Listening to Mr. Tavares carefully I find it odd that this indicates Stellantis is doomed. Carlos Tavares has a long standing habit of thinking clearly. That is how he's been successful at managing profitable operations for some companies that have had huge losses for decades. Think Fiat, Chrysler, Opel.
Rationally his descriptions of infrastructure is both rational and practical.
1. That clean energy production and distribution is essential is hardly something with which we would disagree. He sees Germany retreating to coal. Brazil retreating to fossil fuels. The US dirty coal:
joe-manchin-senator-millions-coal-grant-town-west-virginia
Then think of India, nearly all of Africa, South American and Asia.
Is Tavares myopic to declare that logically, clean power should be first?
Yes, Tavares is myopic to declare that clean power should come first.
EVs already have less societal cost for pollution, even with current grid mix. This has been true at least as long ago as 2006 when Elon published the Tesla Motors Master Plan and Marc Tarpenning and Martin Eberhard published a white paper debunking the "long tailpipe" argument. BEVs produce less greenhouse gas emissions and move the toxic health-hazard pollutants from combustion (nitrous oxides, carbon monoxide, soot, etc.) away from population centers. The only thing worse about BEV pollution is fine particulates from tire dust due to the greater vehicle weight and motor power.
www.tesla.com
Also, clean power growth is already happening fast, all without help from Stellantis. Total global solar photovoltaic capacity has been riding a steady exponential growth curve for decades, with just 3 years between doublings. With that rate of growth and with solar already at ~5% of global electricity supply, it's going to become the majority of electric power production about 10 years from now, and by 2040-ish solar/wind/batteries will have wiped out almost all competing energy sources, including the other two thirds of global energy consumption that currently isn't electrified. The conversion of electricity generation to renewables is happening orders of magnitude faster than the conversion of the global motor vehicle fleet to BEVs.
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Who cares if it's possible to cherry-pick a couple of examples of countries foolishly "retreating to coal"? Data from the world as a whole portends total annihilation of the business case for thermal power stations (coal, gas, nuclear, geothermal, biomass) caused by an overwhelming, unstoppable onslaught from solar, wind and batteries. In the world's richest countries, where most of the total car-driving is occurring for now and the foreseeable future, coal consumption has fallen to about half of its peak from around 2007. When solar prices hit $10/MWh, who is going to keep operating those fossil fuel power plants? Does Carlos Tavares even believe that solar energy is headed to $10/MWh and below, even though understanding this fact is critical to predicting the direction his industry is headed?
Joe Manchin can do whatever he wants to try to save West Virginia coal, but more bankruptcies are inevitably coming. The coal mines and power plants will continue to retire and the people working in the industry will find something else to do or move out of WV. It's like dumping a bucket of water on a fish flopping around on the ground and hoping that the fish will survive. Lazard estimates now show that solar PV has eclipsed the
marginal operating cost of fully depreciated coal plants in the USA.
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2. As for charging infrastructure. Even North America, Western Europe and China have gigantic deficiencies in charging infrastructure. Is he wrong about that one?
Yes, Tavares is totally wrong about that too.
This is a dynamic transition with feedback loops. Charging infrastructure is growing alongside the BEV fleet. What matters is whether there is sufficient charging infrastructure to provide demand for BEVs for continued global growth of BEV production and sales . What does
not matter is whether sufficient charging infrastructure exists right now to support the entire end game of 100% BEVs, because all those BEVs don't exist yet and by the time they do exist, the charging will exist too. We know that today the demand for BEVs is high relative to supply. The sold-out order backlogs, high prices, consumer research and heavy investment in production capacity expansion conclusively demonstrate this fact. Thus, we have enough charging infrastructure.
History is filled with examples of new technology markets that relied on concurrent growth of supporting infrastructure. Someone mentioned iPhones and 5G. How about home appliances and electricity grids? Cars and gas stations + asphalt roads? Printing press and paper supply? Software and computers to run it on? The early adopters find a way to make it work for niche use cases, and momentum builds from there with end uses and infrastructure developing in lockstep with each other.
3. As for affordable BEV for the world, is he incorrect? Right now Stellantis sells the most affordable mainstream BEV's from Fiat 500, Peugeot e208 to Ram ProMaster and a few dozen more:
Amazon will also put its software in “millions” of vehicles.
www.theverge.com
Yes, his opinion on that is incorrect too.
Also, I guarantee Stellantis is selling those BEVs at a loss, meaning that those are subsidized BEVs. Anything can be made affordable by selling it for less than it costs to produce, but that's not sustainable or scalable. I'm not impressed with their efforts. The previous CEO of Fiat Chrysler, Sergio Marchionne, explicitly and bluntly said that the company was only attempting to make compliance EVs:
“I hope you don’t buy it because every time I sell one it costs me $14,000,” he said to the audience at the Brookings Institution about the 500e. “I’m honest enough to tell you that."
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“I will sell the (minimum) of what I need to sell and not one more,” Marchionne said of the 500e.
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“If we just build those vehicles, we’ll be back asking ... in Washington for a second bailout because we’ll be bankrupt,” Marchionne said of electric cars. (
Source)
These comments came in 2014. Are we to believe that in 8 years Stellantis has made so much progress on A) caring about the future of the planet and their own long-term financial solvency and B) BEV technology that suddenly they are a world leader in BEV affordability? Or is it more likely that these still are compliance cars and nothing more?
Again, transitioning to sustainable mobility is a
dynamic problem, so the time dimension can't be ignored. Tavares could have figured out the optimal approach by reviewing the 2006 Master Plan. Current EVs are selling out at current prices, which means that the market has enough forcing function to continue growing at top speed. We will get to the promised land as long as this condition constantly remains true while we descend the Wright's Law curve for BEV technology cost. EVs don't need to be cheap in 2022. They will need to be cheap by 2032, assuming we haven't largely moved on to robotaxis by then.
4. He says Stellantis is determined to meet the goals already established and continue to do so. Their concentration on BEV delivery trucks is various sizes.
Then there are the actual results to date:
One of the largest global automakers, Stellantis, posted its first-half earnings for 2022. Stellantis’s electrification strategy is paying off so...
electrek.co
Stellantis's "goals already established" are a joke.
Behold a plan for bankruptcy:
- 75+ different BEV models in their portfolio by 2030 in addition to 25% sales of ICEVs and hybrids
- The same "Dare Forward 2030" presentation emphasizes how important it is to "reduce complexity at all levels"...lol
- Model 3 & Y alone could sell as much or more in 2025 than Stellantis's entire 2030 goal of 5M BEVs
- Same old foolish strategy of having shared platforms used by both ICE and battery powertrains instead of just optimizing a custom BEV design
- Hydrogen fuel cells still viewed as core part of future market for trucks and vans
- Not carbon neutral until 2038
- Still investing capital in new generations of combustion engines
Tavares here in the screenshot below presents a misleading table comparing the best-case scenario refueling time for an H2 van (assuming the pump is nearby and ready to pump) with battery recharge time using a wimpy 11 kW wall charger.
All that said, Carlos Tavares is not a visionary. He's practical, deliberate and highly successful in saving large manufacturers from ruin. To equate him with idiots and fools, climate deniers and perry bureaucrats is not correct.
CEOs are
supposed to be visionary leaders. That's literally a CEO's main job, especially in an industry undergoing a major once-in-a-lifetime technology disruption. Merely being a disciplined manager is insufficient. A CEO must lead
and manage. The CEO should be telling people what the future is going to look like, why it'll be great, and persuading them to want to do the work to get there. There is no way Tavares's wishy-washy public comments about BEVs are helping Stellantis recruit the best and most motivated people...who are all going to Tesla.
Please listen carefully. He's pleading for clean energy and charging infrastructure.
Right. Begging and pleading, and proffering that as an excuse for sitting and waiting another 10 or 20 years for aggressive BEV growth, if only it weren't for pesky tree-hugging governments meddling in their market. I can think of another car manufacturer that has been actively helping with clean energy and charging infrastructure for the last decade.
Keep also in mind that their largest single global market share is in Brazil. They sell several BEV's here, but there are few buyers. They're pushing anyway, as they are also doing in other less electrified markets, none of which have anything Tesla yet, nor any large-scale clean energy.
Brazil may be Stellantis's best market for share of volume, but Stellantis makes the majority of their profit in North America from selling Jeep off-road toys and Ram pickups. North America accounted for €7.7B, or 62%, of their total €12.4B of reported "adjusted operating income" in H1 2022. Europe was another €3.3B, whereas all of South America was €1B. With ~90% of Stellantis' income coming from North America and Europe, I doubt the Brazilian market is a cornerstone of the company's near-term and medium-term electrification priorities. Their official strategic plan is heavily focused on electrification in Europe where the emissions regulations are most stringent, which is fitting because their plan is to produce compliance cars while pretending to care about the health of people and our biosphere.
Stellantis has no viable solution for making Jeeps and Rams electric at an affordable price with market-competitive specs, because they don't have the necessary technology nor do they have the courage and humility to copy the Cybertruck.
(Edit: By the way, Brazil and most of the rest of Latin America already have extremely high percentages of renewables in their electricity mixes, especially if we count hydroelectric dams.)
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