Stellantis CEO Says Rush to Affordable EVs Will End in Disaster

(Bloomberg) — Stellantis NV’s Carlos Tavares is gearing up for an era of auto-industry consolidation, predicting the rush to offer more affordable electric vehicles will end in a “bloodbath.” He’s paid particularly close attention to one company he perceives as vulnerable: Renault SA.

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The 65-year-old chief executive isn’t taking formal steps to pursue Renault, which is virtually off-limits due to the French state’s ownership and influence over the two manufacturers. What he has done is upstage his archrival at every turn, and ready his company to capitalize on any setbacks.

Renault hit just the sort of stumbling block Tavares has been waiting for this week, calling off a multiyear pursuit of an initial public offering for its EV business. In an exclusive interview, the Stellantis CEO questioned Renault’s strategy and whether it will have the scale to compete with his company and EV leaders Tesla Inc. and BYD Co.

“It’s my job to keep my eyes open. It’s my job to understand how the industry is going to survive this transition. It’s my job to make sure that my company will be one of the winners,” Tavares said Wednesday. “And if we are one of the winners, of course there will be opportunities.”

When announcing the cancellation of an IPO for Ampere, its EV and software business, Renault reiterated that it’s able to self-fund its future. The company also said stronger cash generation factored in its decision to call off the listing process.

A spokesperson for Renault declined to comment on Tavares’s remarks.


While the Peugeot-Renault rivalry dates back 125 years, Tavares has taken the one-upmanship to another level. He’s publicly criticized Renault’s carving-out of its EV business, and bristled at suggestions that Stellantis isn’t investing as much in France. He’s even arranged media events — including earnings — to front-run or coincide with Renault’s already-scheduled briefings.

Earlier this month, Tavares told reporters that automakers are engaged in a “race to the bottom” with EVs, cutting sticker prices faster than they’re reducing costs.

“In this world, which is totally Darwinian, the guys who are able to protect their numbers” are the ones ready for dealmaking, he told reporters Jan. 19. “As long as you see my numbers being at the appropriate level, then you can conclude that I’m ready for any kind of consolidation.”

Tavares’s counterpart at Renault, CEO Luca de Meo, declared the company “back from hell” roughly a year and a half into the pandemic, which devastated the already-weak manufacturer. Renault survived with the help of a €5 billion loan backed by the French state.

After stabilizing Renault, de Meo, 56, divvied the company up into five businesses units, including the EV business Ampere and its combustion engine and hybrid vehicle company, dubbed Horse.

Tavares said Wednesday that he has a lot of respect for de Meo. But when asked whether Stellantis would pursue a similar strategy, Tavares offers a resounding no.

“We are one Stellantis,” he said at the company’s annual shareholder meeting in April. “We are managing this company not with Old Co.-New Co., but with One Co.”

It’s Personal

The intense interest in Renault is personal for Tavares. He spent most of the first three decades of his career at the company, only to leave in dramatic fashion after openly angling for then-CEO Carlos Ghosn’s job. He was quickly hired to run Peugeot maker PSA Group, executed a turnaround and orchestrated its 2021 merger with Fiat Chrysler, forming Europe’s second-largest automaker.

Whereas Tavares has been bulking up on brands — starting with Peugeot and Citroën, acquiring Opel and Vauxhall, and then merging with the owner of Jeep, Fiat and Alfa Romeo — Renault has pulled back from its decades-long alliance with Nissan Motor Co.

The companies decided last year to dissolve a joint-purchasing organization that had been viewed as one of the more successful elements of their otherwise fraught relationship. In December, Renault started to sell off its stake in Nissan.

During the interview Wednesday, Tavares said Renault is moving closer to Chinese partners, alluding to its joint-venture agreement with China’s Zhejiang Geely Holding Group Co. to set up Horse. China’s Envision Group also is one of Renault’s main EV battery suppliers.

“We’ll see how this is going to unfold, including in the eyes of the French government,” Tavares said. “I have no specific interest in this company more than any other; I’m just observing that they have a different strategy.”


While Tavares’s dour view of Renault’s ability to pull off an IPO of Ampere proved prescient, acting on that omniscience is another matter.

The two companies combined employ around 80,000 full-time workers in France, and the state has used its shareholding in the companies and presence on their boards to protect jobs.

Government intervention also has been at the root of Renault’s star-crossed recent history of failed deals. Persistent efforts by Ghosn, 69, to combine Renault and Nissan while trying to balance state interests culminated in his takedown in late 2018. The next year, Fiat Chrysler briefly pursued a merger with Renault, then blamed political interference when it withdrew.

Another complicating factor: De Meo has had discussions with Volkswagen AG, Europe’s biggest carmaker, and others about jointly developing more affordable EVs.

“A partnership between Renault and Volkswagen may be the starting point of something that would put Renault under the dependence of Volkswagen,” Tavares said in the interview.

Different League

For the time being, Tavares is stoking the rivalry between France’s top carmakers in ways big and small.

Stellantis has poached several of Renault’s top executives and placed some in senior positions, to the detriment of seasoned Peugeot and Citroën managers. Among them are Florian Huettl, who heads the Opel brand; Uwe Hochgeschurtz, who oversees enlarged Europe; and Thierry Koskas, the CEO of Citroën.

The two companies have even quarreled over their event calendars. Renault and Stellantis will both report full-year results on Feb. 15, a date Renault announced on its website at least four months in advance. Stellantis told investors in January it would release earnings on the same day.

Tavares gets testy whenever someone suggests Renault is investing more in France than Stellantis — even if that person is French Finance Minister Bruno Le Maire.

“Let me put the church back at the center of the village,” Tavares told reporters at the last Paris Motor Show. “We have a turnover four times greater than that of Renault, and profitability 12 times greater. I respect them, but we’re not in the same league.”

–With assistance from Daniele Lepido and Dinesh Nair.

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