Carlos Tavares has been a long-time critic of a forced electrification process. Although Stellantis does not need to buy carbon credits from Tesla anymore due to its own EVs, its CEO wonders if they will be affordable enough for people to buy them. If they aren’t, he fears we may have a worse problem with carbon emissions than we had before.
The rationale is simple: car companies today have to make affordable vehicles that comply with emission standards, and these cars can start at around €10,000 in Europe. However, if they become electric, their prices may rise to up to more than €30,000.
If these €10,000 options are not available anymore, the customers that bought them will get used combustion-engined cars instead, some with outdated engines that pollute way more than brand-new ones.
In such a scenario, you could have an entire range of fully electric cars that would have no impact in lowering emissions, on the contrary. Being too expensive for most people to buy them, they would make carbon emissions get higher.
The Stellantis CEO also said that forcing car companies to sell EVs if they want to survive will also have social impacts. The people who developed and manufactured combustion engines will either have to dedicate themselves to motors and inverters or be out of business.
With higher prices, car companies will sell fewer cars, which means they will not need as many employees as they do now. In other words, they may survive but will be much smaller than they are today.
That requires an analysis of how many affordable cars are for sale today and their sales volumes. If you take Ford as an example, it pledged to sell only trucks and SUVs from now on precisely to make more profits. It is not unlikely that more expensive cars are the ones with higher sales volumes.
Take the US market as an example. In 2019, the Toyota RAV4 was the best-selling passenger car, with 448,071 units. The overall winner was the Ford F-150, with 896,526 units. Car And Driver published a list with the 25 best-selling vehicles in that year, and the cheapest ones were the Toyota Corolla and the Nissan Sentra, which start at around $20,000.And they are not even in the top positions.
In Europe, things are different. Affordable cars are responsible for most sales, with the charts led by vehicles such as the Renault Clio, Volkswagen Polo, Ford Fiesta, Peugeot 208, and Dacia Sandero. Tavares must have had that perspective in mind when he expressed his concerns.
This is a similar warning to that Bill Gates and UNCTAD made in August 2020: if electrified mobility focuses only on those that can afford to buy an electric car, the pollution problem will continue. The cars that people in Europe, the US, and China don’t want to buy anymore will be exported to developing and poor countries. They will just pollute somewhere else.
As they warned, either we clean personal transportation together, leaving no one behind, or we may make the issue worse with the best of intentions. Unfortunately, we’re not even close to discussing this as much as we should.