Competition is always healthy, not just in the car industry but basically any other type of business. This encourages manufacturers to develop better products and to (relatively) maintain the price to attract more customers. That said, Stellantis CEO Carlos Tavares isn’t too pleased with the rise of Chinese-made electric cars in Europe.
He was worried that the auto industry in the Old Continent should prepare for a “terrible battle” with the brands from the People’s Republic. Because production costs are much lower in China, vehicles exported from the world’s most populous country significantly reduce production assembled in European factories.
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The head of auto supplier Forvia – which recently acquired Hella – says the Chinese automaker can usually make EVs for €10,000 (about $10,500) cheaper than European brands. Forvia Chief Executive Patrick Koller said at CES 2023 in Las Vegas the discrepancy was “more dangerous” for Europe than for the United States where Chinese cars face hefty import duties.
Speak to European Automotive NewsStellantis head honcho Carlos Tavares said:
“Regulations in Europe ensure that electric cars built in Europe are about 40 percent more expensive than similar vehicles made in China. If the European Union does not change the current situation, the region’s automotive industry will suffer the same fate as the European solar panel industry. . I think we’ve seen this film before. This is a very grim scenario. But it doesn’t have to be like that.”
Tavares does have a solution against the likes of SAIC, BYD, and Geely. A “reindustrialization” of Europe by restoring lost production capacity would lower costs and make cars more price competitive than Chinese cars. He also believed a different trade policy to protect European car production would be a viable solution.
If nothing happens, Tavares projects it will “certainly lead to an unpopular decision” in Europe by reducing car production and relocating output to lower cost areas.
