AutosStellantis CEO Carlos Tavares braces for potential electric car market shift

Stellantis CEO Carlos Tavares braces for potential electric car market shift

Carlos Tavares
Carlos Tavares
Images source: © Getty Images | Bloomberg

10:33 AM EST, November 29, 2023

Carlos Tavares, CEO of automotive giant Stellantis, is strategizing for a longer lifespan of combustion engines. Two upcoming political events could potentially modify existing strategies.

"Next year, we will deal with the European Parliament elections in June and the U.S. elections in November. Politics might be completely different by then," Tavares said in an interview with Automotive News.

Tavares adds that he may have to alter his plans for selling electric cars if the political climate is not supportive, especially regarding any rollback of carbon dioxide emission regulations. "Preparing the company for new laws is one of my responsibilities. We have contingency plans for such a situation," he argues.

The vehicular scenario in Europe is undoubtedly evolving. The landscape was disrupted by the victory of a Dutch populist associated with right-wing figure Geert Wilders. Italian Prime Minister Giorgia Meloni opposed the banning of combustion engine cars, arguing that it would damage the country's economy. Thomas Schaefer, CEO of Volkswagen, indicating the shifting market conditions, announced that the brand "is no longer competitive."

Previously, Volkswagen had trimmed down production at its Zwickau plant. Further reductions are expected, potentially resulting in layoffs as the company scrutinizes "structures, processes, and high costs".

In the U.S., electric cars have become a political hot topic. Businessman and Republican presidential candidate Vivek Ramaswamy criticized the subsidies for electric vehicles introduced by President Joe Biden as a scheme that "spends taxpayer money for some to feel cool […] by buying electric cars."

This perspective should not be surprising, as research from the University of California suggest that owning an electric car has a strong correlation with political beliefs. In fact, half of the electric cars are registered in the top tenth percentile of counties with the highest concentration of Democratic supporters.

Electric vehicles still carry a higher price tag: the average purchase price for an electric car in the U.S. is $53,000, compared to $48,000 for a combustion car. Similarly, Europeans appear to be waiting for cheaper alternatives. Volkswagen announced plans for a car priced around $22,000 in 2026. Meanwhile, Chinese manufacturers are already making inroads into the European market. This year, there are already numerous Chinese manufacturers in Poland.

Related content