Carmaker Stellantis Ceo Wary Of Chinese Offensive As Market Moves Into Electric Vehicles

FILE - This photo shows the Stellantis sign outside the Chrysler Technology Center in Auburn Hills, Mich, on Jan. 19, 2021. Carmaker Stellantis on Thursday, Feb. 15, 2024  reported an 13% decrease in net profits in the second half of 2023 due to the impact of strikes in North America, its profit center, as it heads into year it described as "turbulent." (AP Photo/Carlos Osorio, File)
FILE - This photo shows the Stellantis sign outside the Chrysler Technology Center in Auburn Hills, Mich, on Jan. 19, 2021. Carmaker Stellantis on Thursday, Feb. 15, 2024 reported an 13% decrease in net profits in the second half of 2023 due to the impact of strikes in North America, its profit center, as it heads into year it described as "turbulent." (AP Photo/Carlos Osorio, File)

MILAN (AP) — Stellantis CEO Carlos Tavares has his attention fixed on Chinese competitors as the automaker amps up the launch of its electric vehicle strategy.

Stellantis will launch 18 new electric vehicles this year, eight of those in North America, increasing its global EV offerings by 60%. But Tavares told reporters during earnings calls Thursday that “the job is not done” until prices on electric vehicles come down to the level of combustion engines — something that Chinese manufacturers are already able to achieve through lower labor costs.

“The Chinese offensive is possibly the biggest risk that companies like Tesla and ourselves are facing right now,’’ Tavares told reporters. “We have to work very, very hard to make sure that we bring out consumers better offerings than the Chinese.

He compared the Chinese offensive in the United States to the arrival of Japanese competitors in the 1970s and Korean carmakers in the 1990s, taking a significant market share.

“So do we want that the Chinese carmakers take a significant share of the U.S. market in the next 20 years, or the next 10 years? I don’t know. That is the question. So how do we prevent that from happening beyond all the protectionist decisions, which are out of my reach? Well, by making our consumers happy.”

In Europe, Stellantis is taking orders on the new Citroen e-C3, aimed at the middle class and selling for 23,300 euros ($25,000) with a range of 320 kilometers (199 miles), and will soon offer a 200-kilometer range entry model at 19,990 euros from 2025, both being sold at a profit. Beyond price, he said consumers need to see a “dense charging network” to buy into the technology.

Tavares suggested that government incentives offering subsidies to purchasers are the best way to get consumers to buy electric vehicles, saying in countries which offer such plans, EV sales are boosted by 20,000 additional units.

He repeated that incentives might be a way out of a tiff with the Italian government, which has slammed Stellantis for not having plants running at higher capacity. The Mirafiori plant in Turin is reducing production to one shift, putting workers on temporary layoff schemes, through March.

Tavares said he shares the Italian government’s goal that Stellantis should produce 1 million vehicles a year.

“An additional 20,000 units in a plant like Mirafiori that is producing the electric version of the Fiat 500, is quite significant,’’ he said, adding that incentives to boost EV sales would be a win-win for both Stellantis and Italy, by boosting domestic car production.

Stellantis earlier Thursday reported an 13% decrease in net profits in the second half of 2023 due to the impact of strikes in North America, its profit center, as it heads into a year it expects to be “turbulent.”

The world’s third-largest carmaker, formed three years ago through the Peugeot PSA-FCA FiatChrysler merger, reported net profit of 7.7 billion euros ($8.3 billion) in the second half, down from 8.8 billion in the same period. Full-year profit rose 11% to 18.6 billion euros .

Strikes in North America idled plants at all three Detroit automakers for six weeks last fall, leading to a deal that increased pay across the industry and forced automakers to absorb higher vehicle costs as it shifts away from gasoline-fueled vehicles.

Stellantis' North American revenues, accounting for nearly half of the carmaker’s total, dropped 5.6% in the second half of the year to 40.5 billion euros from 43 billion euros on lower shipments that eroded its market share.

Stellantis CFO Natalie Knight noted ongoing geopolitical uncertainty shaping up “what we think is going to be a pretty turbulent year.” While Stellantis won’t be shouldering strike costs, it will face higher labor costs due in North America due to the union deal, she noted. Collective bargaining last year cost the company 428 million euros.

Knight expected tailwinds from lower raw materials and logistics costs. Impact from the attacks on global shipping by Houthi rebels in the Red Sea has been minimal, she said, as Stellantis has shifted shipments of high-voltage batteries and gear boxes to airfreight.

Stellantis’ European revenues were flat in the second half of the year at 31.7 billion euros. South America was flat at 8.4 billion euros, while the Middle East surged 71% to 5.9 billion euros and China, India and the Pacific second half revenues slid by a third, to 1.5 billion.

Stellantis paid shareholders 6.6 billion euros last year through dividends and buybacks, up 53% from 2022. The carmaker said it plans to increase dividend payments by 16% this year, to 1.55 euros per share, and buy back another 3 billion euros in shares.