The head of Stellantis, the maker of Fiat and Jeep, informed Italian parliamentarians on Friday that manufacturing cars in Italy is too expensive due to high energy costs, and that demand for electric vehicles will only increase with strong incentives.
CEO Carlos Tavares stated during a parliamentary industry commission hearing that the automaker has planned new models for all its factories in Italy “until 2030, and in some cases, until 2033.”
“However, this is insufficient. The issue lies in the costs, which are 40 percent higher in Italy compared to what our competitors face,” Tavares said, as reported by Italy’s AGI agency.
Tavares pointed out that energy costs in Italy are “very high,” being double those in Spain.
“This poses a significant disadvantage and prevents us from maintaining our profit margins,” he added.
“Manufacturing vehicles that are unaffordable for the middle class is pointless,” Tavares stated.
Stellantis was formed in 2021 through the merger of Peugeot Citroen and Fiat Chrysler.
The group announced on Thursday that Tavares will retire when his contract expires in January 2026.
Tensions have escalated in recent months between Prime Minister Giorgia Meloni’s government and Stellantis, with Rome accusing the multinational of shifting production to lower-cost countries at the expense of Italian factories.
In September, the government decided to withdraw European Union funds designated for an electric car battery “gigafactory” due to uncertainties surrounding the project’s timeline from ACC, a joint venture involving Stellantis, Mercedes, and French oil and gas giant Total Energies.
Regarding electric vehicles, Tavares emphasized that it is the responsibility of Italian lawmakers to stimulate demand.
“Why aren’t we selling electric cars in Italy? They are too expensive. We need to make them affordable through incentives and subsidies. How? That’s your decision. To boost demand, we require substantial incentives; otherwise, we won’t succeed,” Tavares stated.