Plant shutdowns are inevitable if car makers can’t absorb the higher costs of electric cars and the market shrinks as a result, Stellantis CEO Carlos Tavares has warned.
Tavares was responding to questions at the CES tech event held in Las Vegas last week about Stellantis’s decision to indefinitely idle the company’s Jeep Cherokee plant in Belvidere, Illinois, starting February.
Electric cars are 40% more expensive to build than combustion-engine equivalents, said Tavares. Companies most work to absorb that cost or the cars will become unaffordable for the bulk of buyers, reducing the size of the market and threatening jobs, he warned.
“Anywhere you introduce technology that is 40% more expensive than the previous one you need to work hard in improving your business model through fixed and variable costs,” said Tavares.