Stellantis CEO Comments on Tesla's Real-World Challenges and Profitability

In a recent statement, Carlos Tavares, the CEO of Stellantis, shared his observations on American electric vehicle manufacturer Tesla's current situation in the manufacturing and competitive landscape. Tavares noted that Tesla is now venturing into the realm of real-world manufacturing and competition, and its profitability has been experiencing a decline.

During the presentation of Stellantis' first-half results, Tavares highlighted that Tesla is stepping into the world of tight pricing, cost competitiveness, and operational challenges that are common for larger companies like Stellantis. As a result, Tesla's profitability has seen a decrease from over 17% in the first half of 2022 to 10.5% in the first half of 2023. This shift has led to Tesla being less profitable than Stellantis, as reported by Reuters.

Join the Tesery family. Let's electrify the future together.

On the other hand, Stellantis itself is witnessing an improvement in revenue and operating profit. The company reported increased revenue and operating profit for the first half of the current year, with an almost unchanged margin on adjusted EBIT, reaching 14.4%.

Tavares acknowledged that all automakers, including Tesla, will encounter mounting competition from Chinese electric vehicle manufacturers in their respective domestic markets. He referred to statements made by Tesla's CEO, Elon Musk, who has expressed a preference for growth over profitability. Tavares further asserted that Stellantis, being more profitable than Tesla, is better equipped to face such challenges head-on.

Respecting Musk's perspective, Tavares noted Tesla's inclination towards prioritizing growth even if it affects short-term profitability. However, he also emphasized the potential challenges Tesla might face in dealing with aggressive pricing strategies from Chinese manufacturers. Tavares expressed confidence in Stellantis' ability to handle such scenarios, given their higher profitability compared to Tesla.

As the electric vehicle market continues to evolve and global competition intensifies, it is evident that even major players like Tesla will face new challenges. Stellantis, with its growing revenue and solid operating performance, is poised to navigate this evolving landscape successfully. The automotive industry is witnessing an exciting era of transformation, and both Tesla and Stellantis are significant contenders in shaping the future of electric mobility.