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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.

Jeep dealers worried Grand Wagoneer could be too much, too late

On January 10, 2011, an Automotive News article quoted Fiat Chrysler CEO Sergio Marchionne saying, "It's time we gave the market an upper-scale Grand Wagoneer." Like Babe Ruth pointing a finger at the far stands, Marchionne next predicted our date with historical destiny: "You'll see it in January 2013." Had that happened, the Grand Wagoneer would been a grand slam. Seven years later, with various economic factors in flux and still with no Grand Wagoneer in sight, it seems some Fiat Chrysler dealers are worried the luxury three-row Jeep could appear after the SUV game is over or, at the very least, much harder to play. What got in the way of the Grand Wagoneer? Shifting plans for and the need to pour money into Alfa Romeo. The debate about what kind of vehicle the Wagoneer should be — a unibody Range Rover rival, or a body-on-frame Chevrolet Suburban foe. After that, what should the thing look like? And then there's Fiat Chrysler's North American manufacturing capacity, which can't shoehorn space for Grand Wagoneer production at the same time as it needs lines running for two Ram 1500 model years. That last point is what could push Wagoneer and Grand Wagoneer arrival to 2021. Outside the company, at least one Bank of America Merill Lynch analyst believes that economic forces such as a shrinking car market, more competition, higher interest rates on more expensive cars, lower used car prices, and higher gas prices will soon bring an end to the "Goldilocks" phase of crossover mania. He isn't alone, with an IHS analyst saying the same thing three years ago, another IHS analyst diving deeper into the declining numbers two years ago, and three other analysts breaking down depressed used car prices. Fuel prices are anyone's guess, but those other pressures could squeeze retailers trying to sell high-end metal. No one expects the Grand Wagoneer to fail, yet dealers don't expect the vehicle to practically sell itself. One dealer told AN, "We could have killed with [the Grand Wagoneer] if it had been available when they first told us about it, but it's a much tougher sell with interest rates and gas prices going up." Another dealer, perhaps more sanguine, said, "The Grand Wagoneer will still sell because it's a Jeep. But it would have been nice to have them already." "Nice" is an understatement. One dealership was so excited about getting the new big Jeep that it wrote a blog post in 2015 announcing the Grand Wagoneer's arrival in 2018.

NHTSA upgrading Jeep Grand Cherokee, Dodge Durango headliner fire probe

The National Highway Traffic Safety Administration investigation into headliner fires experienced by a small number of Jeep Grand Cherokee and Dodge Durango owners has been upgraded to an engineering analysis, the step before the initiation of a recall. In August last year the investigation began with 146,000 Grand Cherokees from 2012 after three complaints were received, but a report on Edmunds says it has been expanded to include 593,299 vehicles covering the 2011-2013 model years for the Jeep and the Dodge Durango, which uses the same headliner assembly, because of possibly 52 incidents of fire.
In some of those incidents drivers have reported a burning odor, smoke or open flames that were contained to the headliner or migrated to another area of the passenger compartment. The culprit has apparently been found: NHTSA blaming an electrical short in the sun visor vanity light wiring, which is routed under the headliner and held in place by three screws. Chrysler began its own probe into the issue when it was first reported and is still looking into the situation while, "fully supporting the National Highway Traffic Safety Administration's investigation."