Stellantis doesn’t want to get into the price war unleashed by Tesla. In recent months, the American brand has made several price cuts on its models, which has worried its main competitors who are determined to electrify their ranges.
“The price of our vehicles is much lower than that of Tesla”
“Stellantis doesn’t need to answer Tesla because the price of our vehicles is much lower than Tesla’s. So for us it’s not a pressing question, it’s a question for Tesla, which was (sometimes the price levels) very high compared to the rest of the market”, Carlos Tavares stressed to BFM Business, during a visit to the Stellantis factory in Metz (Moselle) organized this Thursday, April 27.
Currently, the Tesla Model 3 starts at 42,000 euros in France, a Peugeot e-208, the best-selling 100% electric car in France last year, at 34,800 euros. But with a much greater range, Tesla’s vehicles are currently very well placed in value for money, which has caused further declines among some competitors.
In this context, Carlos Tavares, therefore, does not rule out finally reacting:
“If everyone goes crazy and puts automakers in the red, we’ll see.”
However, lowering prices also means reducing operating margin, as the Stellantis boss pointed out:
“We saw that the first quarter of 2023 results of this company over there (Tesla) showed a sharp drop in their profits, which means that at some point it will bring other problems to this company. Now, if you want to adjust to what it represents the market standard, that is their decision that I fully respect”.
Tesla announced a sharp drop in net profit last week, with its margin falling from 19.2% to 11.4% between the first quarters of 2022 and 2023. Stellantis, which achieved record results last year, will give find out its first-quarter sales on May 3.
Expected productivity gains
The opportunity also to return to the competition of Chinese manufacturers:
“We are competitors, we are ready to compete: this will translate for all our employees and for European citizens in additional efforts, because we will have to do more productivity to generate lower costs, which (…) will also allow us to compete against Manufacturers Chinese who are attacking the European market”, added Carlos Tavares.
At the last Paris Motor Show, Carlos Tavares estimated that the European Union was laying out the red carpet for Chinese manufacturers by betting on 100% electric by 2035, models in which the Chinese are already very competitive.
Carlos Tavares visited the Stellantis factory in Metz this Thursday, which has just started to produce gearboxes for hybrid and plug-in hybrid cars. The goal is to produce 600,000 units by 2024. For Carlos Tavares, the priority remains above all to reduce carbon dioxide emissions, without necessarily going 100% electric, called “zero emissions”:
“Today we have enormous uncertainty in the European market. Will it be 100% electric or not? Politicians have the answer. Our answer is to reduce CO2 emissions. With our hybrid solution we will replace old cars that are 12 years old. with hybrid cars with e-DCT gearboxes (the new gearboxes from Stellantis, editor’s note). We are replacing cars that emit more than 300 grams of CO2 per kilometer with hybrids that generate 100 grams of CO2 per kilometer. These 100g cars, the middle classes can afford to buy them, and you have a real impact there. You have to worry about the planet and not about dogmas. The solution is there, you have it in this factory”.
Source: BFM TV
