The boss of Stellantis returned on Thursday to the price cuts practiced by Tesla and the threat posed by Chinese manufacturers on the European market.
Stellantis does not want to enter the price war triggered by Tesla. In recent months, the American brand has made several price cuts on its models, which has worried its main competitors engaged in the electrification of 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 who was (at times price levels) very high compared to the rest of the market”, underlined Carlos Tavares 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 triggered further declines among some competitors.
In this context, Carlos Tavares therefore does not finally rule out reacting:
“If everyone goes crazy and puts automakers in the red, we’ll see.”
However, lowering prices also means reducing the operating margin, as the boss of Stellantis noted:
“We saw that the results for the first quarter of 2023 for this company there (Tesla) showed a sharp drop in its profits, which means that at some point it will pose other problems for this company. Now, if she wants to adjust to what the market standard represents, that’s her 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 its first-quarter sales on May 3.
Expected productivity gains
The opportunity also to come back to the competition from Chinese manufacturers:
“We are competitors, we are ready to race: this will translate for all our employees and for European citizens into additional efforts, because we will have to do more productivity to generate lower costs, which will (…) also allow us to compete against Chinese manufacturers who are attacking the European market”, added Carlos Tavares.
At the last Paris Motor Show, Carlos Tavares estimated that the European Union was rolling out the red carpet for Chinese manufacturers by making this choice of 100% electric for 2035, models on which the Chinese are already very competitive.
Carlos Tavares visited this Thursday the Stellantis factory in Metz, which is just starting to produce gearboxes for hybrid and plug-in hybrid cars. The objective is to produce 600,000 units by 2024. For Carlos Tavares, the priority remains above all to reduce carbon dioxide emissions, without necessarily going to 100% electric called “zero emissions”:
“Today we have enormous uncertainty on the European market. Will it be 100% electric or not? The politicians have the answer. Our answer is to reduce emissions of CO2. With our hybrid solution, we will replace old cars that are 12 years old with hybrid cars with e-DCT gearboxes (the new Stellantis gearboxes, editor’s note). We are replacing cars that are over 300 grams of CO2 per kilometer by hybrids that make 100g of CO2 per kilometer. These 100g cars, the middle classes can afford to buy them, and there you have a real impact. You have to worry about the planet and not dogmas . The solution is there, you have it in this factory.”
