Thursday, April 25, 2024
NewsPressure Builds for EV Automakers to Partner Against Upstart Competiton

Pressure Builds for EV Automakers to Partner Against Upstart Competiton

The big automakers are trailing on electric

  • EV market heats up with Chinese automakers moving into Europe

  • Sales slump a big challenge for legacy car companies


A new report says that some of the world’s largest automakers are looking at partnering with their biggest enemies. The moves could happen as Volkswagen, Renault, and Stellantis look to fend off cheaper electric cars from China and other looming threats.

Stellantis CEO Carlos Tavares told Bloomberg that there is a “perfect recognition that in the future, the companies which are not fit to face the Chinese competition will put themselves in trouble.”

The CEO has not minced words on the possible threats of a rapidly changing market. Just weeks ago, he said that the move to offer more affordable EVs could end in a “bloodbath” if automakers weren’t ready.

Traditional automakers are well behind the upstarts when it comes to EVs. Volkswagen led the legacy companies with 740,000 EV sales last year, while BMW and Stellantis trail with fewer than half. Tesla, meanwhile, sold 1.8m EVs last year and China’s BYD sold 1.6M.

With new emissions rules coming into effect in the EU next year, the potential is there for fines in the billions of euros for companies that can’t sell enough EVs. At the same time, EV sales are slowing while more China-built models are arriving—some with prices nearly 10 thousand euros less than their competition.

The report offers multiple possibilities. Renault’s CEO, Luca de Meo, has been looking at an alliance much like the one that created Airbus to compete with Boeing. Tavares at Stellantis has discussed mergers and acquisitions, even with competitors. VW has also talked about new partnerships.

One alternative is increased regulation. The European Commission is already investigating China’s industry subsidies for electric vehicle manufacturers. If the government is found to be unfairly supporting those electrics, it could end in tariffs that raise prices.

 

 

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