Carlos Tavares, CEO of Stellantis, has issued a stern warning about the potential fallout from imposing tariffs on Chinese electric vehicles (EVs) in Europe and the United States. Speaking at the CES 2023 in Las Vegas, Tavares posed in front of the Ram 1500 Revolution electric concept pickup truck, highlighting the company’s EV ambitions amidst growing trade tensions.
In a recent interview, Tavares expressed deep concerns over the impact of tariffs on jobs and production in the European EV market. “Tariffs on Chinese vehicles are a major trap,” Tavares stated. “They won’t shield Western automakers from the need to restructure in response to the cost advantages held by Chinese manufacturers.”
The European Commission is set to make an initial decision on June 5 regarding potential tariffs on Chinese EV imports, following the U.S.’s lead in considering duties of up to 100% on these imports by August. Tavares warned that such tariffs would only escalate inflation and hinder market dynamics. “Imposing tariffs would simply drive up costs, affecting both sales and production,” he noted. “We are not talking about a Darwinian period; we are in it.”
Tavares also highlighted the broader social implications of these measures. “When you try to offset a 30% cost competitiveness edge in favour of the Chinese, there are inevitable social consequences,” he said. “Governments, particularly in Europe, are reluctant to confront this reality.”
The CEO’s comments come as Chinese automakers rapidly increase their presence in Europe, with sales projected to reach 1.5 million vehicles, capturing a 10% market share. “If we allow Chinese OEMs to grow unchecked, it will lead to overcapacity unless we actively compete,” Tavares warned.
Despite the challenges, Tavares remains optimistic about ongoing discussions with labour unions at Stellantis’ European operations. “Most of the time, our unions understand the risks we face and support our strategies to navigate this period,” he shared.
In a strategic move to counter the Chinese competition, Stellantis announced plans to start selling EVs from its Leapmotor partnership outside China, beginning in Europe this September. This joint venture, the first of its kind, aims to enhance Stellantis’ global portfolio with budget-friendly vehicles.
“We aim to integrate the best of Chinese manufacturing into our strategy,” Tavares explained. “Instead of merely defending against the Chinese offensive, we want to become a part of it.”
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