Stellantis is working to do its part to mitigate the costs of switching to an electric vehicle, but it would be desirable for European governments to support final consumers with subsidies, even if this is difficult given the high level of debt of various countries, especially in southern Europe. This was stated by the CEO of Stellantis, Carlos Tavares, speaking from CES 2023 in Las Vegas: «We can do our job and we try to do it to try to mitigate the cost so as to help consumers without putting the company at risk, even when that means making unpopular choices. We must protect profitability and make electric cars affordable at the same time”, adding that “I would like to see European governments support end consumers with subsidies that go directly into their pockets, it would be a good thing for the transition period from now to 2030, but we know that governments will not be able to sustain significant subsidies due to the debt issue. This creates a stalemate.”
How to help end consumers with subsidies when you are in a European country, not specifically Italy, which has high deficits and debt? “We must accelerate cost reductions for EV technology to make it affordable and protect middle-class access to these vehicles through subsidies that directly benefit end consumers. This has an impact on the balance sheet and debt, and as we know the cost of debt is now higher than it was years ago due to rising interest rates. This is the situation we face in Europe and it is even more acute and clear-cut in Italy,” Tavares said.
Affordable price for the middle class
As Tavares explained, “the level of debt in Europe is very high, the cost is higher due to the increase in interest rates, which means that countries will struggle to keep their accounts in order and will avoid further indebtedness in relation to GDP”. This means that “the risk that must be avoided concerns the possibility of offering electric vehicles at a price that the middle class cannot afford, and this is exactly what I’m trying to avoid”, underlined the number one of Stellantis, specifying that “this situation is not specific to Italy, it is a real situation for all of Europe and above all for the countries of southern Europe , such as Italy, France, Spain, Portugal and Greece, which have to deal with a question of product accessibility». After all, according to Tavares, «the case of the Italian automotive market is very interesting because, as you know, Italy has the B segment (one of those defined at European level for cars, it refers to small cars, ed) largest in Europe. And this makes the question of affordability very important at a time when we are all trying to reduce the cost of electrification».
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Electric car for the middle class? Stellantis asks for subsidies from EU governments: “They support consumers”
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