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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.

Chrysler investing $20M in Toledo plant to support 9-speed auto production

In 2011, Chrysler announced a $72-million investment in its Toledo Machining Plant to modernize production of the eight- and nine-speed torque-converters for automatic transmissions made there. That upgrade work won't be finished until Q3 of this year, but Chrysler has already announced a further $19.6-million investment to increase production capacity for the nine-speeders.
The extra units will be necessary because the nine-speed transmission they'll be mated to is going into three popular models: it will debut on the 2014 Jeep Cherokee, then go into the Chrysler 200 and Dodge Dart. The company predicted that this year alone it would sell 200,000 units equipped with the nine-speed tranny, and it is spending some $374 million in addition to the investment in Toledo to upgrade production capacity for it.
The work attached to this new investment won't begin until Q3 of 2014, and it will be finished by the end of that year. There's a press release below with all the details.

'Baby Driver' is a car chase movie set to music

The Fate of the Furious is certainly the 6,000-pound SUV in the garage of automotive movies, but that doesn't mean gearheads are starved for options. The upcoming film Baby Driver looks to be a winner for car guys, featuring exciting chases with cars including a "hawk-eye" Impreza WRX, a Dodge Challenger, and a 1980s Chevy Caprice. The movie is written and directed by Edgar Wright, whom you may know as the man behind movies such as Sean of the Dead, Hot Fuzz, and Scott Pilgrim vs. The World. And based on the two trailers released so far, seen above and below, it's about a young man by the name of Baby, who is a getaway driver for criminals. He's apparently the best in the business, and the secret to his success is the music he listens to while he's driving. He also wants out, but his boss, played by Kevin Spacey, has no intention of letting him go. Spacey is one of a number of major stars in the film, including Jamie Foxx and John Hamm. The driving action shown in the trailers definitely looks entertaining. The WRX is seen doing an array of drifts and J-turns. There is some driving precision on display here that wouldn't be out of place in a Gymkhana video. And it looks like Wright's attention to detail in his shots and transitions, as well as some solid comedy relief, are all going to be present. The film comes out this August. Related Video: News Source: Sony Pictures Entertainment / YouTube via Road & TrackImage Credit: Sony Pictures Entertainment / YouTube TV/Movies Chevrolet Dodge Subaru Videos baby driver