Competition is always healthy, not just in the car industry but in basically all other types of businesses. It pushes manufacturers to develop better products and to (relatively) keep prices in check to lure in more customers. That said, Stellantis CEO Carlos Tavares isn’t exactly thrilled by the proliferation of China-made electric cars in Europe.
He is concerned the auto industry on the Old Continent will have to get ready for a “terrible fight” with brands from the People’s Republic. Because production costs are much lower in China, vehicles exported from the world’s most populous country significantly undercut those assembled at European factories.
The head of auto supplier Forvia – which recently acquired Hella – says Chinese automakers can typically build an EV for €10,000 (about $10,500) less than a European brand. Forvia’s Chief Executive Patrick Koller said at CES 2023 in Las Vegas this discrepancy is “more dangerous” for Europe than it is for the United States where Chinese cars face high import duties.
Talking to Automotive News Europe, Stellantis’ head honcho Carlos Tavares said:
“Regulation in Europe ensures that electric cars built in Europe are about 40 percent more expensive than comparable vehicles made in China. If the European Union does not change the current situation, the region’s auto industry will suffer the same fate as the European solar panel industry. I think we’ve seen this movie before. It’s a very bleak scenario. But it doesn’t have to go that way.”
Tavares does have a solution to fight back at the likes of SAIC, BYD, and Geely. A “reindustrialization” of Europe by bringing back lost production capacity would lower costs and make cars more competitively priced against Chinese ones. He also believes a different trade policy to protect European car production would be a viable solution.
If nothing will happen, Tavares projects it will “inevitably lead to unpopular decisions” in Europe by reducing car production and relocating output to regions where costs are lower.