{"id":214366,"date":"2021-12-08T02:21:56","date_gmt":"2021-12-08T07:21:56","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=214366"},"modified":"2021-12-08T02:22:04","modified_gmt":"2021-12-08T07:22:04","slug":"cost-pressures-rising-as-stellantis-prepares-for-evs","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2021\/12\/cost-pressures-rising-as-stellantis-prepares-for-evs\/","title":{"rendered":"Cost Pressures Rising as Stellantis Prepares for EVs"},"content":{"rendered":"\n

With electrification expected to drive up the cost of new vehicles,\u00a0Stellantis\u00a0has no choice but to boost productivity and to continue reducing cost\u00a0to hang on to its middle-class customer base<\/a><\/span><\/strong>,\u00a0Stellantis\u00a0CEO Carlos\u00a0Tavares\u00a0said during a session with reporters in Detroit.\u00a0<\/p>\n\n\n\n

\"Stellantis
Stellantis CEO Carlos Tavares\u00a0told reporters it was important for him to “fight for the competitiveness of my company.”<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cI have to fight for the competitiveness of my company,\u201d Tavares said. If Stellantis is more competitive than its rivals, it has an opportunity to gain market share, maintain the affordability of its products and protect the company\u2019s future as a provider of mobility services, he said.  <\/p>\n\n\n\n

\u201cWe must protect affordability to protect our customer base,\u201d he said. <\/p>\n\n\n\n

However, Stellantis cannot forego developing electric vehicle or ask partners to handle the chore or expect subsidies from governments in North America or Europe, which are stressed by deficits, debt and rising interest rates, to continue indefinitely. <\/p>\n\n\n\n

The solution requires higher annual productivity inside Stellantis, he said. \u201cWe need 10% productivity, not the usual 3% that\u2019s been common in the auto industry,\u201d he added.  <\/p>\n\n\n\n

It also requires cost reductions from suppliers, which provide 85% of the material used in building a vehicle, according to Tavares, who indicated the company is having very intense conversations with its suppliers in the wake of the semiconductor shortages that shutdown plants across the globe. <\/p>\n\n\n\n

The semiconductor shortage also taught the Stellantis valuable lessons, which are already being transferred into the company\u2019s operations and software.  <\/p>\n\n\n\n

\"Stellantis
Stellantis CEO Tavares said the semiconductor shortage has the company rethinking how it operates and is already making changes.<\/figcaption><\/figure><\/div>\n\n\n\n

Lessons from semiconductor shortages <\/h2>\n\n\n\n

For example, Stellantis is asking whether it make more sense to work directly with second- and third-tier suppliers rather than utilize a tier-one supplier to ride heard on the supply chain. Stellantis also is pushing to upgrade the semiconductors it uses. <\/p>\n\n\n\n

Many of the semiconductors used by carmakers are a generation or two behind the chips used in the consumer electronics industry. By using the newer chips, the industry gains access to wider capacity, Tavares noted. <\/p>\n\n\n\n

At the same time, it can lower the costs for each of Stellantis\u2019 14 brands. Each of the 14 brands have software \u201cstacks\u201d developed separately throughout the years. Now they are being combined in a way that will support the distinct characteristics unique to each brand, he said. <\/p>\n\n\n\n

Tavares also emphasized during the conversation with reporters he intended to maintain each of the company\u2019s 14 brands<\/a><\/span><\/strong>. Each brand has a unique history and distinctive attributes that have kept them alive for decades despite multiple ownership changes.\u00a0\u00a0<\/p>\n\n\n\n

Plans call for keeping all 14 brands <\/h2>\n\n\n\n
\"2019
Tavares said he could relaunch the Fiat 500e in California.<\/figcaption><\/figure><\/div>\n\n\n\n

The goal during the next decade is for Stellantis to serve as the bridge between the past and the future, he said. Each of the brands now has its own CEO, focused exclusively on making sure they get the attention and love they deserve. <\/p>\n\n\n\n

Tavares also indicated he was willing to relaunch a vehicle \u2014 the Fiat 500e \u2014 in California. The 500e, which was often derided by former FCA CEO Sergio Marchionne<\/a><\/span><\/strong> as a compliance car sold to satisfy California\u2019s regulators, could do well in California, he\u00a0suggested,\u00a0particularly\u00a0since it could be less expensive than some of the other battery-electric vehicles now reaching the market.\u00a0<\/p>\n\n\n\n

Inflation is not the answer because it sets off an upward cycle that undermines stability, leads to higher interest rates and leaves most everyone in the supply chain worse off, he said. <\/p>\n\n\n\n

Fortunately, the merger of Fiat Chrysler and the PSA Group, which created Stellantis, gives the company more scale. It also demonstrated it has more pricing power, and it is 30% more efficient than its rivals in capital spending. <\/p>\n\n\n\n

The company also has a unique culture where both halves are attuned to need for keeping down costs because they have barely survived financial failure in the past. <\/p>\n","protected":false},"excerpt":{"rendered":"

The need to build EVs is putting big pressure on costs, Stellantis CEO Carlos Tavares said during a meeting with journalists Tuesday. He also said the recent semiconductor shortage is forcing the company to rethink how it does business \u2014 and changes are already being implemented. Go to TheDetroitBureau.com for the story.<\/p>\n","protected":false},"author":20009,"featured_media":214371,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[10,7,8,5,1164,9],"tags":[1325,601,3215,377,3885],"make":[],"post-state":[],"category_old":[],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/214366"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/20009"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=214366"}],"version-history":[{"count":2,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/214366\/revisions"}],"predecessor-version":[{"id":214374,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/214366\/revisions\/214374"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/214371"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=214366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=214366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=214366"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=214366"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=214366"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=214366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}