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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.

Power Wagon train: Exploring the Mojave Road

If you're in Vegas with free time and keys to a Power Wagon, taking an interstate home seems pointless when there's a 135-mile desert trail an hour away, an ideal opportunity to live with – and in – this off-roading Ram pickup for three days. So with friends schlepping camping gear to a rendezvous, this test/history lesson was on. The Road The Mojave Road most closely echoes the path 19 th century westbound settlers and eastbound government supply teams followed between the Colorado River near the AZ/CA/NV junction and Barstow en route to Los Angeles. This 35 th parallel route based on Indian trails has also been called the Old Spanish Trail, Old Government Road (how it appears on many navigation system maps), and the Mohave Road. It was preferred for having more temperate weather and reliable water than routes further south. Desert travel particularly was all about water at regular intervals. Much of the Mojave Road is under National Park Service purview in the 1.6-million-acre Mojave National Preserve, encompassing a big chunk of southeastern California. Nestled between two interstates, there are paved access roads to north and south, so you needn't run the entire distance if only a few areas interest you. It is home to geologic formations from mountains to lava beds and tubes, Joshua trees, and after rains like this winter, beautiful wildflower blooms. You'll see old mines and rail lines, and hear the "singing" sand dunes at Kelso (which I'd categorize as more of a monk's chant). We saw birds of prey, wild burros, lizards, and rabbits, and heard or saw evidence of coyotes, cows, and roadrunners. All the while figuring a rattlesnake could be behind any bush. The plan was to enjoy the mesquite scents and make a few stops (the Rock House, Mojave Mailbox) but otherwise make a non-committal east-to-west camping trip of it. Do as much or little as you like, though the NPS does remind you the desert can be an inhospitable place. Cell service is hit-or-miss, and they specifically recommend against relying solely on automotive GPS navigation. Lower elevations average triple-digit highs four months of the year while upper elevations get snow; in February the temperature at our 2,800-foot campsite dropped to freezing while days were sunny and moderate. If the entire road is open, it's about 135 miles from the river to western end, but in February expect portions to be closed, potentially making it many miles longer.

Midsize Ram truck coming to U.S.

The midsize truck segment is officially back in full force. Today, at FCA's new five-year plan, company CEO Sergio Marchionne and Ram head Mike Manley announced that America will be getting Ram's new global midsize truck. The new model is designed for a global audience. It will not be based on the Mitsubishi Triton, we're told. FCA already sells that model in certain markets as the Ram 1200. Trucks for the North American market will likely be built in Mexico on the old Ram Heavy Duty production line. The upcoming Ram HD — set to debut at the 2019 Detroit Auto Show — will be built in the US. The timing of the new midsize Ram isn't pinpointed, but the above slide from FCA's presentation suggests we'll see it by 2022. A with all upcoming Ram models, look for some form of electrification, likely in the form of the 48-volt mild hybrid system that's set to debut later this year in the 2018 Ram 1500. Don't expect the truck to tailor too heavily to US tastes like the Toyota Tacoma or Chevy Colorado. Like the upcoming Ford Ranger, this is a global truck first and foremost. Marchionne said that Ram's focus in the US will remain mostly on full-size trucks. Still it will be sold in the U.S., just not in any expected large volumes. Related Video: