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Stellantis, Fiat’s parent company stated that it has decided not to make electric vehicles in Europe at the moment and that it is now looking into lower-cost manufacturing options in countries such as India.
With its low-cost supplier base, India could be able to meet the company’s quality and cost targets by 2023-end. This would open the doors to exporting EVs into other markets, stated Carlos Tavares (CEO of the group).
“So far, Europe has not been able to produce affordable EVs. The big opportunity for India is to be able to sell compact EVs at an affordable price while protecting profitability,” Tavares stated to reporters during a media roundtable in India.
Stellantis has made a significant investment in EVs and plans to make dozens over the next decade. But Tavares warned last week that it was still five to six years before affordable battery EVs are available.
He said that Stellantis was still developing a plan for EV exports to India and that he had not taken any decision yet.
China is the largest market for EVs worldwide.
“There is increasing tension between China, the West, and China. This is going to have an impact on business. India is the country that has the most power to take advantage of this opportunity, Tavares stated.
India is where Stellantis sells its Jeep and Citroen brands. However, Tavares stated that the company wasn’t chasing volume but rather wanted to grow slowly and profitably.
Tavares previously stated that he expected revenues to more than double in South Asia by 2030 and that operating profit margins would be double-digits in the next few years.
The automaker will launch India’s first EV – an electric version of its Citroen C3 compact vehicle – in the early part of next year.
Stellantis makes its own battery packs and electric motors and plans to produce battery cells. Tavares also plans to procure local components for EVs in India.
The customs duties for importing a car into India are extremely high. This means that if you want an affordable electric vehicle, it must be made in India by Indian suppliers and components. He also said that the company would need at least 90% local parts to remain competitive.
He said that EV today are mainly an affordability problem. It’s not technology.