Automotive News Canada - March 2024 - 20

20
* MARCH 2024
Tavares gears up for EV-driven industry shakeout
With China looming,
the Stellantis CEO sees
the need for automakers
to consolidate, but doesn't
expect protectionism
By JAMIE BUTTERS
AUTOMOTIVE NEWS
FLUSH WITH LIGHT-TRUCK PROFITS
and a balance sheet that hasn't been
drained by ill-planned spending on electric
vehicles, Stellantis CEO Carlos
Tavares is ready to take on the Chinese
automakers and everyone
else in what he sees
as a survival-of-the-fittest
shakeout emerging.
NEWS ANALYSIS
test shakeout emerging.
Tavares estimates the industry has
two to three years to bring the price of
EVs down to parity with internal combustion
vehicles. By then, Chinese automakers
will start making inroads in
North America - presumably by assembling
vehicles in Mexico - and put tremendous
pressure on EV profits, as they
are already doing in Europe.
Within a decade, Tavares foresees consolidation;
there would be five or so global
giants, including Stellantis. So, while
he isn't lobbying to keep Chinese automakers
out of the United States, he might
be suggesting more openness to mergers
that would have previously made regulators
uncomfortable.
The pressure to make EVs affordable
and profitable is " why I think it's
Darwinian, " he told reporters in New
York Feb. 20. " That's why I think that in
a few years, if you want to have the scale
to be as efficient as a company like BYD,
can we afford to be fragmented as we are
today? But that's the question for the
industry - not for Stellantis, because I
believe we have the scale. "
A THIRD WAVE FROM ASIA
His approach has the benefit of sounding
noble, while potentially applying
pressure on rivals General Motors and
Ford. If one could be pressed into a merger
with Stellantis - not unlike what
the late Fiat Chrysler Automobiles CEO
Sergio Marchionne long envisioned -
the profit potential could be profound.
While dismissing the need for and the
effectiveness of protectionism, Tavares
also spoke ominously of a third wave
of Asian automakers: First came the
Japanese, who rose to prominence in the
'70s, then the Koreans in the '90s. Now, a
" Chinese offensive " is taking shape, he
warned.
Indeed, while Toyota, Honda and
Hyundai have been disruptive to U.S.
automakers, they have provided consumers
with more choices and opened doors
for many dealers willing to try something
new.
Tavares said he agrees with Tesla CEO
Elon Musk's assessment that Chinese
automakers, which can sell EVs at the
price of an internal combustion car, are
the biggest threat to Western automakers,
but not that the solution is protectionism
- especially if such policies would imperil
the United States-Mexico-Canada freetrade
agreement.
" I'm not asking for any kind of protection,
because anyway, we are a global
company, so I will not be protected everywhere.
So, I need to be facing the harsh
competition and being able - through
my own skills - to compete with them. "
STELLANTIS HAS A CHINESE PARTNER
Another reason Tavares need not fear
this third Asian wave: Stellantis can be a
part of it.
Stellantis, which earned more than US
$21 billion last year, bought a 21-per-cent
stake in Chinese automaker Leapmotor
- not one of the market's giants. The two
companies then created joint venture
Leapmotor International, which is 51-percent
owned by Stellantis and consolidated
in its financial statements.
It manages all exports of Leapmotor
vehicles from China. Tavares is also contemplating
making Leapmotor-derived
cars in Italy. And he doesn't rule out anyplace
the company does business within
a regulatory bubble, such as North
America.
" There is no reason today to exclude
any country that has a Stellantis plant
inside of the bubble. "
Tavares said one could think of
Leapmotor as the company's " 15th
brand. "
A crucial benefit of the investment
is being able to benchmark against the
Chinese automaker's lower costs, he
said. He called the comparisons " very
precise and eye-catching, " informing his
estimation that Chinese companies have
a roughly 30-per-cent cost advantage.
'AFFORDABILITY FOR THE MIDDLE CLASS'
This benchmarking spurs his drive to
cut costs, compete and survive.
" What we want is to protect the
affordability for the middle class of the
zero-emission vehicle, " Tavares said,
adding that 70 to 80 per cent of people
drive to work.
The key is battery chemistry.
I'm not asking for any
kind of protection . . .
we are a global
company, so I will
not be protected
everywhere.
So, I need to be
facing the harsh
competition
and being able
- through my
own skills -
to compete
with " the
Chinese.
Carlos Tavares
CEO, Stellantis
Stellantis is 45-per-cent owner
of Automotive Cell Co., along with
Mercedes-Benz and Saft, a unit of
TotalEnergy. In addition, it has invested
in Factorial Energy, which specializes in
solid-state batteries; Lyten, which uses
lithium sulfur chemistry; and Tiamat, a
sodium ion battery company.
It aims to double energy density,
which would allow making batteries
that are smaller and lighter, and to make
them from abundant raw materials that
are less prone to inflation than scarce
minerals.
" We need to control the core of the
core of the core, which is the battery
cell, " he said.
KEY ELECTIONS
In the medium term, the regulatory
environment is volatile, Tavares said,
depending on the European Parliament
elections in spring and the U.S. presidential
election in November.
Essentially, the elections are a choice
between " dogmatic " progressives racing
to slow climate change and " populists "
who worry more about affordabiliPHOTO:
TOM CARL
ty and blame China for global warming,
he said.
Stellantis platforms can work for battery-powered
or internal combustion
vehicles, so the company can pivot as
required by administrations on either
side of the Atlantic, he said.
While the industry is understandably
anxious about the rate of EV adoption,
the need to address climate change is
becoming more imminent. In the Paris
Agreement from 2015, nations pledged
to try to limit the global temperature
increase to 1.5 C, but to no avail.
" At the same time, people are getting
more educated, " Tavares said.
" They understand that for the last eight
months, we were above 1.5 degrees of
warming. They understand that this is
not a story for 2040, it's now. This is happening
now. " - ANC
- Jamie Butters is Executive Editor
of sibling publication Automotive News.
CIAS fills the building with 44 vehicle brands and record crowds
Turnout reflects nearly
60-per-cent increase in
the number of brands
for the 2024 auto show
By GREG LAYSON
DIGITAL AND MOBILE EDITOR
THE 2024 CANADIAN International
AutoShow (CIAS), set an attendance
record as 371,559 people took in the
10-day event at the Metro Toronto
Convention Centre.
A record 371,559 people attended CIAS this year, an
increase of 13,814 over the previous record set in 2019.
PHOTO: CIAS
The total attendance for the Feb.
16-25 event, which also includes
12,341 people who were at media
day and the VIP night on Feb. 15,
was 13,814 higher than the previous
record of 357,745 set in 2019.
Last year's CIAS drew 350,214
and the 2020 show, the last before
the COVID-19 pandemic, drew
334,194. There were no shows in
2021 and 2022 because the Ontario
government didn't allow large
public gatherings during the pandemic.
This
year, single-day attendance
records were set on four days.
" With so many new brands adding
to the roster of presenting manufacturers
this year, an expanded
indoor and outdoor test drive program
and a diverse and well-presented
series of features, the consumers
came out in force, " CIAS
General Manager Jason Campbell
said in a statement.
Newcomers included Fisker,
Rivian and Lotus.
There was more growth on the
floor of the convention centre this
year. Forty-four brands showcased
their vehicles, nearly 60 per cent
more than the 28 in 2023.
Among the brands that returned
for 2024 after a hiatus in 2023 was
Ford. Infiniti returned with a standalone
display.
The event's indoor-outdoor EV
test track featured more than 25
vehicles, twice the number than
were available last year.
" Expanding the show back to its
original full building format helped
spread the audience, and helped us
ensure a more positive consumer
experience, with more to see when
they got here, " Campbell said.
The 2025 CIAS will take place
Feb 14-23. - ANC

Automotive News Canada - March 2024

Table of Contents for the Digital Edition of Automotive News Canada - March 2024

Automotive News Canada - March 2024 - Intro
Automotive News Canada - March 2024 - 1
Automotive News Canada - March 2024 - 2
Automotive News Canada - March 2024 - 3
Automotive News Canada - March 2024 - 4
Automotive News Canada - March 2024 - 5
Automotive News Canada - March 2024 - 6
Automotive News Canada - March 2024 - 7
Automotive News Canada - March 2024 - 8
Automotive News Canada - March 2024 - 9
Automotive News Canada - March 2024 - 10
Automotive News Canada - March 2024 - I1
Automotive News Canada - March 2024 - I2
Automotive News Canada - March 2024 - 11
Automotive News Canada - March 2024 - 12
Automotive News Canada - March 2024 - 13
Automotive News Canada - March 2024 - 14
Automotive News Canada - March 2024 - 15
Automotive News Canada - March 2024 - 16
Automotive News Canada - March 2024 - 17
Automotive News Canada - March 2024 - 18
Automotive News Canada - March 2024 - 19
Automotive News Canada - March 2024 - 20
Automotive News Canada - March 2024 - 21
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Automotive News Canada - March 2024 - 24
Automotive News Canada - March 2024 - 25
Automotive News Canada - March 2024 - 26
Automotive News Canada - March 2024 - 27
Automotive News Canada - March 2024 - 28
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