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EV cost burden pushing automakers to their limits, says Stellantis' CEO Tavares

DETROIT — Stellantis CEO Carlos Tavares said external pressure on automakers to quickly shift to electric vehicles potentially threatens jobs and vehicle quality as producers struggle with EVs' higher costs. Governments and investors want car manufacturers to speed up the transition to electric vehicles, but the costs are "beyond the limits" of what the auto industry can sustain, Tavares said in an interview at the Reuters Next conference released Wednesday. "What has been decided is to impose on the automotive industry electrification that brings 50% additional costs against a conventional vehicle," he said. "There is no way we can transfer 50% of additional costs to the final consumer because most parts of the middle class will not be able to pay." Automakers could charge higher prices and sell fewer cars, or accept lower profit margins, Tavares said. Those paths both lead to cutbacks. Union leaders in Europe and North America have warned tens of thousands of jobs could be lost. Automakers need time for testing and ensuring that new technology will work, Tavares said. Pushing to speed that process up "is just going to be counter productive. It will lead to quality problems. It will lead to all sorts of problems," he said. Tavares said Stellantis is aiming to avoid cuts by boosting productivity at a pace far faster than industry norm. "Over the next five years we have to digest 10% productivity a year ... in an industry which is used to delivering 2 to 3% productivity" improvement, he said. "The future will tell us who is going to be able to digest this, and who will fail," Tavares said. "We are putting the industry on the limits." Electric vehicle costs are expected to fall, and analysts project that battery electric vehicles and combustion vehicles could reach cost parity during the second half of this decade. Like other automakers that earn profits from combustion vehicles, Stellantis is under pressure from both establishment automakers such as GM, Ford, VW and Hyundai, as well as start-ups such as Tesla and Rivian. The latter electric vehicle companies are far smaller in terms of vehicle sales and employment. But investors have given Tesla and Rivian higher market valuations than the owner of the highly profitable Jeep and Ram brands. That investor pressure is compounded by government policies aimed at cutting greenhouse gas emissions. The European Union, California and other jurisdictions have set goals to end sales of combustion vehicles by 2035.

Junkyard Gem: 1993 UMC Aeromate Food Truck

One of my favorite things about living in the Mile High City is all the food trucks roaming the neighborhoods here. I'm a regular at such fine mobile eating establishments as Tacos el Huequito, Mikes2Kitchen, and Yuan Wonton, and I'm pleased that South Denver's metal-centric Brutal Poodle bar now has its own food truck. The sad part about food trucks, however, is that they're trucks, and sometimes old trucks wear out and have to be sent to the knacker's yard. Here's a once-ebullient Denver food truck that met that fate and now resides in a self-service yard just south of the city. This truck started out as a member of the extended UMC Aeromate family, built in Indiana by the company now known as Utilimaster. I couldn't find much useful information about this particular model, which seems to have the windshield and nose of one of the many UMC-based RVs instead of the typical long snout of most Aeromates. What I do know is that it's based on an early-1990s Chrysler minivan chassis, complete with 3.3-liter V6 engine and the instrument cluster out of a 1992 Plymouth Voyager. The 3.3 made 150 horsepower in 1993, and it was installed in Chrysler minivans through 2010. 150 horses (and 180 pound-feet) isn't much for a big truck packed with a complete kitchen, and the strain on a Torqueflite automatic transmission designed for a 3,400-pound minivan must have been severe. I think the drivetrain on this 29-year-old truck just couldn't hold up under the demands of a hard-working crew of sandwich entrepreneurs in the extreme weather and traffic conditions of High Plains Colorado. The county licensing sticker expired in late 2019, so it took a couple of years for this UMC to reach this place. Don't weep for the Little Big Sandwich Truck, though, because the LBST Empire upgraded to a newer, GM-built school bus a few years ago and appears to be slinging sandwiches outside Denver-area breweries to this day. The headlights and marker lights clearly came from a late-first-generation Dodge Caravan/Plymouth Voyager (the second-generation Chrysler minivans, which debuted in the 1991 model year, got different noses). The grille looks like typical RV equipment. I've seen a few junked ice cream trucks over the years, but somehow a sandwich truck with a stenciled snorkeling dachshund seems sadder. Related video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Chrysler and Fiat are not going away, though the strategy is shifting

BALOCCO, Italy — At FCA's five-year plan extravaganza last week, most of the news was focused on just four brands — Jeep, Ram, Maserati and Alfa Romeo. In fact, Chrysler, Fiat and Dodge weren't even on the day's agenda. That led to some speculation that Chrysler might finally get the axe. Well, rumors of the brand's demise have been greatly exaggerated. In addition to an updated deal with Waymo, FCA CEO Sergio Marchionne expanded on future plans for Chrysler and Fiat during a Q&A session with investors and journalists. Marchionne said that Chrysler, Dodge and Fiat make up only 20 percent of global sales. While that means Jeep, Ram, Maserati and Alfa Romeo make up the bulk of FCA's profits (and most of that comes from Jeep and Ram). Currently, the Chrysler and Fiat brands just aren't important or valuable enough to warrant their own press conferences, but that doesn't mean things are doom and gloom. Marchionne said that both brands still have a future in FCA's portfolio. For Chrysler, that means more vans and possibly crossovers, and only in the North American market. The Pacifica and Pacifica Hybrid are doing well enough, so those will continue. Look for a crossover or two to come sometime down the line. Every Chrysler going forward will focus on utility and that's bad news for 300 enthusiasts: Marchionne said flat out that the Chrysler lineup won't contain any cars. Expect hybrid, plug-in hybrid and battery-electric versions of each new model. FCA plans to have an electrified version of every global model by 2022. Details were less clear for Fiat's future, though it won't be going away. The only new model that was announced was a new version of the all-electric Fiat 500e, a car Marchionne famously encouraged customers not to buy as the company lost $14,000 on each one sold. For North America, Fiat will focus on "green cars," though what exactly that means is unclear. Expect a refreshed version of the 500X in the next couple of years. Related Video: Image Credit: Reuters Earnings/Financials Green Chrysler Fiat Crossover Minivan/Van chrysler pacifica fiat 500e