Auto giant Stellantis warns auto market will collapse if EV prices don't drop

Stellantis, one of Europe's largest carmakers, has warned that the auto industry is doomed unless electric vehicles become cheaper.

Stellantis' chief manufacturing officer, Arnaud Deboeuf, said Wednesday that the company aims to reduce the cost of making electric vehicles by 40 percent by 2030.

Stellantis, a multinational automaker headquartered in Amsterdam, the Netherlands, will be formed by the merger of Italian-American company Fiat Chrysler Automobiles and French company PSA Peugeot Citroën in 2021, with each side contributing 50/50.

The group plans to manufacture some parts in-house and force suppliers to lower the prices of their products.

Deboeuf stated:

If EVs don't get cheaper, the market will collapse, which is a huge challenge.

Stellantis plans to launch more than 75 all-electric models within a decade and revamp at least some of its French car factories to produce electric vehicles. While the company has invested heavily in launching new electric vehicles, it has pledged to maintain strong revenue and profits on the back of software and services, as well as additional revenue from some premium vehicles.

This month, in support of the group’s long-term strategy, the Stellantis Group invested 33 million euros in its two global vehicle testing centers to deliver best-in-class electric vehicle performance and the highest level of autonomous vehicle technology, while ensuring that customers can Safe and reliable technology.

This investment and other R&D capital investments will expand the Stellantis Group's ability to plan for the future of mobility globally, accelerate its transformation into a sustainable mobility technology company, and drive the Group towards the goals of its "Dare Forward 2030" strategic plan, In particular, reducing carbon emissions by 50% from 2021 levels by 2030 and achieving net zero carbon emissions by 2038.

Most manufacturers are likely to have to switch to producing electric vehicles within a decade or so as the EU aggressively pushes the auto industry to move away from fossil fuels.

Stellantis will abide by the decision, but CEO Carlos Tavares said:

Policymakers in the EU don't seem to care whether automakers have enough raw materials to support the shift.

He believes greater demand for batteries from electric vehicles means battery production in the West is "at risk" between 2024 and 2027.

Currently, Stellantis is building five large battery factories in North America and Europe to produce 400 GWh of batteries by 2030. He added that the company did not rule out buying mines to secure the supply of raw materials.

Today, the price of electric vehicles is rising at a rapid rate.

In the middle of this month, Tesla significantly raised the price of all electric vehicle products in the U.S. market.

In 2021, Tesla cars will increase in price almost every month. Since then, the company has slowed price increases in early 2022, with vehicle prices entering a plateau. The last time Tesla’s car price increased significantly was in March 2022, and in April, some long-range models saw a small price increase.

In the middle of this month, Tesla adjusted prices for all of its models. Among them, the Model 3 increased the price by $2,000, the smallest increase; the Model X increased by $6,000.

U.S. electric car maker Rivian and U.S. auto giant Ford made similar price hikes earlier this year.

Rising raw material costs have made some battery-powered models unprofitable, leading to higher prices, Ford's chief financial officer said.