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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.

Weekly Recap: Lamborghini fires on all cylinders

Lamborghini added 192 technicians and specialists in 2014 as the Italian automaker expands under the ambitious growth strategy of parent company Volkswagen AG. The additional workers helped Lamborghini increase its sales 19 percent last year to 2,530 supercars, and further expansion is planned for this year. Lambo has added more than 500 people in the last four years, bringing its headcount to 1,175. "Lamborghini is undergoing a strong phase of growth in both sales and in terms of recruitment," CEO Stephan Winkelmann said in a statement. "We invest significantly in our people ... in 2015 we plan to hire further." The supercar maker's solid performance last year came during a time of transition. Lambo sold off the final 265 Gallardos, which were the brand's best-selling models ever. Its 10-cylinder successor, the Huracan, immediately filled the void. It garnered 3,300 orders, and 1,137 of them were delivered in 2014. The other Lamborghini, the 12-cylinder Aventador, saw its sales increase 13 percent to 1,128 copies. The sales leap comes as Volkswagen drives sales expansion across its portfolio of brands. The German carmaker sold 10 million vehicles around the world for the first time last year. Though Lambo will never make supercars in great numbers, it is expected to contribute to VW's bottom line through its image and profitable sales. Look for further growth this year, and a Super Veloce version (shown above) of the Aventador has already been spotted during testing. Lamborghini has been working on a sport utility vehicle for years, though the company has never publicly approved the project. It also showed a hybrid, the Asterion, at last year's Paris Motor show, suggesting the automaker is considering an electric future. Other News and Notes GMC ponders Jeep Wrangler fighter GMC is considering adding a competitor to the Jeep Wrangler and has discussed the idea with its dealers, according to the Wall Street Journal. Details of the vehicle are unclear, but the report suggested the vehicle could have cues from General Motors' old Hummer brand. The move would broaden GMC's lineup of trucks and SUVs and attract new customers. GMC sold 501,853 vehicles in 2014, making it GM's second-best selling brand. GMC had more volume than Cadillac and Buick combined, though it's still well behind Chevrolet's tally of more than two million vehicles. The notion of a "Wrangler fighter" could be a moving target.

SUV lifts you up where you belong and leapfrogs traffic jams

So, you're at a dead stop, stuck in traffic, when it pulls up behind you. It appears to be a garden-variety Jeep Grand Cherokee. That is, until its undercarriage lifts the Jeep 9 feet into the air, and the whole rig straddles you and the cars ahead of you in a bid for open road. The car is called the Hum Rider, and no, you can't buy one at the Jeep store. It's a one-off publicity stunt intended to promote Verizon Telematic's Hum platform, which plugs into a car's OBD port and for $10 a month provides vehicle diagnostics, roadside assistance, location tracking, and speed and geo-fencing alerts. (Not sure if Hum tracks vertical leaps.) Verizon enlisted viral marketing agency Thinkmodo to promote the Hum, and this idea was head and shoulders above the rest. "We saw this one [and said], 'Wow, that is crazy,' said Jay Jaffin, Verizon's VP of marketing. "We loved the idea." Thinkmodo co-founder James Percelay told Mashable that they wanted to represent the upgrade Hum brings to cars. So the car goes up. Get it? Here's the star of this story: Hum Rider's designer, Scott Beverly, has done visual effects for Hollywood in The Dark Knight, Inception and Interstellar. He works for A2Zf, a Lancaster, Calif., design and engineering firm that keeps the world filled with Batmobiles, Red Bull Can Cars and beautifully designed VWs and Audis. A2Zf has also worked with NASA on X-planes and with Northrup on the B2 bomber, so compared to those projects, a car-straddling car is hardly a stretch. So what does it take to make a car do this? How about: Over 300 feet of hydraulic lines that operate everything - the lift mechanism, steering, braking and power to the drivetrain. A gas-powered Honda generator under the hood that powers hydraulic pumps pushing out 900 pounds of pressure. A lot of mechanical structure. Hum Rider weighs 8,500 pounds, almost double a standard Grand Cherokee. Heavy-duty truck tires to support all that weight. Four undercarriage cameras that allow the driver to see and clear what's beneath him. What did it cost? They're not saying. What would it be worth, the next time you're stuck in traffic? Priceless.