Multinational OEM Stellantis is confident it can compete in an increasingly low-cost BEV market, according to CEO Carlos Tavares.
Stellantis is aiming to beat its peers on price with the launch of the Citroen EC3, a B-section BEV that will be sold in the European market at €23,300 ($25,000) in the mid-term. A smaller version will retail at €19,990.
"At this price, this product is going to represent an affordable offering to our middle-class customers," says Tavares, speaking on the firm's full year 2023 results.
Tavares alluded to a raft of further releases this year, mainly targeting the C-segment, in which he says the conglomerate is currently under-represented.
"We are increasing our BEV offensive. We already have 30 models on sale in 2023, and we are going to move from 30 to 48,” he says, confirming that eight of these eighteen new models will be for the US market.
Stellantis is confident it can make models at low prices profitably, although CFO Natalie Knight admits that "competitive market conditions leave less room for price increases."
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But there is some scepticism among analysts that the firm can continue to hit positive margins at these price levels, especially after the company's operating profits fell by 10pc in the second half of 2023.
"It seems to me that EV adoption is not just about dropping the price. We have seen the aggressive price drops, and that has not really worked," says Jefferies analyst Philippe Houchois.
Knight admits that the company's ICE portfolio will have to do some heavy lifting to help sustain the firm's profits.
"While we are proud to say that EVs and PHE vehicles deliver solid profitability for us, they are still not yet at the levels of our ICE vehicles," she says.
Other OEMs are targeting low prices and high volumes ahead of margins, with Stellantis's closest European rival Renault about to release its Renault 5, Chinese OEMs set to expand export infrastructure to Europe, and Tesla promising an affordable compact EV by 2026.
Stellantis's overall sales in January were up by 23pc year-on-year, with Opel (+35.9pc) and Fiat identified as “growing in the BEV segment” across passenger and commercial vehicles. But the sales rise came from a low base.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
