NEW DELHI, Nov 24 (Reuters) - Fiat parent Stellantis
has concluded it can't currently make affordable
electric vehicles (EVs) in Europe and is looking at lower-cost
manufacturing in markets such as India, its chief executive told
If India, with its low-cost supplier base, is able to meet
the company's quality and cost targets by the end of 2023, it
could open the door to exporting EVs to other markets, said
Carlos Tavares, CEO of the group whose brands also include
Peugeot and Chrysler.
"So far, Europe is unable to make affordable EVs. So the big
opportunity for India would be to be able to sell EV compact
cars at an affordable price, protecting profitability," Tavares
told reporters at a media roundtable in India late on Wednesday.
Stellantis is investing heavily in EVs and plans to produce
dozens in the coming decade, but Tavares warned last month that
affordable battery EVs were between five and six years away.
On his first visit to India since taking over as Stellantis
CEO, he said the company was still working out a plan regarding
EV exports from the country and had not yet taken any decisions.
Tavares' possible bet on India comes after American
carmakers Ford and General Motors have exited the
world's fourth-largest car market, after failing to make money
and break the dominance of Japan's Suzuki Motor Corp
and South Korea's Hyundai Motor.
It also comes as Chinese EV makers are making inroads into
Europe, aiming to win over buyers with more affordable cars
having already stolen a march on most foreign rivals in China,
the world's biggest market for EVs.
Stellantis is the latest to refocus its strategy in China
where it now plans to be a niche player through its Jeep and
Maserati brands, after it said its Jeep joint venture in the
country would file for bankruptcy.
"There is a growing tension between China and the Western
world. That is going to have a consequence in terms of business.
The power that is best placed to leverage this opportunity is
obviously India," Tavares said.
India, where Stellantis sells its Jeep and Citroen brands,
accounts for a fraction of the carmaker's global sales, but
Tavares said the company was not chasing volume and instead
wanted to ramp up slowly and profitably.
Tavares has previously said he expects revenues in the South
Asian nation to more than double by 2030 and operating profit
margins to be in double-digits within the next couple of years.
The carmaker plans to launch its first EV in India - an
electric model of its Citroen C3 compact car - early next year.
Stellantis already makes its own electric motors and battery
packs, and also has plans to make battery cells. In India, too,
Tavares wants to locally procure EV components, including
batteries so it can be competitive on cost and price.
"The customs duties to import a car in India are sky high.
Which means if you want to have an affordable EV, it has to be
made in India with Indian suppliers and components," he said,
adding the company would need to source at least 90% of parts
locally to be competitive.
"EV today is mostly an affordability problem," he said.
"It's not about technology."
(Reporting by Aditi Shah; Editing by David Holmes and Mark