DETROIT (Reuters) -Stellantis NV Chief Executive Carlos Tavares said the automaker is “looking for a solution” for an Illinois assembly plant scheduled to stop producing Jeep SUVs on Tuesday, but the high costs of producing electric vehicles there may make it hard to keep the plant open.
“We need to find a solution for the fact that the technology that has been decided is 40% more expensive” than combustion vehicles, Tavares told reporters during a videoconference. That means changes in the automaker’s production footprint, he said.
The United Auto Workers union, which represents 2,300 workers at the plant, said Tuesday the decision to halt production at the factory with no future product in sight “will not stand.”
The UAW and the Detroit Three automakers, including Stellantis North America, will negotiate new master labor agreements this fall. A strike by UAW workers could disrupt production of trucks and SUVs that generate the bulk of Stellantis’ global profits.
Tavares warned again Tuesday that the shift to electric vehicles pushed by regulators in the United States and Europe could shrink the auto industry.
As Stellantis shifts its product mix toward electric vehicles, “the way to do business in the U.S. is going to change,” Tavares said.
Replacing the 15-year-old vehicles on the road with equivalent modern vehicles could cut emissions by an average of 50%, Tavares said. “You get a more affordable proposition than the BEV,” he said, referring to battery electric vehicles.
On a separate issue, Tavares said Stellantis has secured raw materials it needs for electric vehicles through 2027, and could make additional investments in mining companies to lock in supplies.
Tavares said battery technology “has not stabilized.” Raw materials needed for today’s batteries could change as battery technology changes, he said.
(Reporting By Joe White; Editing by David Gregorio)
