The demand for electric vehicles (EVs) is rising rapidly, raising concerns among major automotive marques around the world. Stellantis Group is one such consortium whose CEO has voiced his opinion about this development.
At the Reuters Next conference, Stellantis CEO Carlos Tavares claimed that the companies are being pressured by governments and stakeholders to inorganically expedite the production of EVs. He added that the artificial enforcement of EV normalization carries costs that are “beyond the limits of what the auto industry can sustain.”
The companies are being pushed to inject exhaustive resources to adapt to the requirements of the governments and investors. The extension and upgrade of production plants result in higher operational costs, and the sudden shift is also placing many jobs and product quality at risk.
Tavares highlighted that the high cost of manufacturing will directly impact the prices of vehicles and that the limited manufacturing infrastructure would likely stunt the vehicle supply, causing difficulty for the car buyers.
“Over the next five years, we have to digest 10% productivity [of Internal Combustion Engine vehicles] a year in an industry which is used to delivering 2 to 3% productivity improvement,” Tavares stated.
The future will tell us who is going to be able to digest this, and who will fail. We are putting the industry on the limits.
Conclusively, Tavares stated that, rather than rushing the development EVs, “the governments should shift the focus of climate policy toward cleaning up the energy sector and developing electric-vehicle charging infrastructure.”