The Netherlands-headquartered Stellantis Group seeks Indian auto parts suppliers’ support to its electric vehicle programme; the second-largest car manufacturer in Europe believes that India could help in developing and producing affordable electric cars, not just for the domestic market, but globally.
The group is contemplating introducing its first electric car in India – an electric variant of its Citroen C3 SUV – early next year. The group has been selling its SUVs in India under two brands – Jeep and Citroen.
“We are among those who are preparing to launch a compact EV, manufactured in India for the Indian market. If any Indian supplier or entity would like to support us, we are ready to localise and to do more work on EVs here in India. If we become a competitive EV manufacturer in India, we can export to other markets also,” Group CEO of Stellantis Carlos Tavares, who was here to review Citroen’s manufacturing operations at Thiruvallur near Chennai, told Businessline during a media interaction.
Though Citroen is the latest entrant into the Indian passenger vehicles market, the company has localised over 90 per cent of the parts for its ICE vehicles. “We could find the right Indian suppliers, who were able to meet our requirements,” he added.
However, according to Tavares, India’s supply chain for electric vehicles is still evolving as Stellantis still not able to find a local supplier for batteries, a key component in EVs. “We would love to buy all components for EVs, including batteries from Indian suppliers. We are very open for discussions,” he added.
Tavares also said that India had become a favourite country given the ongoing geopolitical tensions between the West and China. While growing tensions are not good for the world, there will be consequences for businesses globally. But India will be best placed to leverage the emerging opportunities – from parts sourcing perspective or on technology, the country is the superpower that can seize the opportunities.
Meanwhile, challenges remain for the industry as well as the consumers to shift from ICE to EVs. While energy and charging infrastructure are the key, there is a differential pricing in energy costs for charging EVs in several markets.
While public investments in charging infrastructure could make tariffs affordable, private investments in charging infrastructure may be expensive due to huge capital and higher taxes, etc. It would not help the planet if EVs are bought by wealthy people. It should be made affordable to the masses. For EVs, it is not a technology problem, but more of an affordability issue,” he added.
Not chasing volume
Discussing Indian operations, the Head of Stellantis said the group didn’t have the intent to chase volumes in India as it is a niche player in the Indian PV market. The combined monthly volumes of Jeep and Citroen vehicles are in the range of 2,500-3,000 units.
The group appears to be following an asset-light model and it has only made brownfield investments for the Citroen business in India. The group has a 30 per cent better cost structure than its peers when making investments, claimed Tavares.
With its frugal investments and better cost structure, Indian operations are profitable and the Group as a whole is in black. “Of course, not all operations in India are in black, some are in red. But as a whole we are profitable,” he said.