Mondial de l’auto: the real start for the electric car

Anti-electric car, Carlos Tavares? No way. Electrification is “a political choice, we abide by the decisions”, affirms not without cynicism the General Manager of Stellantis. However, three years ago the then president of the PSA fulminated against “amateurism”

Brussels decisions that risk leading the “industry into a dead end”! Symbol of this 180 degree turn: Carlos Tavares slammed the door of the Association of European Manufacturers (Acea) in June. When the 27 states of the European Union decided to ban the sale of new cars with petrol and diesel engines by 2035, he felt that lobbying was no longer useful. “Those who want to haggle can do that, but that doesn’t interest us”, hammers the boiling leader. The time for recriminations is over, place for execution without qualms. As a result, its Dare Forward 2030 plan allows this horizon to sell electric vehicles only on the old continent.

Born in 2021 from the merger of PSA and Fiat Chrysler Automobiles, Stellantis promises at the beginning of the next decade 75 so-called zero-emission models for 5 million in annual sales (136,000 in the first half of 2022). Furthermore, “from 2024, electricity will represent 50%” of the total production of engines at the Trémery mechanical plant (Moselle), “against 15% last year”, specifies Arnaud Deboeuf, director of manufacturing at Stellantis.

Carlos Tavares’ flip-flop illustrates the switch to electricity taken by all manufacturers. Renault also plans to go 100% electric in eight years in Europe. And Luciano Biondo, director of the new northern industrial center ElectriCity of Renault, aims “by 2025 a production of 400,000 cars” non-thermal in Douai and Maubeuge. With the small R5 expected in 2024 at an alleged base price of 26,000-27,000 euros, so an R4 SUV derivative in the middle of the decade. Renault will also exhibit a concept of this R4 at the Paris Motor Show, which will be held from October 17 to 23 in Paris. This will be one of the attractions. Better: The manufacturer intends to announce in November the consolidation of all its zero-emission activities in the future in a specific unit of 10,000 people, based in France. This should even be the subject of a “separate quote, this is what we are studying”, emphasized in the spring the general manager, Luca de Meo (see also interview page 74) . Last weekend, the Alliance even specified that Nissan could enter the future electric pole. In return, Renault would reduce its ownership stake in the Japanese from 43% to 15%. An operation that would make it possible to finance the enormous expenses involved. In January, Renault and its allies Nissan and Mitsubishi directly announced a joint investment of 23 billion euros in electrification over the next five years, following the 10 billion that had already been paid out by the covenant. Stellantis expects more than 30 billion (including software) between 2021 and 2025!

Batteries, sinews of war

The French Automotive Platform (PFA), which brings together the heads of manufacturers and equipment manufacturers, estimates the necessary expenditure to support the energy transition at a total of 9 billion euros in France within five years, of which 6.5 billion to produce batteries. Because the sinews of war are precisely the battery factories. The new European manufacturer ACC (Automotive Cells Company), owned equally by TotalEnergies, Stellantis and Mercedes, will mobilize more than 7 billion in Europe (see page 81). With “just under 1.3 billion euros in public support”, acknowledges the Director General, Yann Vincent. If manufacturers and battery manufacturers are mobilizing thoroughly, so are equipment manufacturers. Indeed, in a decade, Valeo claims to have invested more than 10 billion euros in technologies to reduce CO2 emissions. Consequently, “electrification will generate 15 billion euros in revenue from 2025”, estimates its CEO, Christophe Périllat. This is almost equivalent to its current annual business volume. It is true that sales of new electric cars are gaining momentum. They already account for more than 12% of total registrations in France (during the first eight months of 2022), compared to just under 1% four years ago. The strategy consultancy Bipe estimates that they may represent “up to 50% in 2030”. The death of the thermal vehicle “will happen sooner than expected, around the 2030s”, predicts Yann Vincent. Logic: most European manufacturers will no longer see the point of spending money on diesel and gasoline engines that are doomed to be banned by Brussels a few years later.

Generate 10% productivity

So does electrification represent a new chance for a car industry whose output has collapsed by two-thirds since its peak in 2004, to 1.35 million vehicles in France last year, with a record trade deficit in the sector of €18 billion? Indeed, electrification can “potentially lead to the creation of 11,000 jobs”, predicts Alexandre Marian from the firm Alix Partners. The needs are already enormous. Battery, electric motor, data and software technicians and onboard engineers are in high demand. But electrification also risks… “eliminating 52,000 other jobs by 2030 in France”, tempers Alexandre Marian. This is a net decrease of more than 40,000 jobs. That is, “almost 15% of the workforce”, responds Claude Cham, president (honorary) of the Federation of Equipment Manufacturers Fiev. The main victims will be blacksmiths, foundries and mechanical activities. Across Europe, 225,000 jobs could be created by electrification, according to the PwC firm. But 500,000 would be destroyed! Why this erosion? Electrification “adds 50% of the cost to a conventional vehicle,” Carlos Tavares warned at the Reuters Next summit in late 2021. Since it is “impossible for us to pass [ces] costs on the end consumer”, there is no other solution than to achieve “10% productivity per year in an industry that is used to generating 2 to 3%”, explained Stellantis’ general manager.

Who says productivity says decline in employment. But France is likely to suffer more in future industrial arbitrations than other countries that manufacture vehicles in Europe. Because the tricolor industry suffers from high additional production costs, “at 300 euros per car compared to Spain, 600 compared to the countries of Central Europe”, estimates Luc Chatel, president of the PFA. Other bad news for employment: Almost all high-value-added electronic components whose electrified models are voracious are … imported (see page 78). However, an electric car “includes 60% more (in value) than a thermal model”, calculates Alix Partners. Finally, an electric car requires less labor than a gasoline or diesel model because it is much easier to assemble. Former Volkswagen president Herbert Diess estimated that it was 25% less complexity!

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