Stellantis' $25,000 EV Clash with UAW Demands

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【Summary】Stellantis plans to build a $25,000 EV in the US, but clashes with UAW demands. CEO Carlos Tavares believes reaching this price point is crucial for the company's US manufacturing future, but the UAW is demanding higher wages and benefits. UAW President Shawn Fain says Stellantis' business model is broken and they won't hit the target until they fix it. Stellantis plans to launch affordable EVs in Europe but doesn't have a $25,000 option in the US yet.

FutureCar Staff Aug 16, 2023 11:54 PM PT

Stellantis' $25,000 EV Clash with UAW Demands

Stellantis CEO Carlos Tavares recently emphasized the importance of affordable electric vehicles (EVs) priced at around $25,000. He believes that achieving this price point is crucial for maintaining the company's US manufacturing presence in the long term. Tavares also expressed concern that if automakers cannot absorb the additional production costs of EVs, the middle class will be unable to afford them.

Tavares stressed the need for discussions with the United Auto Workers (UAW) union on how to build affordable, profitable EVs in the US that are accessible to the middle class. He acknowledged that reaching this goal will require significant effort and collaboration. However, Stellantis' objective of reducing fixed costs to make EVs more affordable clashes with the UAW's demands for higher wages and benefits.

Unfortunately, the likelihood of Stellantis producing a $25,000 EV in the near future seems slim due to ongoing contract negotiations with the UAW. UAW President Shawn Fain criticized Stellantis for taking a low-road approach, resulting in plant closures and negative impacts on communities. Fain believes that Stellantis' business model needs fixing before the company can achieve its target price point.

Fain's frustration with Stellantis was evident during a livestream, where he symbolically discarded the carmaker's proposals into a trash can. He accused Stellantis of disrespecting UAW members by seeking stricter attendance rules, reduced healthcare coverage, and other concessions. The current four-year contracts between the UAW and Stellantis, General Motors, and Ford Motor Company are set to expire on September 14.

Currently, there are no $25,000 EV options available in the US. The most affordable option is the outgoing Chevrolet Bolt EV, priced at $27,495, including shipping. However, Stellantis does have plans to launch two affordable EVs in Europe, with a price tag of around 25,000 euros (approximately $27,300). The Citroën e-C3 is expected to debut in early 2024, followed by a Fiat Panda-inspired model in July 2024.