- Carlos Tavares says tariffs will discourage Western carmakers from restructuring to better rival Chinese competitors.
- The boss of the European giant says Chinese OEMs have a 30% cost edge over Western rivals.
- Chinese carmakers could soon hold a 10% share of new car sales in Europe.
Stellantis chief executive Carlos Tavares has described tariffs against Chinese electric vehicles as a “major trap” and says the European car industry is in a “Darwinian period.”
Hot on the heels of the U.S. announcing new 100% tariffs on EVs imported from China and the EU on the verge of reaching a decision on whether it will follow suit, Tavares said that tariffs will not encourage Western carmakers to restructure in order to meet the challenges posed by Chinese manufacturers.
Read: We Don’t Need U.S. Govt Protection From Chinese Automakers, Says Stellantis Boss
“[Tariffs are] a major trap for the countries that go on that path,” he said. “When you fight against the competition to absorb 30% of cost competitiveness edge in favor of the Chinese, there are social consequences. But the governments, the governments of Europe, they don’t want to face that reality right now.”
Tavares told Reuters that new tariffs will fuel inflation in the regions where they’re imposed and acknowledged that fighting Chinese competitors won’t be easy. According to him, Chinese OEMs have a 30% cost edge over Western rivals.
“We are not talking about a Darwinian period, we are in it,” he said. “This is not going to be easy for the dealers. It’s not going to be easy for the suppliers. It’s not going to be easy for the OEMs. As we know in Europe, everybody is talking about change as long as change is for somebody else.”
The boss of Stellantis said that Chinese rivals are on track to sell 1.5 million vehicles in Europe, securing a 10% share of the local market.
“If we let the share of the Chinese OEMs grow… then it’s obvious that you are going to create an overcapacity, unless you fight against that competition,” he said.
Tavares has been outspoken in his opposition to tariffs being levied against Chinese EVs. In February, he said regardless of what the Western world decides to do in terms of tariffs, Stellantis will still have to face Chinese competitors in other important markets, including Latin America, Asia, Africa, and the Middle East.
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