. This is obviously because the costs derived from the production of electric vehicles are higher and consequently more complicated for companies to manage: in a nutshell, governments and investors want car manufacturers to accelerate the transition to electric vehicles, but they do not take into account the expense that they have to support.
“What has been decided is to impose electrification on the automotive industry which entails additional costs of 50% compared to a conventional vehicle – the words of Tavares reported by Reuters – It cannot be expected that this 50% additional cost can be repaid by the final consumer, because most of the middle class will not be able to pay ”. For automakers around the world, therefore, there are two solutions, according to Tavares: to charge higher prices and sell fewer cars, or to accept lower profit margins. “Manufacturers need time to test and ensure that the new technology works – he added – Pushing to speed up this process will be alone counterproductive. It will lead to quality problems and other types of problems ”.
Either way, Tavares wanted to reassure that Stellantis will do anything for avoid cuts, increasing productivity at a much faster rate than the industry average. “In the next five years we will have to increase productivity by 10% per year, in an industry that is used to delivering a productivity improvement of 2 to 3% – concluded the number one of the group born from the merger between FCA and PSA – The future will tell us who will be able to overcome this challenge and who will fail. We are pushing the industry to the limits“.
#Tavares #Electricity #costs #limits #FormulaPassionit