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

Home > Industry Analysis > Content

【Summary】Stellantis CEO Carlos Tavares aims to build a $25,000 EV in the US to cater to the middle class and protect the company's manufacturing presence. However, negotiations with the UAW union are not going well, as the union demands higher wages and benefits. UAW President Shawn Fain criticized Stellantis' approach and stated that the company's business model needs fixing before achieving the target price. Currently, there are no $25,000 EV options available in the US market.

FutureCar Staff Aug 16, 2023 9:53 AM PT

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

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

However, Tavares also expressed concerns that if automakers are unable to absorb the additional production costs of EVs, the middle class may be priced out of the market. He believes that finding a way to build affordable EVs that are also profitable for the company should be a priority during negotiations with the United Auto Workers (UAW) union.

Tavares acknowledged that reaching the $25,000 target will require significant effort, and discussions with the UAW will be necessary to ensure the sustainability and profitability of affordable EVs for the middle class.

Unfortunately, the company's goal of reducing fixed costs to make affordable EVs is not aligned with the UAW's demands for higher wages and benefits. Contract negotiations between Stellantis and the UAW are currently not going well.

UAW President Shawn Fain criticized Stellantis for taking a "low-road approach" and accused the company of causing plant closures and damaging communities. Fain believes that Stellantis' business model needs fixing before they can achieve the $25,000 target.

In a recent livestream, Fain expressed his frustration by throwing Stellantis' proposals into a trash can, stating that the company disrespected UAW members with their demands for stricter attendance rules and reduced healthcare coverage.

The current contracts between the UAW and Stellantis, General Motors, and Ford Motor Company will 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.

In Europe, Stellantis plans to launch two affordable EVs priced around 25,000 euros (approximately $27,300). The Citroën e-C3 will be available in early 2024, followed by a Fiat Panda-inspired model in July 2024.