Stellantis CEO Carlos Tavares is sounding the alarm over the escalating tensions in the electric vehicle (EV) market, particularly between Western nations and China. In an interview with Reuters, Tavares voiced concerns about the potential repercussions of imposing tariffs on Chinese EV imports, warning of dire consequences for jobs and production within the industry.

The looming battle in the European market between Stellantis and its Chinese competitors is becoming increasingly intense, exacerbated by the growing trade disputes between Beijing, Brussels, and Washington. With the EU set to make a decision on whether to impose tariffs on Chinese carmakers, tensions are reaching a critical point.

Tavares minced no words in labeling these tariffs as “a major trap,” asserting that they would not only fail to protect Western automakers but also force them into restructuring to compete with lower-cost Chinese manufacturers. He emphasized the social and economic ramifications, highlighting the potential for job losses and production disruptions.

Moreover, Tavares cautioned against the inflationary impact of tariffs, suggesting that they could dampen sales and production in the affected regions. He painted a grim picture of the challenges ahead, acknowledging the tough price battle with Asian rivals and the need for adaptation within the industry.

The CEO’s remarks underscored the complexity of the situation, particularly against the backdrop of Italy’s push for increased production within its borders. Tavares stressed the looming overcapacity in the European auto sector, fueled by the rapid expansion of Chinese automakers in the region.

Despite these challenges, Tavares expressed optimism about ongoing discussions with labor unions and the potential for collaboration with Chinese partners. Stellantis’ joint venture with Leapmotor, aimed at selling and producing EVs outside China, represents a strategic move to expand its global offerings and participate more actively in the evolving automotive landscape.

Source: Reuters