Stellantis, one of Europe's largest automakers, has warned that unless electric vehicles become cheaper, the auto industry will become volatile after the European Union reached a landmark agreement to phase out internal combustion engine vehicles,media reported.

Image credit: Stellantis

On June 30, Stellantis chief manufacturing officer Arnaud Deboeuf said the company aims to reduce the cost of manufacturing electric vehicles by 40 percent by 2030. Stellantis plans to manufacture some of its components itself and pressure suppliers to lower prices. Deboeuf said at Stellantis’s plant in Tremery, France, that “the market will crash” if electric car prices don’t drop.

Stellantis plans to launch more than 75 pure electric models within 10 years and to convert at least some French car factories to electric vehicles. While the company has invested heavily in launching pure electric vehicles, Stellantis promises to maintain strong returns on software and services, as well as additional revenue from some premium vehicles.

Electric vehicle prices are rising at a dizzying rate recently. Tesla raised the price of each vehicle by $6,000 this month, and Rivian Automotive Inc. and Ford Motor Co. also raised vehicle prices earlier this year. Ford Chief Financial Officer John Lawler told an investor conference earlier this month that rising raw material costs have made some battery-powered models unprofitable.

Most automakers may have to switch to electric vehicles over the next 10+ years as EU lawmakers support a move away from fossil fuels in the auto industry.

Stellantis Chief Executive Carlos Tavares said on June 30 that while the company will abide by the decision, policymakers appear "not concerned" with whether automakers have enough raw materials to support the shift.

According to Tang Weishi, between 2024 and 2027, the demand for electric vehicle batteries will increase sharply. Stellantis is developing five large battery factories in North America and Europe to produce 400 gigawatt-hours of batteries by 2030. He also said the company did not rule out buying mines to secure the supply of raw materials.

This article is reproduced from Gasgoo