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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.

2019 Ram HD Chassis Cab trucks: tough on the outside, comfy on the inside

The past year or so has been big for Ram. FCA's truck division went from having some of the most dated (though still solid) pickups on the market to introducing the 2019 Ram 1500, arguably the new segment leader. A year later, at the 2019 Detroit Auto Show, FCA revealed the new Ram Heavy Duty. Yesterday, Ram announced the 1500 was getting a trick tailgate to compete with the power tailgate on the Chevy Silverado and MultiPro tailgate on the GMC Sierra. Today, at the 2019 Chicago Auto Show, FCA will present the new Ram 4500 and 5500 chassis cab models. Like the Ram 2500 and 3500, the new chassis cab trucks appear to share a lot with the current crop of Ram HD trucks. The cab itself appears to be unchanged from the outside, though the front fascia has been updated to reflect Ram's current design. As with most things, it's what's inside that counts. The chassis cab models get the fantastic interior from the 2019 Ram 1500. It's a handsome and well-appointed cabin. Even base Tradesman models benefit from the new design and packaging. There's new tech, too. The 12-inch infotainment screen is nice to look at, but customers are likely to enjoy features like adaptive cruise control, forward collision warning and automatic emergency braking (with trailer brakes). The safety tech is available on all trim levels. The trucks also pack parking assist and a 270-degree camera view. There are also camera features to help hook up trailers (including fifth-wheel goosenecks). The Ram Chassis Cab 3500, 4500 and 5500 represent Class 3, 4 and 5 GVW ratings. As such they pack some punch under the hood. The standard engine is the 6.4-liter Hemi V8 making 410 horsepower and 429 pound-feet of torque, though 4500 and 5500 models only make 370 horsepower. The Ram 3500 features cylinder deactivation to improve fuel economy. The three trucks are available with a 6.7-liter Cummins turbo-diesel inline-six. The engine makes 360 horsepower and 800 pound-feet of torque. An Aisin six-speed auto is available on V8 models and standard with the diesel. Both engines are available with dual alternators. The trucks are available in four industry-standard frame lengths measured in inches from the cab to the rear axle: 60, 84, 108 and 120. Upgraded brakes should shorten stopping distances and improve pedal feel. Thanks to high-strength steel and aluminum, the truck should weigh about 120 pounds less than before.

Auto sales in March and first quarter down nearly across the board

Nearly every major automaker reported weak U.S. sales for March and the first quarter of 2019, citing a rough start to the year, but said a robust economy and strong labor market should encourage consumers to buy more vehicles as 2019 rolls on. GM, which no longer releases monthly sales figures, saw first-quarter sales fall 7 percent, with declines across all brands. Sales of Silverado pickup trucks fell nearly 16 percent and the high-margin Chevy Suburban large SUV dropped 25 percent. Ford also no longer releases monthly sales numbers, but is due to release its first-quarter sales figures on Thursday. According to industry data, Ford's sales fell 2 percent in the quarter and 5 percent in March. Ford representatives did not immediately respond to requests for comment. FCA reported a 7 percent fall in U.S. sales in March and a 3 percent drop for the first quarter. All of FCA's brands dropped in March, except for Ram, which saw a 15 percent increase in pickup truck sales. "The industry had a tough first quarter, but with spring finally starting to show its face and continued strong economic indicators ... we are confident that new vehicle sales demand will strengthen going forward," FCA's U.S. head of sales, Reid Bigland, said in a statement. Toyota reported a 3.5 percent fall in U.S. sales in March and 5 percent for the first quarter, hurt by declining demand for its Corolla sedans and Camry vehicles. "While some of our competitors are abandoning sedans, we remain optimistic about the future of the segment," Toyota said in a statement. Nissan posted a 5.3 percent drop in sales in March, and its first-quarter sales were down 11.6 percent. Honda and Hyundai bucked the trend. Honda's U.S. sales rose 4.3 percent in March and 2 percent in the quarter, while Hyundai's were up 1.7 percent and 2.1 percent, respectively. Passenger-car sales suffered throughout the January-March quarter compared with the same period in 2018 as Americans continued to abandon them in favor of larger, more comfortable pickup trucks and SUVs, which are far more profitable for automakers. The battle for market share in the particularly lucrative large-pickup truck market intensified in the quarter, as Fiat Chrysler Automobiles' Ram brand outsold the U.S.' No. 1 automaker General Motors' Chevrolet-brand trucks. The two automakers have both launched redesigned pickup trucks.