ABG: EV cost burden pushing automakers to their limits, says Stellantis' CEO Tavares Pushing this hard could threaten j

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GRA

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EV cost burden pushing automakers to their limits, says Stellantis' CEO Tavares

Pushing this hard could threaten jobs and vehicle quality

https://www.autoblog.com/2021/12/01/ev-development-costs-stellantis-carlos-tavares/


Stellantis CEO Carlos Tavares said external pressure on automakers to quickly shift to electric vehicles potentially threatens jobs and vehicle quality as producers struggle with EVs' higher costs.

Governments and investors want car manufacturers to speed up the transition to electric vehicles, but the costs are "beyond the limits" of what the auto industry can sustain, Tavares said in an interview at the Reuters Next conference released Wednesday.

What has been decided is to impose on the automotive industry electrification that brings 50% additional costs against a conventional vehicle," he said.

"There is no way we can transfer 50% of additional costs to the final consumer because most parts of the middle class will not be able to pay."

Automakers could charge higher prices and sell fewer cars, or accept lower profit margins, Tavares said. Those paths both lead to cutbacks. Union leaders in Europe and North America have warned tens of thousands of jobs could be lost.

Automakers need time for testing and ensuring that new technology will work, Tavares said. Pushing to speed that process up "is just going to be counter productive. It will lead to quality problems. It will lead to all sorts of problems," he said.

Tavares said Stellantis is aiming to avoid cuts by boosting productivity at a pace far faster than industry norm.

"Over the next five years we have to digest 10% productivity a year ... in an industry which is used to delivering 2 to 3% productivity" improvement, he said.

"The future will tell us who is going to be able to digest this, and who will fail," Tavares said. "We are putting the industry on the limits."

Electric vehicle costs are expected to fall, and analysts project that battery electric vehicles and combustion vehicles could reach cost parity during the second half of this decade. . . .

Tavares said governments should shift the focus of climate policy toward cleaning up the energy sector and developing electric-vehicle charging infrastructure. . . .

Tavares has accelerated Stellantis' electric vehicle development, committing 30 billion euros through 2025 to developing new electric vehicle architectures, building battery plants and investing in raw materials and new technology.

On Tuesday, Stellantis said it had invested in solid-state battery startup Factorial alongside German automaker Daimler AG.

"We can invest more and go deeper in the value chain," Tavares said. "There may be other (investments) in the near future."




Also ABG:
Auto execs expect EVs will own over half the market by 2030

The most bullish executives were in the United States and China

https://www.autoblog.com/2021/11/30/electric-cars-half-market-share-2030/


Auto industry executives expect electric vehicles will make up just over half of new vehicle sales in the United States and China by 2030, and could do so without receiving government subsidies, according to a new survey by accounting and consulting firm KPMG.

But combustion vehicles, including hybrids, are expected to retain a significant share of most major vehicle markets for years to come, according to KPMG's latest annual survey of 1,000 auto industry executives.

The speed at which automakers can phase out combustion engines and the carbon dioxide they emit is a pivotal issue for the global auto industry. A group of automakers and countries signed a statement earlier this month calling for phase-out of combustion vehicles globally by 2040, and by 2035 in richer nations.

But the world's two largest automakers by sales, Volkswagen and Toyota, and three of the world's biggest vehicle-buying nations — China, the United States and Germany — did not sign on.

The KPMG survey of auto industry executives found that they believe that electric vehicles will account for 52% of sales by 2030 in the United States, China and Japan, with lower percentages for Western Europe, Brazil and India. But behind those aggregate forecasts, industry executives have widely varying views.

For China, some auto industry executives expect EV sales by 2030 to be less than 20% of the market, while others believe the world's largest market could be 80% electric by then.

Electric vehicle sales around the world have been fueled so far by government subsidies. But 77% of the respondents to KPMG's survey said electric vehicles can achieve mass adoption within 10 years without government aid as battery costs drop to parity with petroleum-fueled engines. However, 91% of auto executives said they support government subsidies. . . .
 
GRA said:
EV cost burden pushing automakers to their limits, says Stellantis' CEO Tavares

Pushing this hard could threaten jobs and vehicle quality

Same thing. Who would have guessed? Along with some hydrogen:

https://jalopnik.com/you-get-one-guess-which-car-company-is-complaining-abou-1848143083

Meanwhile, Hyundai’s continued shadowing of Toyota in investing in hydrogen continues to be kind of tragic. Bloomberg has a big story on how Hyundai is sticking with it, despite a general inability for people to easily operate a hydrogen car:

The experience of Song Young-jin shows just how tough it will be for Hyundai to succeed in a world increasingly embracing electric-battery-powered motors. The 38-year-old sales manager in Euiwang city bought a Hyundai Nexo, whose hydrogen-fuel-cell engine emits only water vapor, in March 2020. Wooed by Hyundai’s advertising, he felt a hydrogen car would be good for long commutes and better for the environment.

By August though, fed up with having to drive 50 kilometers (40 miles) every week to the nearest hydrogen refueling station, he was looking to sell. In a double blow, Song watched in dismay as the value of a second-hand Nexo crashed on a used-car site by around $1,000 a month.

"I liked the hydrogen car itself-it’s quiet, and charging takes just 5 minutes, faster than an electric car," Song says. "But refueling stations are lacking, and the maintenance costs [for parts such as hydrogen tanks] are huge, which is probably why they’re so cheap in the used-car market. Next time, I’ll buy electric.”"

Bloomberg also includes that Hyundai’s chairman admitted that hydrogen owners are "having troubles refueling" but that they should "endure this pain." The whole story is worth a read.
 
I remember when the auto makers were complaining about how much it cost to make cars get 20mpg. The horror :twisted:

Personally, I'd buy a cheap, plain EV, even if it had only a resistance heater (heat pumps are great though....) that doesn't have radar, lidar, AI, wifi, wireless charging, 12" TV screen in front, etc, etc, etc. I just want a decent car to get from point A to point B.

Oh.....I guess I have one, it's my 2017 S Leaf! :mrgreen:
 
webeleafowners said:
It’s just a shot across the bow for the unavoidable bailout requests that will be happening soon enough.

Jmho

They'll need some cash after Tesla eats their lunch.
 
Nubo said:
webeleafowners said:
It’s just a shot across the bow for the unavoidable bailout requests that will be happening soon enough.

Jmho

They'll need some cash after Tesla eats their lunch.

Some automakers will not make the transition. Relief for the workers at the automakers that fail would be kind. Not their fault.
 
WetEV said:
GRA said:
EV cost burden pushing automakers to their limits, says Stellantis' CEO Tavares

Pushing this hard could threaten jobs and vehicle quality

Same thing. Who would have guessed? Along with some hydrogen:

https://jalopnik.com/you-get-one-guess-which-car-company-is-complaining-abou-1848143083

Meanwhile, Hyundai’s continued shadowing of Toyota in investing in hydrogen continues to be kind of tragic. Bloomberg has a big story on how Hyundai is sticking with it, despite a general inability for people to easily operate a hydrogen car:

The experience of Song Young-jin shows just how tough it will be for Hyundai to succeed in a world increasingly embracing electric-battery-powered motors. The 38-year-old sales manager in Euiwang city bought a Hyundai Nexo, whose hydrogen-fuel-cell engine emits only water vapor, in March 2020. Wooed by Hyundai’s advertising, he felt a hydrogen car would be good for long commutes and better for the environment.

By August though, fed up with having to drive 50 kilometers (40 miles) every week to the nearest hydrogen refueling station, he was looking to sell. In a double blow, Song watched in dismay as the value of a second-hand Nexo crashed on a used-car site by around $1,000 a month.

"I liked the hydrogen car itself-it’s quiet, and charging takes just 5 minutes, faster than an electric car," Song says. "But refueling stations are lacking, and the maintenance costs [for parts such as hydrogen tanks] are huge, which is probably why they’re so cheap in the used-car market. Next time, I’ll buy electric.”"

Bloomberg also includes that Hyundai’s chairman admitted that hydrogen owners are "having troubles refueling" but that they should "endure this pain." The whole story is worth a read.


I'm surprised that Hyundai sold him a car for just that reason. Hyundai and the other manufacturers here in California screen their customers, and won't sell or lease to them unless they have convenient re-fueling. This guy never should have gotten the car in the first place if he wasn't willing to put up with the long drive. Hyundai wouldn't even lease the Nexo in NorCal, only in SoCal until a few months ago, because they didn't think there was adequate refueling infrastructure here until then. As I said, being at the bleeding edge has costs that you need to be aware of and willing to pay.

For me personally, my closest station is 1.9 miles from me, and I have three others within 10 miles in different directions. I (and most owners I've talked to) are aware of the supply issues, so they (and me if I drove one) fuel up more often than they otherwise would, to see them through supply shortages. It's the price you currently have to pay for an immature infrastructure, much as it's necessary on BEV trips in areas with low charger density to re-charge at every available opportunity, if you don't want to chance your trip being summarily cut short and needing a long-distance tow.

Reminds me of the guy who was briefly a member here, who lived in the Chicago area and bought a LEAF in October or November 2011. Thought it was great at first, then took it on one short winter drive with his family, found his range much reduced and was worried that he would run out of charge and be stranded with his wife and kids. He traded it in on a Volt almost immediately, after owning it for about 3 months total IIRR. He too never should have bought the car in the first place.

Despite much better charging infrastructure now than existed a decade ago, we still have to play 20 questions with newbies who ask if a BEV would work for them. That's even more true for FCEVs here at the moment, as they are 5-7 years behind on the development curve, and even more so on infrastructure thanks first to the Air Products fire and then Covid causing station building and to a lesser extent new fuel production to grind to a halt for 18 months.
 
goldbrick said:
I remember when the auto makers were complaining about how much it cost to make cars get 20mpg. The horror :twisted:

Personally, I'd buy a cheap, plain EV, even if it had only a resistance heater (heat pumps are great though....) that doesn't have radar, lidar, AI, wifi, wireless charging, 12" TV screen in front, etc, etc, etc. I just want a decent car to get from point A to point B.

Oh.....I guess I have one, it's my 2017 S Leaf! :mrgreen:


Gotta have the heat pump for range in our cool winters (driver-only HVAC mode also desirable), AWD, long range and the fastest possible re-charging for a sub-$40k MSRP+ dest., but otherwise we're on the same page. Sadly, manufacturers know that they can't currently make money on BEV strippos like that, and as they get the same subsidies for higher, more profitable trims with all the bells and whistles, that's what they offer.
 
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