Stellantis CEO Carlos Tavares informed investors during a meeting this week that electrification increases production costs by 40% to 50% compared to a gasoline or diesel vehicle. He went on to say the automotive conglomerate can’t simply fully transfer the extra costs to the buyer. It’s easy to understand why as very few would buy EVs when they could easily go for an ICE car and save a fortune.

From this, we can deduct Stellantis is currently selling zero-emissions cars at a loss and will do so for a long time coming. Tavares warned investors EVs will become more expensive because maintaining the current prices will force the automaker to “go in the red and we will have to restructure the company.”

He went on to say Stellantis has no other way but to absorb the extra costs until the gap will shrink. The company is actively looking for ways to reduce costs from other areas to maintain its double-digit operating margins achieved in 2021. To reach this goal, Tavares told investors productivity gains of 10% annually will be necessary until 2027 or so.

One method Stellantis is implementing is to adopt the retailer model that would give the firm far more control in regards to how the cars are sold. In addition, it would shave off the margins paid to dealers as the company would take responsibility for some of the costs. The strategy is being worked on and should come into effect by the middle of next year.

Ideally, Stellantis believes the retailer model will not only cut overall costs but also improve satisfaction thanks to more transparent pricing while having strict control of the profit margins.

Source: Automotive News Europe, Statista

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It should be mentioned the announcement impacts only new orders, so if you’ve already placed a deposit for an ICE-powered passenger van from a Stellantis brand, you won’t be forced to switch to its EV equivalent.

There are some exceptions to this decision as people living in Balkan countries, the United Kingdom, and Switzerland will still be able to go for a gasoline- or diesel-fueled passenger van. In addition, those residing in countries that are not part of the European Union will still have the option of an ICE-powered vehicle.

As to which vehicles are losing the piston engines, the list is quite long: Citroën Berlingo, Opel Combo Life, Peugeot Rifter, Citroën Jumpy Combi, Citroën Spacetourer, Opel Vivaro, Opel Zafira, Peugeot Expert, and the Peugeot Traveller. While Fiat is getting its own midsize van called Scudo, the Italian brand hasn’t made a similar announcement just yet.

By dropping the combustion-engined versions in those parts of Europe, it means these compact and midsize passenger vans will suddenly become a lot more expensive. Needless to say, this radical decision taken by Stellantis will greatly impact sales in 2022. We should specify the move does not include the cargo/commercial versions of those vans, which will soldier on with ICEs.

The former Vauxhall Astra factory at Ellesmere Port in the United Kingdom is in charge of producing the electric vans, supported by an investment of £100 million and the creation of 1,000 new jobs.

Meanwhile, Volkswagen announced this week it will (finally!) unveil the ID. Buzz production model on March 9 before having it on sale across Europe in the latter half of the year.

[Source: Stellantis]

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Joining the VW Group on the list of automakers that have refused to sign the pledge include large car manufacturers such as Toyota and Stellantis, but also Nissan, Honda, Renault, Hyundai, and BMW. As for those who have agreed to retire conventional engines, these include Mercedes, Volvo, Jaguar Land Rover, Ford, and Chinese brand BYD.

With so many huge automotive conglomerates not willing to sign the commitment, it goes to show the transition from gasoline and diesel engines to EVs won’t happen anytime soon. It’s especially true once you factor in counties such as Germany, the United States, France, and China as all of them are currently against abandoning the conventional engines in 19 years.

On a related note, Jaguar has already announced plans to become a purely electric brand by 2025, followed by Volvo by the end of the decade. Also in 2030, the BMW Group’s Mini and Rolls-Royce brand will exclusively switch to EVs, much like Ford of Europe. Mercedes has made a somewhat similar promise for 2030, but only in markets where the conditions will enable the three-pointed star to sell only electric cars.

Governments that have agreed to get rid of cars with combustion engines by 2040 have also expressed their commitment to do the same by the middle of the next decade in important markets, including the United Kingdom. That said, the unwillingness coming from China – the largest car market in the world – and the United States illustrates the Glasgow Declaration on Zero Emission Cars and Vans pledge hasn’t been entirely successful thus far.

Source: Reuters

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The assembly of a new van in both passenger and commercial versions is scheduled to commence towards the end of 2022. The van will be sold under Opel, Vauxhall, Peugeot, and Citroën brands for domestic and export markets. Stellantis, the world’s fourth-largest automaker, mentions the investment will secure thousands of jobs across the region in the supply chain and about 1,000 jobs at the factory.

Ellesmere Port will benefit from a new body shop and an upgraded assembly area, including an on-site battery pack assembly. However, it’s worth noting the cells themselves won’t be produced locally as these will be supplied by other Stellantis factories. Initially, the production capacity will be 50,000 vehicles per year, which will be more than double the current output of the Astra. That being said, in the Astra’s heydays, the factory was pumping out 160,000 cars annually.

The passenger version of the new electric van will have enough room for up to seven seats inside a “modern high-tech” cabin offering “great levels of comfort and adaptability and interior space, premium comfort and smart safety features.” The panel version will aim to take advantage of rising commercial vehicle sales, fueled by increasing demand for online delivery services.

As for the aforementioned next-gen Opel/Vauxhall Astra hatchback and wagon, it too will be electrified. It’s debuting in a few days or weeks with a plug-in hybrid powertrain likely similar if not identical to that of its sister model, the new Peugeot 308.

Source: Stellantis

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To get there, the result of the FCA-PSA merger will introduce 10 plug-in hybrids and EVs in 2021 alone. Stellantis has its work cut out for it considering the automotive conglomerate includes no fewer than 14 brands active in basically all parts of the world. Carlos Tavares says he’s fully aware some governments are already planning to ban the combustion engine in the long run, so Stellantis needs to be ready for when that’s going to happen.

Before that, Tavares claims hybrid and plug-in hybrid powertrains will eventually be abandoned, more reason for Stellantis to go “full throttle” on the development of purely electric vehicles. There’s also the issue with meeting increasingly stringent emissions regulations – especially in Europe and the United States – even more reason to heavily invest in electrification.

The backbone of Stellantis’ EV push is a newly developed e-VMP platform engineered for compact to midsize vehicles that do away with the combustion engine. It will debut on a production model in 2023 with the next generation of the Peugeot 3008 crossover. The new architecture will offer support for large 100-kWh batteries to offer a maximum range of more than 373 miles (600 kilometers). Stellantis models riding on the e-VMP underpinnings with power of up to 250 kilowatts (335 hp) and will be offered with front- and all-wheel-drive.

Smaller EVs will ride on the e-VMP platform and will be the foundation for successors of current models such as the Peugeot e-208 featured here, which uses a versatile platform (CMP / e-CMP) developed for cars with gasoline, diesel, and electric powertrains.

Source: Automotive News

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