Stellantis' $25,000 EV Production Plans Face UAW Demands

Home > Industry Analysis > Content

【Summary】Stellantis' plan to build a $25,000 EV in the US is clashing with demands from the United Auto Workers (UAW) union. Stellantis CEO Carlos Tavares believes that affordable EVs are essential for the company's US manufacturing footprint, but the UAW is pushing for higher wages and benefits for workers. The likelihood of Stellantis building a $25,000 EV in the US seems small as contract negotiations with the UAW are not going well.

FutureCar Staff Aug 15, 2023 9:36 AM PT

Stellantis' $25,000 EV Production Plans Face UAW Demands

Stellantis CEO Carlos Tavares recently emphasized the importance of affordable electric vehicles, stating that the ideal price range is around $25,000. He believes that reaching this price point is crucial for protecting the company's US manufacturing presence in the long term.

Tavares also expressed concern that if automakers are unable to absorb the additional production costs associated with EVs, the middle class will be unable to afford them. Instead of passing these costs onto consumers, Tavares believes that finding a way to make affordable EVs profitable for the company should be the focus of discussions with the United Auto Workers (UAW) union during negotiations this year.

However, Stellantis' goal of reducing its fixed-cost structure to make EVs more affordable clashes with the UAW's demands for higher wages and benefits. This misalignment in priorities has made the likelihood of Stellantis building a $25,000 EV in the near future very slim.

UAW President Shawn Fain criticized Stellantis for taking a "low-road approach" to the electric vehicle transition, resulting in closed plants and negatively impacting communities. Fain believes that Stellantis' business model needs fixing before they can achieve their $25,000 target.

The contract negotiations between Stellantis and the UAW have been tense, with Fain publicly discarding Stellantis' proposals and accusing the carmaker of disrespecting UAW members. 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 most affordable option is the outgoing Chevrolet Bolt EV, priced at $27,495 including shipping.

Stellantis does have plans to launch two affordable EVs in Europe, priced 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.