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

LAS VEGAS — Stellantis CEO Carlos Tavares sees the European vehicle industry at a crossroads in competitiveness with its Chinese rivals.

If politicians in Europe do not obtain an respond to to the force into Europe by Chinese automakers, there will be a “horrible fight,” Tavares informed Automobilwoche on the sidelines of CES 2023 in Las Vegas.

Europe’s vehicle industry could be compelled to massively lessen its output capacity in the confront of growing competition from China, Tavares claimed.

Chinese firms are expanding in Europe with competitive and aggressively priced autos, Tavares extra.

“The price variance involving European and Chinese motor vehicles is considerable. If very little is improved in the existing scenario, European prospects from the middle class will increasingly transform to Chinese styles. The buying power of quite a few folks in Europe is lowering noticeably.”

Tavares’s remarks echo these of  Forvia CEO Patrick Koller, who claimed in Las Vegas that European automakers will have to acquire affordable tiny battery-electric powered motor vehicles for urban use.

Europe’s emissions regulatory regime is not helping the region’s automakers, Tavares mentioned.

“Regulation in Europe ensures that electric cars and trucks crafted in Europe are about 40 per cent far more expensive than similar vehicles manufactured in China,” he explained.

If the European Union does not improve the latest scenario, the region’s automobile industry will suffer the similar fate as the European solar panel business, Tavares warned. “I assume we have observed this movie in advance of. It truly is a extremely bleak circumstance. But it isn’t going to have to go that way.”

SAIC’s MG, BYD, Geely’s Zeekr and Nio are amid Chinese automakers focusing on European customers with their electrical cars.

‘Unpopular decisions’

There are two paths the Europeans could consider, Tavares reported.

“If you preserve the European market place open up, then we have no choice: we have to fight the Chinese instantly. And that applies to the whole automotive benefit chain.”

The effects would then be important, he mentioned. “That would inevitably guide to unpopular conclusions.”

Capacities would have to be slash and vegetation would have to be relocated to extra favorable locations.

An additional possibility, Tavares stated, is to “re-industrialize” Europe, to provide back misplaced industries and generation chains. 

“If you want that, on the other hand, there is nevertheless a large amount to do in the EU, then you would have to have a different trade plan.”

German industry in specific would not be enthusiastic about a trade coverage placing boundaries on China due to the fact it would massively have an impact on European things to do in China, Tavares mentioned.

“Eventually, this challenge is akin to squaring the circle. In the recent context, if absolutely nothing is done in the European Union, there will be a horrible battle,” he mentioned.