Carlos Tavares, CEO of Stellantis, affirms that it will be unfeasible to manufacture cheap electric cars in Europe

Carlos Tavares, CEO of Stellantis, affirms that it will be unfeasible to manufacture cheap electric cars in Europe

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Carlos Tavares, CEO of the Stellantis groupHe has us used to his controversial statements. Whether it’s his criticism of the new emission standards, his warnings about Chinese competition or his concern for the future of the European industry, the manager’s comments always have a tail.

In order not to lose good manners, Tavares has left us some controversial opinions during his time in Congress car symposium in Bochum (Germany). According to the executive, the manufacture of affordable electric cars will be unfeasible in Europe due to a less competitive cost structure than that of China and other countries.

For this reason, Tavares believes that European industry is in danger of losing competitiveness, which would cause the old continent to go from being a technological power to a “tourist destination for Chinese and Americans”. Furthermore, he does not consider that repatriating production from regions with lower wages is the solution to this problem.

This is especially striking if we take into account that he himself recently asked the European authorities to adopt protectionist measures against Chinese competition. “We should ask the European Union to impose the same conditions in Europe for Chinese manufacturers that we Western manufacturers compete with in China. The European market is completely open to the Chinese and we don’t know if their strategy is to gain market share at a loss and increase their price later.

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Stellantis has an operating margin of 13%

Tavares’ response to this complex situation is “smart work”, a rather ambiguous phrase that could mean anything. Yet the leader of the planet’s fourth-largest auto group never gives up without a thread, and is probably paving the way for what comes next.

With an operating margin of 13% (and counting), Stellantis isn’t interested in making cheap, unprofitable cars in Europe, but it’s also not interested in seeing increasingly competitive Chinese rivals jeopardize its business with aggressively priced solvent products.

The solution for which Tavares seems to bet? He will impose more tariffs on Chinese-sourced cars while Stellantis shifts production of its cheaper models to regions with low wages such as India or Morocco, against which it does not ask for protectionist measures. On the other hand, brandishing the threat of low European competitiveness can serve as the perfect excuse for new adjustments in its workforce, including measures of “flexible” working conditions and dismissals.

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Source | Automobil-Industrie