The head of Stellantis has warned that carmakers will struggle to get hold of enough batteries in the next three to four years as they race to roll out electric vehicles, leaving some manufacturers by the wayside as supply bottlenecks pile up.
Carlos Tavares told the Financial Times’ Future of the Car conference on Tuesday that car manufacturers may not be able to build their own battery plants fast enough to avoid shortages in the medium term.
“We will have around 2025 or 2026 a short supply of batteries,” he said. “And if there is no short supply of batteries then there will be a significant dependence of the western world vis-à-vis Asia.”
The battery shortages would add to other problems such as growing concerns over how and where raw materials were extracted, he added.
Tavares said the battery supply challenges would feed into the bigger problem of keeping cars affordable in the switch to electric models, which would be an issue for manufacturers’ margins in a “Darwinian period for the industry”.
“Those not able to transform will be in trouble,” he said.
Volkswagen boss Herbert Diess said at the Future of the Car summit on Monday that his company was unlikely to be able to go faster in pushing out electric cars because of supply constraints on batteries and the slow roll out of charging stations.
The German group plans to derive 50 to 60 per cent of car sales from electric models in 2030, from under a quarter now.
“Could it happen faster? We could accelerate a bit more maybe but not a lot,” said Diess, who also called for a negotiated settlement in Ukraine during the summit.
Stellantis, formed last year through the merger of Fiat Chrysler and Peugeot maker PSA, and other European manufacturers have been investing in battery production ventures in the region, but many are not fully up and running unlike those in markets such as South Korea.
The carmaker has ambitious plans to become one of the leading producers of battery powered vehicles as it hopes to challenge Tesla and Elon Musk.
Tavares wants Stellantis to sell 5mn battery powered vehicles by 2030, up from just under 400,000 last year, and is aiming for an all-electric approach in Europe by then.
The sourcing of raw materials, including those needed to make lighter frames for cars weighed down by batteries, would create problems down the line too, said Tavares.
“Everyone is going to pour EV vehicles on the market,” he said. “Where is the charging infrastructure? Where are the geopolitical risks of sourcing those raw materials? Who is looking at the full picture of this transformation?”
Renault chief executive Luca de Meo also warned about the effect on jobs from new regulations on climate change and the electric shift at the FT’s car summit on Monday.
He said European regulations could cost up to 70,000 jobs in France as the rules, which impose stricter limits on carbon dioxide and nitrogen oxide emissions from petrol and diesel cars, vans, trucks and buses, could make vehicles more expensive and hit demand.