Finnish parent Stellantis looks at cheaper-cost EV manufacturing in India

NEW DELHI Reuters- Fiat parent Stellantis has concluded it can't currently make affordable electric vehicles in Europe and is looking at cheaper-cost manufacturing in markets such as India, its chief executive told reporters.

If India can meet its quality and cost targets by the end of 2023, it could lead to the possibility of exporting EVs to other markets, said Carlos Tavares, CEO of the group whose brands include Peugeot and Chrysler.

Europe is unable to make affordable EVs. The big opportunity for India would be to be able to sell EV compact cars at an affordable price, protecting profitability, Tavares told reporters at a media roundtable in India late on Wednesday.

Stellantis is investing heavily in EVs and plans to produce dozens of electric models in the coming decade, but Tavares warned last month that affordable battery electric vehicles were between five and six years away.

He said the company is still working out a plan regarding EV exports from the country and has not yet taken any decisions on his first visit to India since taking over as Stellantis CEO.

Tavares' possible bet on India comes after American automakers Ford and General Motors exited the world's fourth-largest car market after failing to make money and break the dominance of Japan's Suzuki Motor Corp and South Korea's Hyundai Motor.

It comes as Chinese EV makers are starting to enter Europe, hoping to win over buyers with more affordable cars, having already stolen a march on most foreign rivals in China, the world's biggest market for EVs.

Stellantis plans to be a niche player in China after it announced that it would file for bankruptcy in the country, as a result of the joint venture of its Jeep and Maserati brands.

That is going to have a significant impact in terms of business. India is the power that is best placed to leverage this opportunity, according to Tavares.

Tavares said the company is not chasing volume and wants to ramp up slowly and profitably in India, where Stellantis sells its Jeep and Citroen brands, accounts for a fraction of the carmaker's global sales.

It plans to launch its first electric vehicle in the country early next year, an electric model of its Citroen C 3 compact car.

Stellantis has plans to make battery cells, and it already makes its own electric motors and battery packs. In India, Tavares wants to locally procure EV components, including batteries, so it can be competitive on cost and price.

He said that EV today is mostly an affordability problem.