Stellantis' $25,000 EV Production in US Faces UAW Demands

Home > Industry Analysis > Content

【Summary】Stellantis aims to build a $25,000 electric vehicle (EV) in the US to cater to the middle class, but clashes with the demands of the United Auto Workers (UAW) union. CEO Carlos Tavares emphasizes the importance of affordable and profitable EVs, while the UAW argues that workers should not have to sacrifice for this goal. Contract negotiations are not going well, and the UAW president accuses Stellantis of taking a low-road approach.

FutureCar Staff Aug 14, 2023 11:21 PM PT

Stellantis' $25,000 EV Production in US Faces UAW Demands

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

Tavares highlighted the importance of building affordable EVs that are also profitable for the company. He stated that this should be a key topic of discussion with the United Auto Workers (UAW) union during negotiations this year. Tavares acknowledged the need for hard work and collaboration with union partners to make sustainable and affordable EVs that cater to the middle class.

However, Stellantis' goal of reducing its fixed-cost structure to achieve more affordable EVs clashes with the UAW's demands for higher wages and benefits. The contract negotiations between Stellantis and the UAW are currently not progressing well. UAW President Shawn Fain criticized Stellantis, accusing them of taking a low-road approach that has resulted in closed plants and harmed communities. Fain stated that until Stellantis fixes its broken business model, they will not be able to achieve the $25,000 target for EVs.

In a livestream, Fain symbolically threw a copy of Stellantis' proposals into a trash can, expressing his dissatisfaction with the carmaker's demands for 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 market. The cheapest option is the outgoing Chevrolet Bolt EV, priced at $27,495 including shipping. Stellantis, however, has plans to introduce two affordable EVs in Europe with a price tag of around 25,000 euros (approximately $27,300). The Citroën e-C3 will be launched in early 2024, followed by a Fiat Panda-inspired model in July 2024.