Stellantis, Renault race to cut costs to make EVs more affordable

By Thomson Reuters Feb 15, 2024 | 7:03 AM

By Nick Carey and Gilles Guillaume

LONDON (Reuters) – Under pressure from Chinese competitors, Stellantis and Renault are pushing hard to cut electric vehicle costs so they can have similar price tags and profit margins as fossil-fuel models, industry executives said on Thursday.

Europe’s automakers are trying to develop more affordable EVs, which are more expensive than combustion-engine equivalents, as electric car sales growth has slowed.

Along with concerns over a lack of available charging infrastructure, the high cost of EVs has become a significant barrier to broader mass adoption for zero-emission cars.

“If I were a short-termist, I could immediately increase my sales of electric vehicles simply by letting the margins slide,” Stellantis CEO Carlos Tavares told reporters after the company posted full-year results and warned of a turbulent year ahead.

The arrival of lower-cost Chinese EVs has provided fresh urgency to European automakers’ ongoing efforts to develop more affordable models.

“Of course, everybody is trying to reduce the cost of EVs,” to reach price parity with combustion-engine models, Renault CEO Luca de Meo told analysts when asked about prices and profitability.

De Meo, speaking after Renault published 2023 results, said reducing prices will be easier for smaller cars because automakers can cut the size of the battery pack – which typically makes up around 40% of an EV’s cost – but means prices will remain higher for those with bigger batteries.

(Reporting By Nick Carey and Gilles Gillaume. Editing by Jane Merriman)