Stellantis CEO Warns of Delays in Transition to Electric Vehicles

Carlos Tavares, the CEO of Stellantis, has issued a stark warning about the risks that could arise from a delayed transition to electric vehicles (EVs). He emphasized that a slowdown in the transformation could lead to higher costs and cautioned against diluting existing regulations aimed at reducing carbon emissions. Tavares' message at the Paris Auto Show was clear: prolonged transition periods would only lead to the coexistence of old and new technologies, rather than a full shift to electromobility. These concerns come at a time when European automakers are stressing the need to reconsider the new emission standards set to take effect next year. Particularly in light of sluggish growth in electric vehicle sales, the EU's goals to transition completely to electric vehicles by 2035 are faltering. At the same time, Stellantis faces criticism from investors worried about rising inventories in the U.S. Such challenges recently led to lowered profit expectations and a reshuffling in company leadership. Although Tavares was once hailed as the savior of the PSA Group, having successfully orchestrated the merger with Fiat Chrysler, he now faces criticism for his pricing strategy in North America. However, he defended his decisions, pointing out that the U.S. team independently developed the pricing and inventory strategy. Tavares acknowledged that he had seen the risks but ultimately trusted the local team, which retrospectively proved to be a mistake. To address the challenges in the U.S., Tavares promised to reduce inventories by Christmas. Simultaneously, the Stellantis board is ensuring the search for his successor, as his term will end in 2026. Dealers, suppliers, and unions also voiced criticism and called for new ways to improve profitability. Tavares highlighted that the affordability of EVs and competition with Chinese manufacturers will remain a focal point. It remains intriguing to see how Tavares and Stellantis will balance cost reduction, competitiveness, and customer demands without resorting to layoffs and plant closures. The automotive industry is under significant pressure to adapt and grow as the global market share of Chinese manufacturers threatens to increase substantially in the near future.