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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.

2017 Jeep Grand Cherokee Trailhawk is coming | Autoblog Mintue

The trail-focused luxury Jeep is coming to dealer lots soon. Autoblog's Brandon Turkus took a quick spin in the 2017 Jeep Grand Cherokee Trailhawk.

FCA US put on probation, Stellantis to pay $300M for emission scheme

DETROIT — FCA US, formerly known as Chrysler Group, was placed on probation for three years Monday and ordered to pay roughly $300 million for deceiving regulators about diesel emission systems on 101,000 Jeep Grand Cherokees and Ram 1500 trucks. The sentence was part of an earlier agreement. FCA in June pleaded guilty to conspiracy in federal court in Detroit. Engineers were accused of using software tricks and taking other steps to meet U.S. emission standards while marketing the vehicles as “clean EcoDiesel.” The vehicles were diesel Jeep Grand Cherokees and Ram 1500 trucks from the 2014, 2015 and 2016 model years. FCA now is part of Stellantis. “Stopping violations of environmental laws and the defrauding of consumers is paramount to the protection of clean air and human health," the U.S. Environmental Protection Agency said. Separately, three FCA employees face charges in the investigation. In 2017, Volkswagen was ordered to pay a $2.8 billion criminal penalty for cheating on U.S. diesel emissions tests. The company also paid $1.5 billion in a civil case brought by the government and said it would spend $11 billion to buy back cars and offer other compensation. Government/Legal Green Jeep RAM Emissions Truck SUV Diesel Vehicles ecodiesel