Closures could be coming for electric vehicle manufacturing plants, according to the CEO of Chrysler parent company Stellantis NV (NYSE:STLA, EPA:STLA).
At the CES technology trade show Thursday, Carlos Tavares warned that higher electric vehicle prices will mean production will need to slow. The company already said it would idle one plant in Belvidere, Illinois due to costs.
That "will happen everywhere as long as we see high inflation of variable costs,” he said.
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According to Tavares, the auto industry absorbs roughly 40% higher costs for EVs. That markup could shrink the market below pre-pandemic levels.
"If the market shrinks, we don't need so many plants," Tavares said. "Some unpopular decisions will have to be made."
There is tension there, as almost 70% of prospective EV buyers in the US said they expect to spend less than $50,000 for their next vehicle, according to a survey conducted by Deloitte.
In addition to Chrysler, Stellantis owns Fiat, Dodge, Peugeot, Jeep and others. In October, Stellantis announced the debut of an all-electric Jeep, which is expected to appear in showrooms this year.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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