Written by Joseph White and Christoph Stetz
MUNICH (Reuters) – Stellantis (NYSE:) expects a big fight with Chinese rivals in the European electric vehicle market and expects serious consequences as a result, group CEO Carlos Tavares said on Wednesday.
Tavares said tariffs on Chinese cars imported into Europe and the United States are a “big trap for countries going down this path” and will not allow Western automakers to avoid restructuring to meet the challenge posed by low-cost Chinese manufacturers.
Tavares said the tariffs would only increase inflation in the regions where they are imposed, which could affect sales and production.
“We are not talking about a Darwinian period, we are in it,” Tavares said at the Reuters Events Automotive Conference in Europe, adding that the price battle with Asian rivals would be “very difficult.”
The European Commission will unveil a preliminary decision on potential tariffs on Chinese electric vehicle imports on June 5, and the United States has said it will impose 100% tariffs to block Chinese electric vehicle charging. China threatens to impose counter-tariffs.
“When you fight competition to absorb 30% of the cost competitiveness of the Chinese, there are social consequences. But governments, European governments, don't want to face that reality now.”
Chinese automakers are already on track to sell 1.5 million vehicles in Europe, equivalent to a 10% market share and up to 10 assembly plants with a production value, Tavares said.
“If we allow the share of Chinese OEMs to grow… obviously you will create excess capacity, unless you fight that competition,” Tavares said.
Tavares said Stellantis is having “very useful discussions” with trade unions in its European operations: “For the most part they agree with us in terms of the risks we face and how we should get through this period.”