Stellantis: Governments must consider true cost of electric cars

Governments must consider the need to keep cars affordable for the masses and the full lifecycle impact of a vehicle when mandating the switch to full electrification.

That’s according to Stellantis boss Carlos Tavares, who wants it to be remembered that “the scientific decision on the choice of this technology hasn’t been made by the automotive industry”.

“I think we could have been more efficient with multiple technologies, not one single technology,” said Tavares at the Financial Times Future of the Car summit.

“When you look at carbon emissions, we should look at lifecycle emissions for the masses. If we make future mobility [specifically electric cars] only affordable for wealthy people, we will have a fleet of older cars that will continue to emit.

“How do you keep cleaner mobility affordable to have a significant impact on the number of tonnes of CO2 we emit? It’s not as simple as having cars on sale: you need people wiling to buy and afford them. If we don’t keep the affordability, we will impact freedom of mobility, which is a major problem for modern democracies.”

Tavares said he was committed to bring in EVs as required by legislation, but even more so on reducing emissions. However, he said that governments mandating purely on tailpipe emissions are missing the bigger picture and driving up the cost of vehicles for consumers.

“In one decade, mobility devices will be 300-500kg heavier than today,” he said. “That will bring to the table the topic of materials. The scarcity of them and renewable ones.

“No one should forget where the decision has come from: it’s not the automotive industry. We should keep that in mind for the future. We’re flat out getting things done, have full compliance and are committed to doing our bit for global emissions.

“The shift we’re bringing is solutions to protect future mobility. They need to be clean and safe, but we shouldn’t forget affordability.”

Tavares said that “governments are surfing on public opinion” around a mandate switch to EVs, “which is fine with me, but you need to understand the science, the full lifecycle analysis – not just the tailpipe emissions, which aren’t the same”.

He added: “There is a strong link between freedom of mobility, lifestyle, regulations and low-emissions vehicles.

“The timeline of electric vehicles only depends on when governments will impact on freedom of mobility. Governments can do that with bans overnight on engines. So you go to office on your bike or buy an EV.

“The low-emissions mix of [new car] sales will be 30-35% by 2025 and no less than 70% by 2030. It could be higher than 70%, depending on regulations. If regulations don’t allow it, you will choose your bike or an EV: it’s up to you.”

Tavares expects Stellantis’s future manufacturing footprint in Europe to stay the same after the switch to electrification – but failure to do so would lead to “social consequences”, likely restrictions and redundancies.

“If we succeed in making the vehicles affordable, safe and clean, then the manufacturing footprint won’t be different as the size of the market will be similar or bigger,” he said.

“If we couldn’t keep these vehicles affordable, that would impact the size of the market and then we would need to adjust the manufacturing footprint.



Cost parity between ICE cars and EVs could be possible in the future, said Tavares, but less certain is the ability to protect the profit margins on those cars.

“If we can’t protect margins on each EV we sell versus today, there will be consequences,” he said. “If we can’t protect margins, there will be restructuring and there will be social consequences.

“At Stellantis, we want to control costs to make sure we have our own control on productivity base, to have quality performance and reduced costs, to protect margins we have on current ICE vehicles.

“If we succeed, there will be no significant social consequences. There’s a high chance we will [succeed] by 2025, but there’s lots of hard work we have to deliver by 2025. I’m not sure all car companies will be able to do that to deliver competitiveness.

“The challenge isn’t zero emissions but a challenge on affordability, to protect margins and avoid significant social consequences.”