High Electrification Costs Are "Elephant In The Room": Stellantis

Stellantis is getting ready to electrify its lineup but warns that doing so will cost a lot of money, with one possible effect being that EVs will become too expensive for the middle classes.

While the automaker sees the electric Ram 1500 REV pickup as its future, it says that bringing it to market in late 2024 will be costly.

Company executives at the New York International Auto Show underlined the need to boost profitability and cut costs in order to fund the shift to EVs. Speaking with Automotive News, Ram CEO Mike Koval Jr. said the 1500 REV is "what we're here to celebrate and talk about, but it's expensive."

"That's the elephant in the room for everybody. The cost of electrification is expensive, so for sure we need to make sure that we protect the profitability of our current in-market [internal combustion engine] business to help fund the transition to electrification."

He added that protecting those profits has been a challenge amid recent development like the pandemic, microchip shortage, inflation, and regulatory changes. For example, Stellantis cited costs related to developing and building EVs among the reasons the company idled its Jeep Cherokee plant in Illinois at the end of February.

Stellantis CEO Carlos Tavares said at a media roundtable last week that the question is how the company tackles those additional costs.

"If we don't do it, we are just going to have a significant reduction of the size of the market because [the] middle class will not be able to buy EVs, very simply put. So it is not in the interest of the corporations. It's not in the interest of the citizens. It's not in the interest of the unions that we shrink the market because we become too pricey for the middle classes."
Stellantis plans to launch more than 25 EVs in the US by 2030 from its Ram, Jeep, Dodge and Chrysler brands. Ram plans to debut an electric version of its ProMaster van this year, followed by the 1500 REV in 2024. The truck brand is also considering an electric midsize pickup that was shown in concept form to dealers in March.

Jeep plans to debut the production versions of the Recon and Wagoneer S electric SUV concepts in 2024; the brand already has an all-electric model on sale in Europe, the Avenger, which has not been confirmed for the US market. 

Dodge will launch its first all-electric muscle car in 2024, and it's expected to be heavily influenced by the Charger SRT Daytona Concept unveiled last year. As for Chrysler, it will step into the EV era in 2025 with a model inspired by the Airflow Concept.