Stellantis Comes to India to Make Affordable EVs in Europe
Fiat parent Stellantis has concluded that it cannot yet make affordable electric vehicles (EVs) in Europe and is looking at cost-effective production in markets such as India, its executive told reporters.
If India, with its low-cost supplier base, can meet the company’s quality and costs by the end of 2023, it could open the door to exporting EVs to other markets, said Carlos Tavares, CEO of the group that also owns its products. including Peugeot and Chrysler.
“So far, Europe has not been able to make affordable EVs. So India’s biggest opportunity would be to be able to sell EV compact cars at an affordable price, to protect profits,” Tavares told reporters at a press conference in India late Wednesday.
Stellantis is investing heavily in EVs and plans to mass produce in the next decade, but Tavares warned last month that affordable battery EVs were five to six years away.
In his first visit to India since he took over as CEO of Stellantis, he said that the company is still preparing the plan regarding the export of EV from the country and has not made any decisions yet.
Tavares’ possible bet on India comes after American automakers Ford and General Motors have pulled out of the world’s fourth-largest auto market, after failing to make money and ousting Japan’s Suzuki Motor and South Korea’s Hyundai Motor.
It also comes as Chinese EV manufacturers are making inroads into Europe, aiming to win over buyers with affordable cars that have already stolen a march on many foreign rivals in China, the world’s largest market for EVs.
Stellantis is the latest to refocus its strategy in China where it plans to become a top player with its Jeep and Maserati brands, after it said its joint venture Jeep in the country will file for bankruptcy.
“There is a growing dynamic between China and the West. That will have an effect in terms of business. The power best placed to take advantage of this opportunity is clearly India,” said Tavares.
India, where Stellantis sells its Jeep and Citroen brands, accounts for a fraction of global sales, but Tavares said the company was not chasing volume and instead wanted to grow slowly and be profitable.
Tavares previously said he expects revenue in the South Asian country to more than double by 2030 and operating profit margins to double digits in the next few years.
The automaker plans to launch its first EV in India – an electric model of its Citroen C3 compact car – early next year.
Stellantis already makes electric motors and battery packs, and has plans to make battery cells. In India, too, Tavares wants to source EV components locally, including batteries to be competitive in cost and pricing.
“The tax burden of importing a car into India is very high. Which means if you want to have an affordable EV, it has to be made in India with Indian suppliers and compounds,” he said, adding that the company would need to find. at least 90 percent of the parts in the area to compete.
“The EV today is very much a problem of affordability,” he said. “It’s not about technology.”
© Thomson Reuters 2022