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Big Auto CEO: Rush For Electrification Could End In Tears

Amid a veritable race among carmakers to become fully electric before everyone else, the chief executive of Stellantis has warned that this race could end in tears.

In an interview with Reuters this week, Carlos Tavares said the pressure on carmakers to move to an all-electric output would put under threat jobs and the quality of the vehicles they manufacture.

"What has been decided is to impose on the automotive industry electrification that brings 50% additional costs against a conventional vehicle," Tavares 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," the executive of one of the world's ten largest carmakers also said.

Tavares' comments come as some peers such as VW in Europe and GM and Ford in the United States work towards accelerating an all-electric future for their business. This acceleration, however, has been hobbled by the ongoing chip shortage, which has seen all car sales decline.

Still, the race is on, with GM planning to become an electric-only car manufacturer by 2035 and Ford setting the same year as the deadline for the end of internal combustion engine vehicle production. 2035 is also the year VW plans to become an all-electric carmaker.

Carmakers need more time to make sure the new technology works, Tavares said, because rushing things up "is just going to be counter productive. It will lead to quality problems. It will lead to all sorts of problems," he said.

Then there is the cost aspect. Earlier this week, a VW board member warned that company efforts to secure battery minerals and manufacturing capabilities could end up costing it some $34 billion.

Yet VW is not the only company looking for more battery minerals, which is already pushing the prices of these minerals higher, which in turn pushes higher the price of the finished product, and this, in its turn, could postpone the moment when EVs become as cheap as ICE vehicles, which is widely seen as the watershed moment that would usher in the EV era.

By Irina Slav for Oilprice.com

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Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More

Comments

  • Kay Uwe Boehm - 3rd Dec 2021 at 11:20am:
    Huge is hydrogen production in Abu Dhabi from.methane, water & heat but setting free CO/CO2.

    Hydrogene from electrolyse is only competitive based on cold fusion ot nuclear power like for e-cars no green energy surplus available from solar and wind power. Hydrogen can be easy changed into sabatier process double dense 700+ bar CNG out of H2 + gas centrifuge air CO2 also a cheap zero carbon cycle.

    All combustion engines can run also with CNG like cars, buses, trucks, trains and airplanes.
  • Scott Wiggins - 2nd Dec 2021 at 3:08pm:
    A recent study indicate d that only 3 percent of new car buyers in the US are considering EVs. More, there is virtually zero infrastructure in terms of charging stations. GM and Ford pledging to be out of the ICE by 2035 is so much poppycock. As well, a recent study had the quality of EVs dead last in consumer ratings. Government and industry need to get out of the way and let the consumer decide when they want an EV.
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