The electric car, mirror to the larks?  - Economic policy

The electric car, mirror to the larks? – Economic policy

The shock interview of this beginning of the year, in any case the one that interested me the most, is that of Carlos Tavares, the boss of the automobile group Stellantis.

Stellantis is the name of the group that oversees the Peugeot-Citroën brands on one side and Fiat and Chrysler on the other. In total, Carlos Tavares manages 14 car brands and rather brilliantly. In principle, when he speaks on the automotive sector, the experts listen to him, because he knows what he is talking about. In his last interview granted to 4 European media, he speaks without language.

The first thing he says is that the choice to stop the sale of heat engines in Europe from 2035 is a political choice, not an industrial one. According to him, it is a mistake to put such pressure on the automotive industry, which remains the largest employer in Europe. There were other cheaper and faster solutions to reduce the carbon impact of the automotive sector, he thinks in particular of the hybrid car.

His second attack concerns the price of electric cars: he recalls that the cost of electric technologies is 50% more expensive than that of thermal cars and he specifies that to amortize this cost, the automotive sector will have to make productivity gains of 10% per year while this sector records on average productivity gains of only 2 to 3% per year. So, for Carlos Tavares, it’s simple, the middle class may not be able to afford a 30,000 euro electric car. Implicitly, when he says that productivity gains will have to increase from 3% per year to 10% per year, understand that the automotive industry will automate its manufacturing processes even more. There will therefore be social damage to the key.

Carlos Tavares adds that the State will still be asked to subsidize these electric cars, which will further increase the State deficit and therefore the public debt.

Finally, Carlos Taveres explains thatan electric car must drive at least 70,000 kilometers to offset the carbon footprint related to the manufacture of its battery. In short, as you have understood, it is a frontal attack against European energy policy.

Is he exaggerating? The most optimistic will say yes, because when horse-drawn carriages gave way to thermal cars, the jobs of coachman and groom disappeared and it was only the rich of the time who could buy a thermal car. But with technical progress, the car was made available to everyone after a few decades. But the mentality of today is no longer the same. Can we seriously imagine that a large part of the population will have to wait 10 or 15 years before buying a suitable electric car? Who will pay for this transition and absorb the social cost of job losses in the sector?

Basically, the question posed by the boss of Stellantis today is very clear: isn’t the electric car the mirror of the larks of the energy transition?

Stellantis is the name of the group that oversees the Peugeot-Citroën brands on one side and Fiat and Chrysler on the other. In total, Carlos Tavares manages 14 car brands and rather brilliantly. In principle, when he speaks on the automotive sector, the experts listen to him, because he knows what he is talking about. In his last interview granted to 4 European media, he speaks without language. The first thing he says is that the choice to stop the sale of heat engines in Europe from 2035 is a political choice and not an industrial one. According to him, it is a mistake to put such pressure on the automotive industry, which remains the largest employer in Europe. There were other cheaper and faster solutions to reduce the carbon impact of the automotive sector, he thinks in particular of the hybrid car. His second attack concerns the price of electric cars: he recalls that the cost of electric technologies is 50% more expensive than that of thermal cars and he specifies that to amortize this cost, the automotive sector will have to make productivity gains of 10% per year while this sector records on average productivity gains of only 2 to 3% per year. So, for Carlos Tavares, it’s simple, the middle class may not be able to afford a 30,000 euro electric car. Implicitly, when he says that productivity gains will have to increase from 3% per year to 10% per year, understand that the automotive industry will automate its manufacturing processes even more. There will therefore be social damage at stake. Carlos Tavares adds that the State will still be asked to subsidize these electric cars, which will further increase the State deficit and therefore the public debt. Finally, Carlos Taveres explains that an electric car must travel at least 70,000 kilometers to offset the carbon footprint linked to the manufacture of its battery. In short, as you have understood, it is a frontal attack against European energy policy. Is he exaggerating? The most optimistic will say yes, because when horse-drawn carriages gave way to thermal cars, the jobs of coachman and groom disappeared and it was only the rich of the time who could buy a thermal car. But with technical progress, the car was made available to everyone after a few decades. But the mentality of today is no longer the same. Can we seriously imagine that a large part of the population will have to wait 10 or 15 years before buying a suitable electric car? Who will pay for this transition and absorb the social cost of job losses in the sector? Basically, the question posed by the boss of Stellantis today is very clear: isn’t the electric car the mirror of the larks of the energy transition?

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