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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.

Rivian R1T faces first competitive test in Rebelle Rally

Not long ago, the Rivian R1T electric pickup engaged in a very public bit of development testing as a support vehicle for "Long Way Up" — the trip Ewan McGregor and Charlie Boorman took on Harley Davidson LiveWire electric motorcycles from Ushuaia, Argentina, to Los Angeles. Next month, the R1T enters the realm of competition testing by competing in the Rebelle Rally, the all-female navigation rally held over 10 days and 1,243 miles in the sandy, rocky hinterlands of California and Nevada. The team behind the wheel will be pilot Emme Hall and navigator Rebecca Donaghe, who won last year's Rebelle Rally driving the then-new Rolls-Royce Cullinan. This is the first year in the Rebelle's five-year history that there will be a pure electric vehicle. A Mitsubishi Outlander PHEV will be the only other entrant flying the electrified flag. To welcome the battery-electric pickup and any other electrified runner that wants to join in the future, rally organizers have arranged a battery-powered mobile charging system to be deployed along the course. It's not clear which battery and motors the Rivian will house, but the top spec would provide a 180-kWh pack, up to 750 horsepower, and a range of more than 400 miles in normal conditions. The race will help Rivian hone the pickup's off-road credentials, the brand's creative director saying, "Adventures like the Rebelle Rally are what Rivian vehicles are made for." The Rebelle isn't a timed rally, so the point isn't to beat up the R1T with marathon stints on the throttle. As a navigation rally, competitors aim acquire points by hitting certain checkpoints, making strategy key. The ability to clamber over and through whatever's in the way won't hurt, either, a technique aided by the R1T's height-adjustable suspension that provides 14 inches of ground clearance on its tiptoes. The ability to do tank turns might also come in handy. The Rivian will prove itself by placing, or teach important lessons by falling out. All of this is a necessary step for a manufacturer selling "electric adventure vehicles." There are only two classes in the Rebelle Rally, Crossover and 4x4. Crossovers can be two-wheel drive or all-wheel drive, and can have unibody construction but no low-speed transfer case. The 4x4 class is traditional off-roaders with a low-speed transfer case, ranging from the Jeep Wrangler to the Range Rover.

FCA CEO Mike Manley will run Americas for Stellantis after PSA merger

DETROIT — Fiat Chrysler CEO Mike Manley will run operations in the Americas when his company merges with FranceÂ’s PSA Peugeot early next year. FCA Chairman John Elkann announced ManleyÂ’s new post on Friday in a letter to employees. ManleyÂ’s role in the merged company had been a mystery. PSA CEO Carlos Tavares will run the overall company, to be named Stellantis. Shareholders of both companies will vote on the merger Jan. 4 to seal the deal creating the worldÂ’s fourth-largest automaker. The merger is expected to be completed by the end of March. PSA will get six seats on the new companyÂ’s 11-member board, which will be chaired by Elkann. The Americas, especially the U.S., are key to the new companyÂ’s success. Fiat ChryslerÂ’s Jeep and Ram brands are highly profitable, and Tavares has long wanted to sell PSA vehicles in the U.S. Manley has been the Italian-American automakerÂ’s CEO for 2 1/2 years, taking over when Sergio Marchionne died in 2018. Stellantis will have the capacity to produce 8.7 million cars a year, just behind Volkswagen, the Renault-Nissan alliance and Toyota. Related Video: Hirings/Firings/Layoffs Chrysler Dodge Fiat Jeep RAM Citroen Peugeot Mike Manley Stellantis