The CEO of Stellantis, Carlos Tavares, stated in an interview that the electric cars are 40% to 50% more expensive to build than traditional models with an internal combustion engine. Therefore, manufacturers will charge higher prices for vehicles, which would result in lower unit sales.
In this article, you will learn more about the electric vehicles that are more expensive to manufacture and what this changes in your life as a consumer. Know more!
see more
Alert: THIS poisonous plant landed a young man in the hospital
Google develops AI tool to help journalists in…
Read more: INSS review: How and in which cases to apply
What does that mean?
The CEO of Stellantis ensures that the costs of pushing towards electric vehicles could end up making the auto industry unsustainable. According to him, these costs are beyond the limits that automakers support. Therefore, as previously mentioned, manufacturers will be able to charge higher prices for vehicles, since, according to Tavares, cuts would be inevitable.
The executive also claims that Stellantis will have to further reduce internal costs and find a common denominator with its suppliers, who manage 85% of the vehicle parts chain. In addition, to reinforce how complicated the situation is, he also guarantees that, with the extra costs, companies would not be able to profit from the sale of electric vehicles.
What changes for the consumer?
Clearly, the industry's push towards electrification results in 50% additional costs for the company. However, it is not possible to pass 50% of the additional costs on to the end consumer, as most will not be able to afford an EV. The pressure on automakers struggles to reverse the high costs of building these cars.
Still according to the CEO, Stellantis intends to avoid cuts by increasing productivity at a much faster pace than normal in the auto industry. Therefore, in the next five years, the company will have to digest 10% of productivity per year in an industry that usually delivers 2 to 3% of productivity improvement. Union leaders in Europe and North America follow the remarks regarding the loss of tens of thousands of jobs.
