Stellantis CEO Leaves CNBC Host SPEECHLESS (Jeff Lutz on their DEAD END Strategy)
Stellantis CEO Leaves CNBC Host Speechless as they Discuss their Design-to-Cost Strategy for Electric Vehicles and Challenges in Transitioning to the EV Market
Questions to inspire discussion:
❓ What did CEO Carlos Tavarez confirm is the biggest issue facing electric vehicle sales?
Carlos Tavarez confirmed that affordability is the biggest issue facing electric vehicle sales.
🤨 How many new battery electric vehicles is Stellantis planning to introduce in the US this year?
Stellantis is planning to introduce eight new battery electric vehicles in the US this year.
❓ What is the focus of 'designed to cost' methodology as explained by Jeff lus?
The focus of 'designed to cost' methodology, as explained by Jeff Ius, is on all the different subsystems in the case of a vehicle and figuring out the budget-based unit economics.
🤨 What mistake does Jeff lus believe GM and Ford may have made in relation to design to cost methodology?
Jeff Lus believes that GM and Ford may have tripped up by not employing purpose-built design to fit the economics for where the vehicle will be in the future and where the industry will be.
🤨 What is the concern about the complexity of different brands converting to battery electric vehicles?
The concern about the complexity of different brands converting to battery electric vehicles is that it may crush them from a cost perspective due to the challenges in managing the variety of models and the supply base.
❓ What advice would the speaker give to the brands regarding their manufacturing process?
The speaker would advise the brands to take their manufacturing process model down and focus on implementing a more late-stage postponement strategy for their vehicles. This would allow for making changes very late in the process, giving customers different options and features without burdening the early manufacturing stages and supply base.
Key Highlights:
Stellantis CEO emphasizes focus on affordability through design-to-cost strategy for electric vehicles.
Focus on designing products based on unit economics and cost analysis for profitability.
Stellantis CEO discusses challenges in transitioning to electric vehicles and the need to align design with future industry trends.
Challenges with transitioning to electric vehicles and managing complexity in manufacturing and supply chain.
Clips:
00:00💡 Stellantis CEO emphasizes affordability and design-to-cost strategy for electric vehicles.
Affordability is the biggest issue in electric vehicle sales.
Stellantis plans to introduce 500 Mile batteries and eight new electric vehicles in the US.
Carlos Tavares predicts five major global car companies in 10 years, with Stellantis being one of them.
Design-to-cost approach involves budget-based economics for every vehicle subsection.
Raw materials availability and battery power density are crucial for cost reduction.
03:24💡 Challenges faced by automakers in implementing design to cost methodology for vehicle production.
Design to cost methodology involves budget-based unit economics for vehicle production.
Advanced unit economics encompass all costs from raw materials to final components.
Issues with EV and raw material volatility impact long-term planning and design decisions.
Forcing multiple vehicle models into production can lead to complexity and cost inefficiencies.
Switching between different models affects manufacturing efficiency and bottom line costs.
Stellantis may need to reduce model complexity and focus on transcending price tiers.
Implementing purpose-built design to align with future industry trends is crucial for success.
07:20⚡ Discussion on Stellantis' transition to battery electric vehicles and challenges with charging infrastructure.
Stellantis plans to introduce 8 new electric cars in the US this year.
Concerns raised about charging anxiety and infrastructure readiness.
Stellantis transitioning half of its portfolio to battery electric models globally.
Tesla's focus on bringing charging network to customers' convenience.
Complexity of the transition may pose cost and supply base challenges for Stellantis.
Advice to address complexity issues if advising Stellantis.
10:41💡 Discussion on Stellantis's manufacturing strategy, R&D efficiency, and future consolidation in the automotive industry.
Stellantis is facing challenges with managing 48 vehicle models and late-stage postponement.
Comparison of Stellantis's 48 models to Tesla's five models highlights capital and R&D efficiency differences.
Prediction of future automotive industry consolidation to around five major car makers in 10 years.
Speculation on the survival of automakers like Toyota, Honda, GM, Ford, Volkswagen, and BYD in the industry.
14:07 🚗 Discussion on automotive industry consolidation and challenges in transitioning to EV market.
Stellantis CEO predicts industry consolidation to five major players.
Transition to EV market poses challenges for traditional automakers.
Importance of streamlining model count and focusing on sustainable products.
Concerns raised about complexity in inventory and demand planning.
Discussion on lack of clarity from Stellantis on transition strategy.
Potential for Tesla and Chinese automakers to dominate EV market.
