Stellantis Chief Carlos Tavares previously asserted that the optimum price of an affordable electric vehicle is “around $25,000.” Offering EVs with this low pricing is apparently crucial for the multinational automaker’s long-term business prospects.
CEO Tavares further stated that automakers’ failure to endure the necessary extra manufacturing costs would lead the middle class out of the industry.
More interestingly, he also claimed that having a profitable yet affordable offering should be the focus of the discussions with the United Auto Workers (UAW) union this year.
“We need to work very hard to reach that point. Part of the things we need to discuss with our union partners is how we make affordable EVs in the US that the middle classes can buy and that they are sustainable because they are profitable.”Stellantis Chief Carlos Tavares
What’s the issue?
Stellantis’ intention to offer affordable EV models in the US is indeed remarkable. It can potentially encourage more customers to consider the shift. As we all know, affordability is among the top concerns of price-conscious EV buyers.
The automaker aims to make it possible by lowering its fixed-cost structure. However, it clashes with the UAW’s call for higher salaries and benefits.
Therefore, Stellantis’ plan to produce $25k EVs is currently unattainable as the UAW does not approve its approach. For context, its four-year contract with the UAW will expire on September 14, 2023.
UAW President Shawn Fain even argued that automakers must not compromise workers’ rights in their strategies to develop low-priced EVs.
“The electric vehicle transition does not have to be a race to the bottom. Unfortunately, Stellantis has taken the low-road approach, resulting in closed plants and destroyed communities. Stellantis’ business model is broken, and until they fix it, they’ll never hit that $25,000 target.”UAW President Shawn Fain (via Automotive News)
President Fain even showed his disposal of Stellantis’ proposals during a live stream last week. He also stated that the automaker “spit in the face” of the organization members with its proposed changes.
For context, Stellantis apparently plans to implement more stringent worker attendance rules and lower their healthcare coverage, among others.
- Stellantis to launch more affordable, sub €25K Fiat EV
- Stellantis introduces battery system that may pave the way for smaller and cheaper EV models
- Toyota and Stellantis oppose Biden Administration’s proposed ambitious tailpipe emission limits
- Canada to offer billions in incentives to Stellantis and LG for a new EV battery factory
- Stellantis hints at new compact and midsize EVs with up to 435 miles between charges
The US currently has no $25K EV offering. As of now, the Chevrolet Bolt EV is the most affordable option for US-based customers.
Nonetheless, Stellantis will soon market two low-priced EVs in Europe at approximately €25K ($27,300).