Electric Car Price War: Burden For Supply, Profit For Consumers?

All-new Citroen C3. (Doc. Stellantis)

JAKARTA - The automotive industry is moving towards the era of electric cars. But this change turns out to be according to the CEO of Stellantis, Carlos Tavares is carrying a "significant load" for auto component suppliers, especially with the current electric car price war.

Why? According to him, the cost of producing electric cars is 40-50 percent higher than for gasoline cars. As a result, car manufacturers such as Stellantis must rack their brains to cut production costs in all lines, including supply chains and logistics.

"We will see a large shift in the supply base. Component sources will move from Western countries to the country with the best production costs," said Tavares, quoted from Autonews, May 31.

Tavares sees the competition for electric cars currently leaning more towards price wars.

Another impact of the high cost of producing electric cars is consumer purchasing power. Many are still reluctant to buy electric cars because of their expensive prices. According to Tavares, consumers in Western countries ask their government to provide subsidies or incentives to make the price of electric cars more affordable.

Interestingly, Stellantis sees this as an opportunity. They plan to continue producing cars with a "multi-energy" platform. This is a platform that can be used for electric cars and gasoline cars, including hybrids. With this platform, Stellantis hopes to offer a wider and more flexible product variety.

Stellantis' efforts to reduce the selling price of electric cars can be seen from their plan to market Jeeps below 25,000 US dollars (Rp405 million) in the United States. Previously, they had also launched Citroen e-C3 for 23,300 US dollars (Rp377 million) in Europe. In addition, Stellantis is working with Leapmotor, a Chinese electric car company, to sell Leapmotor T03 for under 20,000 euros (Rp351 million) in Europe.

As for the potential merger and acquisition (M&A), Tavares said the main focus right now is to keep Stellantis in a strong business condition.

"If there is an opportunity, of course we will consider it, but we must be in a state of readiness when that opportunity arrives," he concluded.