NEW DELHI (Reuters) – Fiat parent company Stellantis (STLA.MI) has concluded that it cannot currently build affordable electric cars in Europe and is eyeing low-cost manufacturing in markets such as India, its chief executive. to reporters.
Carlos Tavares, CEO of the group whose brands it also owns, said that if India, with its low-cost supplier base, can meet the company’s quality and cost targets by the end of 2023, it could open the door to exporting EVs to other markets. Including Peugeot and Chrysler.
“So far, Europe is not able to make affordable electric cars. So the big opportunity for India will be to be able to sell affordable electric compact cars, protecting profitability,” Tavares told reporters at a media roundtable in India late Wednesday.Read:New Home Bargains at Shipley retail park could create 70 jobs
Stellantis is investing heavily in EVs and plans to produce dozens in the next decade, but Tavares warned last month that affordable battery EVs were five to six years away.
On his first visit to India since becoming CEO of Stellantis, he said the company is still working on a plan on electric vehicle exports from the country and has not made any decisions yet.
Tavares’ potential bet on India comes after the US automakers Ford (FN) and General Motors (GM.N) exited the world’s fourth largest car market, after failing to make money and break the dominance of the Japanese Suzuki Motor Company (7269.T). ) and the South Korean Hyundai Motor Company (005380.KS).
It also comes as Chinese electric vehicle makers make their way into Europe, aiming to win over buyers with more affordable cars after already stealing a rally over most foreign competitors in China, the world’s largest market for electric vehicles.Read:Anger in Cornwall seaside village St Mawes over plan to demolish historic harbour landmark
Stellantis is the latest to refocus its strategy in China where it now plans to become a niche player through its Jeep and Maserati brands, after saying its Jeep joint venture in the country would file for bankruptcy.
“There is growing tension between China and the Western world. This will have repercussions in terms of business. India is clearly the power best to take advantage of this opportunity,” Tavares said.
India, where Stellantis sells its Jeep and Citroen brands, accounts for a fraction of the automaker’s global sales, but Tavares said the company was not chasing volume and instead wanted to ramp up production slowly and profitably.
Tavares had previously said he expected revenues in the South Asian country to more than double by 2030 and operating profit margins to be in the double digits within the next two years.
The automaker plans to launch India’s first EV – an electric model of its Citroen C3 compact car – early next year.Read:Kwarteng is sticking to his guns on tax and spending cuts. But what he really needs is luck | Economics
Stellantis already makes its own electric motors and battery packs, and it also has plans to make battery cells. In India too, Tavares wants to buy EV components locally, including batteries so that they can be competitive on cost and price.
“The tariffs for importing a car in India are very high. Which means if you want to have an affordable electric car, it has to be built in India with Indian suppliers and components,” he said, adding that the company would need to source at least 90% of the parts. locally to be competitive.
“Today’s electric cars are mostly an issue of affordability,” he said. “It’s not about technology.”
(Reporting by Aditi Shah) Editing by David Holmes and Mark Potter
Our Standards: The Thomson Reuters Trust Principles.