If the production costs of electric vehicles do not fall, the car market could implode, warns a senior Stellantis staff, regarding the recent European Union ban on the sale of combustion vehicles from 2035.
Ending production of internal combustion automobiles could save the planet, but it could also wipe out the industry if the cost of electric cars doesn’t start to come down, a Stellantis executive amended to reporters.
Car manufacturers have sought to lower the costs of electric vehicles, which are more expensive to produce and consequently have a higher price than their combustion counterparts.
However, this effort is being threatened by rising prices of materials used to manufacture batteries, while some countries are reducing or eliminating subsidies for the purchase of electric vehicles.
Some brands that sell electric vehicles such as Ford, Hummer, Rivian and Tesla have been forced to increase the retail price to cover the rise in production costs and this is worrying the industry.
If manufacturers cannot lower the cost of trams, the “market will collapse”, as Stellantis production manager Arnaud Deboeuf told Bloomberg during a visit to one of the French factories that is being prepared for the production of vehicle components. electrical. “It’s a big challenge”, he underlined.
European Union bans combustion in 2035
Buyers who don’t want to buy electric vehicles at too high a price can still opt for combustion engine alternatives. However, this alternative will disappear in the medium term in some parts of the world.
The European Union approved a ban on new combustion vehicles in 2035, while other countries, some US states and several manufacturers have already asked to only allow or produce electric vehicles from the same time or even earlier.
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Stellantis has plans to reduce electric vehicle production costs by up to 40% in 2030, which could be achieved by manufacturing some components in-house or increasing pressure on external suppliers of other components to reduce prices, as Arnaud said. Deboeuf.
At the same time, Carlos Tavares told journalists that despite Stellantis complying with the European Union’s decision to ban combustion engines by 2035, he considers that those who make these decisions do not want to know whether or not manufacturers have raw materials to make the change. for electric vehicles.