Stellantis chief executive Carlos Tavares has no interest in seeing the company participate in a “race to the bottom” with aggressive price cuts that may hurt the profitability of some of its rivals.
While recently speaking in Milan at a presentation for the group’s new platform for large BEVs, Tavares said that Stellantis is well protected from a downtrend in prices thanks to it being one of the most profitable companies in the industry. He believes that should some carmakers cut prices too much, they could become takeover targets.
“If you go and cut pricing disregarding the reality of your costs, you will have a bloodbath. I am trying to avoid a race to the bottom,” he said. “I know a company that has brutally cut pricing and their profitability has brutally collapsed.”
Tesla initiated an electric vehicle price war over the past year in a bid to drive up its sales. The second best-seller of BEVs cut its prices numerous times throughout 2023 and most recently reduced prices of the Model Y in both China and Europe.
During his speech, Tavares added that Stellantis won’t be hit all that hard from ongoing disruptions to shipping being experienced across the Red Sea.
Read: Stellantis To Launch 8 New Models On STLA Large EV Platform That Supports ICE
“The travel will be longer, that’s true if you go around Africa,” he noted. “It may have an impact on the cost (…) so there may be good discussions about the cost and how we should mitigate that. But at this stage, I don’t see any other impact than that one. Of course, some of our competitors may have had some issues with that. It’s not our case. So far, it’s okay. Things are moving well.”
While some companies have said shipping delays have prompted them to temporarily pause production, Stellantis told Reuters earlier this month that it will rely more heavily on airfreight to deal with the supply disruptions.
