THE CHARGE to electric vehicles will see job cuts, higher prices, or both, according to the world's seventh largest car maker.
Carlos Tavares, CEO of Fiat and Vauxhall producer Stellantis, warned yesterday that intensifying calls from investors and governments to transition to electric vehicles is pushing the industry to its limits.
Speaking at a Reuters conference, he said the push for car makers to go green was placing the sector under immense financial strain, which could potentially threaten jobs and vehicle quality.
The car-making chief suggested producing electric vehicles cost 50 per cent more than conventional vehicles powered by fossil fuels.
Tavares argued increasing pressure from governments and investors to shift to electric vehicles was placing car makers in a difficult situation where they would have to choose between two deeply unattractive options: charging higher prices to consumers or accepting smaller profit margins.
The higher costs were, in his view, unlikely to be embraced by middle-class consumers.
His comments follow mounting pressure from governments worldwide, with the Cop26 climate summit in Glasgow including pledges to end the sale of fossil fuel cars in developed economies by 2040.
The UK has even established its own policy to ban the sale of new petrol and diesel cars by the end of the decade.
Despite his concerns, Tavares has accelerated Stellantis' electric vehicle development, committing €30bn (£25.5bn) through 2025 into developing new electric vehicle designs, building battery plants and investing in raw materials and technology.
Meanwhile, Volkswagen is looking to strike new partnerships to build up its electric vehicle capacity.
Board member Thomas Schmall revealed yesterday at the same conference that its planned European battery cell plants and securing vital raw materials will cost as much as $34bn.
He anticipates announcements of cooperative deals over the coming weeks.
(c) 2021 City A.M., source Newspaper