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Stellantis CEO Carlos Tavares.
© Italy Photo Press/Imago
Stellantis CEO expects tough years of consolidation in the auto industry.
He sees one company in particular as being at risk.
Carlos Tavares of Stellantis NV is bracing for an era of consolidation in the auto industry, predicting the rush for more affordable electric cars will end in a “bloodbath.”
Above all, he has one company in mind that he sees as particularly at risk: Renault SA.
E-car offensive: Can Renault compete with Tesla and BYD?
However, the 65-year-old CEO is not taking any formal steps to counteract this at Renault.
The group is practically taboo because it is owned by the French state and is subject to its influence.
What Tavares has done, however, is stand up to his arch-rival at every turn and prepare his company to capitalize on any setback.
And Renault this week delivered exactly the kind of stumbling block Tavares was waiting for by abandoning multi-year efforts to launch an initial public offering for its electric car business.
In an exclusive interview, the Stellantis CEO questioned Renault's strategy and wondered whether the company will have the scale to compete with his company and leading electric car makers Tesla Inc. and BYD Co.
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“It’s my job to keep my eyes open.
It is my job to understand how the industry will survive this transition.
It is my job to ensure that my company will be among the winners,” Tavares said Wednesday.
“And if we are one of the winners, new opportunities naturally arise.”
In announcing the cancellation of the IPO of Ampere, its EV and software business, Renault reiterated that the company is capable of self-financing its future.
The company also said stronger cash generation played a role in the decision to cancel the IPO.
A Renault spokesman declined to comment on Tavares' comments.
Carmakers in a “race to the bottom”
The rivalry between Peugeot and Renault may go back 125 years, but Tavares has taken the competition to a new level.
He has publicly criticized Renault's spin-off of its EV business and bristled at suggestions that Stellantis was not investing as much in France.
He has even arranged media events - including company earnings - to take place before or at the same time as Renault's already scheduled briefings.
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Earlier this month, Tavares told reporters that automakers are in a "race to the bottom" in electric cars, cutting prices faster than they reduce costs.
“In this world that is completely Darwinian, the ones who are able to protect their numbers are the ones who are willing to do business,” he told reporters on Jan. 19.
“As long as you see that my numbers are at a reasonable level, you can assume that I am ready for any kind of consolidation.
Tavares' counterpart at Renault, CEO Luca de Meo, declared the company "back from hell" about a year and a half after the pandemic hit the already struggling manufacturer hard.
Renault survived with the help of a €5 billion loan backed by the French state.
After stabilizing Renault, de Meo, 56, split the company into five divisions, including the EV business Ampere and the internal combustion engine and hybrid vehicle business, which was named Horse.
Tavares said on Wednesday he had great respect for de Meo.
However, when asked whether Stellantis would pursue a similar strategy, Tavares answered with a resounding no.
“We are Stellantis,” he said at the company’s annual shareholder meeting in April.
“We run this company not with Old Co.-New Co., but with One Co.”
Renault withdraws from Allianz
The intense interest in Renault is a personal matter for Tavares.
He spent most of the first three decades of his career at the company and then left in dramatic fashion after openly competing for then-CEO Carlos Ghosn's job.
He was quickly hired to run Peugeot maker PSA Group, leading a turnaround and orchestrating its merger with Fiat Chrysler in 2021, creating Europe's second-largest automaker.
While Tavares has expanded brands - from Peugeot and Citroën, to taking over Opel and Vauxhall and merging with the owner of Jeep, Fiat and Alfa Romeo - Renault has withdrawn from its decades-long alliance with Nissan Motor Co.
The companies decided last year to dissolve a joint purchasing organization that was seen as one of the more successful elements of their otherwise strained relationship.
In December, Renault began selling its stake in Nissan.
During Wednesday's interview, Tavares said Renault is moving closer to Chinese partners, alluding to the joint venture agreement with China's Zhejiang Geely Holding Group Co. to create Horse.
China's Envision Group is also one of the main suppliers of Renault's EV batteries.
“We will see how the matter develops, including in the eyes of the French government,” Tavares said.
“I have no particular interest in this company, I just observe that they have a different strategy.”
Stellantis and Renault employ 80,000 people in France
While Tavares' dire assessment of Renault's ability to pull off an Ampere IPO proved predictable, putting that omniscience into action is another matter.
The two companies together employ around 80,000 full-time workers in France, and the state has used its stake in the companies and its presence on boards to secure jobs.
Government intervention is also the cause of Renault's recent history of failed businesses.
The 69-year-old Ghosn's persistent efforts to merge Renault and Nissan while balancing the state's interests culminated in his resignation at the end of 2018.
The following year, Fiat Chrysler briefly sought a merger with Renault, but then blamed political interference when it pulled out.
Another complicating factor: De Meo has been in talks with Volkswagen AG, Europe's largest automaker, and others about jointly developing more affordable electric cars.
“A partnership between Renault and Volkswagen could be the starting point for something that would make Renault dependent on Volkswagen,” Tavares said in the interview.
Renault vs. Stellantis: Dispute over big and small things
For now, Tavares is heating up the rivalry between France's top carmakers, both large and small.
Stellantis poached several top managers from Renault and placed some of them in senior positions, to the detriment of experienced managers from Peugeot and Citroën.
These include Florian Hüttl, who heads the Opel brand, Uwe Hochgeschurtz, who is responsible for expanded Europe, and Thierry Koskas, the CEO of Citroën.
The two companies have even argued over their event calendars.
Both Renault and Stellantis will report their annual results on February 15, a date Renault announced on its website at least four months in advance.
Stellantis told investors in January that it would report results the same day.
Tavares always gets irritated when someone claims that Renault is investing more in France than Stellantis - even if it is the French Finance Minister Bruno Le Maire.
“Let me put the church back at the center of the village,” Tavares said at the recent Paris Motor Show.
“We have four times the turnover of Renault and twelve times the profitability.
I respect them, but we’re not in the same league.”
By Albertina Torsoli.
With support from Daniele Lepido and Dinesh Nair.
For more articles like this, visit bloomberg.com
We are currently testing machine translations. This article was automatically translated from English into German.
This article was first published in English on January 31, 2024 at the “Washingtonpost.com” - as part of a cooperation, it is now also available in translation to readers of the IPPEN.MEDIA portals.