Stellantis CEO Tavares warns of ‘terrible fight’ with Chinese automakers

LAS VEGAS – Stellantis CEO Carlos Tavares sees the European auto industry at a crossroads in competition with Chinese rivals.

If European politicians can’t find an answer to Chinese automakers’ forays into Europe, there will be a “bad fight”, Tavares said. car week A bystander at CES 2023 in Las Vegas.

The European auto industry could be forced to cut production capacity sharply in the face of increased competition from China, Tavares said.

Chinese companies are expanding into Europe with competitive and aggressively priced vehicles, Tavares added.

“The price gap between European and Chinese cars is huge. If the current situation continues, middle-class European customers will increasingly switch to Chinese cars. Purchasing power for many Europeans has declined significantly.”

Tavares’ comments echo those of Forvia CEO Patrick Koller, who said in Las Vegas that European automakers need to develop affordable, small battery electric vehicles for urban use. I was.

Europe’s emission control regime is not helping local automakers, Tavares said.

“European regulations make an electric car made in Europe about 40% more expensive than a comparable electric car made in China,” he said.

Tavares warned that the region’s auto industry will suffer the same fate as Europe’s solar panel industry if the European Union does not change the current situation. “I think we’ve seen this movie before. It’s a very dark scenario. But it doesn’t have to go that way.”

SAIC’s MG, BYD, Geely’s Zeekr and Nio are among the Chinese automakers targeting European consumers with electric vehicles.

“Unpopular Decision”

Tavares said there are two paths Europeans can take.

“We have no choice if we continue to open up the European market. We have to fight China directly. That applies to the entire automotive value chain.”

The consequences would be serious, he said. “It will inevitably lead to unpopular decisions.”

Capacity must be reduced and the plant relocated to a more favorable location.

Another option, according to Tavares, is to “reindustrialize” Europe, restoring lost industries and production chains.

“But if we want that, there’s still a lot to do in the EU and we’re going to need a different trade policy.”

Tavares said German industry in particular would not be enthusiastic about trade policies that would impose restrictions on China.

“In the end, the challenge is like making a square out of a circle. In the current situation, if we do nothing in the European Union, it will be a terrible fight,” he said.

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