Tesla EV price cuts could lead to ‘bloodbath’: Stellantis CEO

Tesla EV price cuts could lead to ‘bloodbath’: Stellantis CEO

In the ever-evolving landscape of electric vehicles (EVs), Stellantis CEO Carlos Tavares has warned that engaging in a price war with Tesla could lead to severe repercussions. Cautioning against the potential for a "bloodbath," CEO Tavares expressed serious concern over the impact of aggressive price cuts on manufacturers’ profitability. Emphasizing the importance of maintaining a sustainable pricing strategy amid Tesla’s continuous price cuts, the top executive affirmed that his company wouldn’t follow suit.

Following the recent unveiling of the automotive group’s second EV-dedicated platform for next-generation vehicles, set to underpin the inaugural Jeep and Dodge electric models in the U.S. market, the top executive stressed that the company needed to resist succumbing to price pressures that could jeopardize profits. Citing the hazardous consequences of ignoring the true costs of production, the seasoned executive voiced concerns that unchecked price cuts could make several manufacturers vulnerable to takeovers.

Specifically, Tavares targeted Tesla, highlighting the potential pitfalls of aggressively slashing prices without considering the impact on overall profitability. The caution comes at a time when the Elon Musk-led EV giant continues to consistently reducing prices across its lineup, making strategic adjustments to boost its sales in the global market.

Speaking on the topic, Tavares said, “If you go and cut pricing disregarding the reality of your costs, you will have a bloodbath. I know a company that has brutally cut pricing and their profitability has brutally collapsed.”

Stellantis, an automobile group born out of the merger between Fiat Chrysler and PSA Group in the year of 2021, is one of the largest sellers of EVs in Europe. As it is preparing to introduce its first all-electric models in the U.S. market, including the Jeep Wagoneer S and the Dodge Charger EV, the top executive’s emphasis on maintaining profitability becomes crucial. With the planned launch of electric models under the Dodge, Jeep, and Ram brands, the group is all set to double its all-electric lineup.

While the electric shift is gaining momentum, Stellantis aims to avoid the pitfalls of an undiscerning price war and concentrate on delivering high-quality, innovative EVs. Tavares' comments underline the importance of maintaining a gentle balance between market competitiveness and guaranteeing a robust bottom line.

By prioritizing responsible pricing strategies over short-term sales, the Amsterdam, Netherlands-headquartered automaker has underscored its dedication to long-term success in the dynamic world of EVs.