Will our heroes make it through the era of the transition from the combustion engine to the electric one? Or, as with the dinosaurs, do the Big Cars risk extinction to the advantage of new, lighter and more flexible competitors? Sure, it's just a provocation, but based on some elements. Starting with the success of companies that didn't even exist at the dawn of the XNUMXs.
In the wake of Tesla, protagonist of the first revolution, the freshman Rivian runs on Wall Street despite the divorce from Ford and the problems of Covid: Thursday 2 December is worth just under one hundred billion dollars. Meanwhile Liu Bin, founder and CEO of Nio, the most aggressive of the Chinese "electric" bikes listed on Wall Street (capitalization of 60 billion dollars, or a fifth of Toyota, the most popular traditional firm) announced Wednesday that next year it intends to land cars on five European markets. It was to convince him the Norway test, so far the only covered market in the Old Continent: one out of four possible customers of the Chinese car decided after the test to buy a Nio. Better than the results we get at home, said the tycoon enthusiastically, confirming that a new factory in Hefei to support sales growth: 25.500 units in the fourth quarter, an increase of 120% on the third.
Certain numbers shouldn't scare traditional groups, engaged in a spasmodic hunt for old and new alliances, to strengthen the supply chains of their production centers, afflicted by a shortage of chips, but also structurally weak and dependent on raw materials running out or controlled by Chinese competitors. For these reasons, but not only, the most representative Big names in the automotive world are starting to make their voices heard. First among all Carlos Tavares, number one of Stellantis which took the opportunity of the Reuters conference to launch an unprecedented warning: "The pressure from governments and institutions (such as the EU) on car groups can put employment at risk and compromise growth due to the higher costs required by the new environmental rules - he said - is to impose on the industry of the car an electrification which involves 50% of additional costs compared to a conventional vehicle”. And again: "There is no way for us to be able to transfer this 50% of additional costs to end customers, because the latter, mostly middle class, would not be able to bear it".
Hence the risk of reducing volumes or accepting cuts in profits that are unsustainable in the long run. Barring a strong growth in plant productivity. “In the next five years we have to digest an increase in productivity of 10% per year (…) in a sector where people normally travel between 2 and 3%” says Tavares.” Adding that “The future will tell who will be able to stomach all of this and who will fail: we are taking the industry to its limits".
It seems to listen to a revived Sergio Marchionne, at the time a skeptic of the electric revolution. The difference lies in the fact that Stellantis is fully participating in the change today, after announcing 30 billion investments by 2025 in the summer to achieve several objectives: new electrical architectures, plants for the construction of batteries and to secure raw materials and technologies.
And there were some successes, one really sensational. In October, for the first time in history, Stellantis has sold more than Volkswagen: 21% of the market against 20,7% of the German rival paralyzed by the shortage of chips. But, look at the November brake, there is little to cheer about: in Italy the data speaks of a dramatic -24,5% of sales, among other things in the absence of those measures that have cushioned the landslide on other markets. But in France, the November figure (-3% compared to 2019) shows that, in the absence of interventions on infrastructure, the road is in difficulty. A little bit for everyone.
This is confirmed by Thomas Schmall, the Volkswagen manager responsible for technology to whom the group has entrusted the mission of procuring the raw materials necessary for the transition as well as the start of the production of solid batteries, the most efficient in the future. A 30 billion project of Euro. The number "30" has a magical flavor in the struggle to survive: if we don't move in time, said CEO Herbert Diess, we risk 30 fewer jobs.
In short, it's time to prove that the European car is not made of dinosaurs: expect a long series of agreements on technologies and materials. Perhaps they will be enough.
