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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.

2020 Ford Super Duty Tremor vs. 2020 Ram 2500 Power Wagon: How they compare on paper

(Editor's Note: Due to inconsistencies in manufacturer reporting methods for ground clearance, an earlier version of this article stated the Ram Power Wagon's "ground clearance" to be 14.3 inches when in fact that is its "running clearance," which is deemed the ground to the lowest point of the truck MINUS the axles. The numbers below now reflect true ground clearance, or the ground to the lowest point of the truck, period. The chart and text have been updated to show both measurements for maximum accuracy and clarity.) For several years, the Ram 2500 Power Wagon has been the unquestioned king of heavy duty off-roaders. But competition is coming, and some of the strongest is from the 2020 Ford Super Duty Tremor. We decided to take a look at these trucks' specs and features to see how they compare in the realm of capability. The raw numbers are below along with some notes on each truck's unique features that go beyond the spec sheet. Off-road capability While both of these trucks boast impressive clambering abilities, each with particular strengths. The Super Duty Tremor earns points for better ground clearance and axle clearance, as well as approach angle. Some of the credit goes to the larger 35-inch tires and a shortened front air dam. On the other hand, the Power Wagon leads the Ford in departure angle, and in the ramp travel index. The latter is largely the result of the Power Wagon's electronically disconnecting sway bars, and for those unfamiliar, the ramp travel index measures articulation by having a truck drive one wheel up a ramp with the other on the ground. The farther the truck goes with the ground wheel in contact with the, well, ground, the better the score and the better the articulation. Numbers aren't everything, though. It's important to look at the equipment each truck offers, and things are closer, here, but the Ram still has an edge. Both feature off-road-friendly solid axles at both ends, but only the Power Wagon has fully locking differentials front and rear. The Tremor has a locking rear differential while the front is a limited-slip differential. The Power Wagon comes standard with a 12,000-pound integrated Warn winch, whereas such a winch is an option on the Tremor. The Tremor has its own unique features, though, including the 35-inch tires rather than the Ram's 33-inchers, and it has Ford's fancy off-road cruise control function called Trail Control. Both trucks have shocks and springs tuned for off-road use.

United States drivers buying fewer Mexican-made cars

Crossovers and pickup trucks are not only growing in market share, they're also more profitable than cars. A crossover on the same platform as a sedan retails for thousands more, despite similar components. It's one of the reasons we've seen automakers rapidly shifting production of their sedans and hatchbacks to Mexico, where cheap labor preserves the thin profit margins on these inexpensive vehicles. But as the market continues to shift in the United States, Mexico is getting burned by its lack of product diversity. The country's auto exports, which are heavy on cars, suffered a 16-percent drop last month, Automotive News reports. In total, year-over-year exports fell from 233,515 to 197,020 last month, while year-to-date exports are down by 7.4 percent, from 922,029 to 854,118. The number one culprit? America – which usually accounts for 75 percent of Mexico's exports – and its appetite for crossovers and pickup trucks bolstered by cheap gas prices. While Mexico does build some light truck models – AN specifically calls out the Ram 2500, Honda HR-V, GMC Sierra, and Toyota Tacoma as export leaders – the vast majority of vehicles rolling out of its factories are sedans and hatchbacks. In fact, the three biggest drops in Mexican exports came from companies whose south of the border factories only build cars – Ford (Fusion/Lincoln MKZ and Fiesta), Mazda (Mazda3), and Volkswagen (Golf and Jetta). Mexican Automotive Industry Association President Eduardo Solis told AN the export shortfall will likely be sorted out sooner rather than later, thanks to a pair of new factories – a Kia car factory and an Audi SUV plant – that are coming online by year's end. The two facilities will add around 100,000 vehicles to the country's export totals, which Solis said should leave the industry on the verge of breaking another export record in 2016. But how sustainable will these record-breaking years be? Slapping an "Hecho en Mexico" sticker on a new German SUV won't be enough to change the fact that Mexico's product mix is tilted too heavily towards body styles that are not growing in volume. Mexico's record-breaking export years probably aren't at an end, but we'd argue they're certainly under threat. News Source: Automotive News - sub. req.Image Credit: Omar Torres / AFP / Getty Images Plants/Manufacturing Ford GMC Honda Mazda RAM Volkswagen Truck Crossover SUV Mexico