Stellantis Boss Warns of Auto Industry "Bloodbath"
Carlos Tavares cautions against rapid EV price cuts
Price slashing could drive down profits and squeeze margins
Stellantis CEO Carlos Tavares has warned that carmakers who slash electric vehicle (EV) prices too quickly could trigger a damaging industry-wide "bloodbath."
Tavares, whose company owns brands like Chrysler, Peugeot, and Fiat, expressed concern that automakers may be tempted to lower EV prices to boost sales amid sluggish demand.
However, he cautioned that such a move could have devastating consequences by eroding profit margins and driving down the overall value of EVs.
"If you lower prices too fast and you don't take into account the reality of your costs, you will create a bloodbath," Tavares said in an interview with the Financial Times.
Tavares's comments come amid a challenging period for the auto industry. Electric vehicle sales have been slower than anticipated due to factors such as rising inflation, supply chain disruptions, and consumer reluctance. Competition in the EV market is also intensifying, with new entrants like Tesla and BYD gaining significant market share.
Against this backdrop, some automakers have considered price cuts to attract buyers. However, Tavares believes that this approach would damage the industry in the long run by creating a race to the bottom in terms of pricing.
Instead, Tavares advocates for a more measured approach that focuses on improving EV technology and affordability through economies of scale and innovation.
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