Since the beginning of the year, after an impressive price increase in 2022, Tesla prices have fallen sharply, until returning to all-time lows.

It must be said that at the end of last year, Tesla was struggling to sell its cars, and the inventory also started to accumulate. A few months later, mission accomplished, the Model Y returned to the top of sales other manufacturers had to urgently adapt their prices to stay in the race. So Xpeng, Seres, Ford, Toyota or even Lucid have reduced the prices of their cars in different markets.

Prioritize profit over volume

This “price war” regarding the electric car, not everyone wants to participate in it. This is the case of Stellantis, who announced through his boss Carlos Tavares not wanting to follow Tesla’s example.

The reason is simple: it is important for the group, it’s profits. An aspect that seems to have taken a backseat to Elon Musk, so much so that in the first quarter, the American company’s net profit fell by almost a quarter compared to the same period last year.

In a period when manufacturers are selling less, they are primarily selling more, and we were also able to see this in the results released for 2022, when most brands, especially premium ones, did not break the sales record, but never made so much money .

Bound by the power of things?

Therefore, Stellantis does not want to reduce its profits, even if it means selling fewer cars. The Gifts Forward strategy, unveiled a year ago, calls for a doubling of net revenue by 2030 (compared to 2021) with double-digit adjusted operating margin over the decade.

However, due to circumstances, Stellantis may also be forced to lower pricesand Carlos Tavares knows it well: “If the entire EV market lowers prices, Stellantis may consider adapting by reducing its costs”.

An idea the group already has in mind, as during the Dare Forward Plan presentation, Stellantis indicated that it aims to reduce the cost of its EVs by 40%. This goal will be achieved by reducing average production costs (-40%), distribution costs (-40%), and by rationalizing research and development investments for a total savings of 30%.

A long-term plan that could accelerate if other manufacturers continue to follow Tesla’s policy.