NEW DELHI, Nov 24 (Reuters) – Fiat parent company Stellantis (STLA.MI) has concluded that it cannot currently make affordable electric vehicles (EVs) in Europe and is looking at cheaper production in markets such as India, the CEO told reporters.
If India, with its low-cost supplier base, is able to meet the company’s quality and cost targets by the end of 2023, that could open the door for EV exports to other markets, said Group CEO Carlos Tavares whose brands also Think of Peugeot and Chrysler.
“Until now, Europe is not able to make affordable EVs. So the big opportunity for India would be to be able to sell compact EVs at an affordable price, protecting profitability,” Tavares told reporters at a media roundtable. in India late on Wednesday.
Stellantis invests heavily in electric cars and plans to produce dozens over the next decade, but Tavares warned last month that affordable battery electric cars would take between five and six years.
On his first visit to India since taking over as CEO of Stellantis, he said the company was still working out a plan regarding the export of electric vehicles from the country and had not made any decisions yet.
Tavares’ possible bet on India comes after US automakers Ford(FN) and General Motors (GM.N) exited the world’s fourth-largest auto market after failing to make money and losing market dominance. Japanese Suzuki Motor Corp (7269.T) break. ) and South Korean Hyundai Motor (005380.KS).
It’s also because Chinese EV manufacturers are pushing into Europe, aiming to win over buyers with more affordable cars that have already stolen a march from most foreign rivals in China, the world’s largest market for EVs.
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 announcing that its Jeep joint venture in the country would go bankrupt.
“There is a growing tension between China and the Western world. This will have an impact on business. The power best placed to seize this opportunity is clearly India,” 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 grow slowly and profitably.
Tavares has previously said he expects revenues in the South Asian country to more than double by 2030 and operating profit margins to be in the double digits for years to come.
The automaker plans to launch its first EV in India early next year – an electric model of its Citroën C3 compact car.
Stellantis already makes its own electric motors and battery packs, and plans to make battery cells as well. Also in India, Tavares wants to source EV components, including batteries, locally to be competitive on cost and price.
“The customs duties for importing a car into India are sky-high. Which means if you want to have an affordable electric car, it has to be made in India with Indian suppliers and parts,” he said, adding that the company would have to source local in at least 90% of parts to be competitive.
“EV is mostly an affordability issue these days,” he said. “It’s not about technology.”
Reporting by Aditi Shah; Adaptation by David Holmes and Mark Potter
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