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Stellantis CEO: EV transition costs are “beyond the limits” the auto industry can sustain
Stellantis CEO Carlos Taveres stated that the pressure for legacy automakers to accelerate the shift to electric vehicles could threaten jobs and vehicle quality as traditional carmakers struggle to manage the higher costs of producing EVs.
Taveres said that the costs of transitioning to electric vehicle production are “beyond the limits” of what the current auto industry can sustain in an interview with Reuters Next. He also highlighted the pressure legacy OEMs get from governments and investors to speed up the transition to electric vehicles.
“What has been decided is to impose on the automotive industry electrification that brings 50% additional costs against a conventional vehicle,” he said.” “There is no way we can transfer 50% of additional costs to the final consumer because most parts of the middle class will not be able to pay.”
He noted that traditional automakers would have to either charge higher prices and make fewer cars or accept lower profit margins to keep up with the additional costs of transitioning to electric vehicles. Taveres emphasized that both paths lead to cutbacks.
Many union leaders in Europe and North America agree that thousands of people could lose their jobs if the auto industry transitioned to EV production. US President Joe Biden is trying to tread the line between pushing legacy OEMS towards transitioning to EVs and providing job security in the auto industry.
Biden has openly supported the Detroit Big Three’s — Ford, General Motors, and Stellantis — EV goals, while puzzlingly ignoring Tesla’s role in the current electric vehicle revolution. The US President seems keen on only promoting automakers that are affiliated with unions in his bid to make the United States of America a powerhouse in the global electric vehicle market, all while ignoring the powerhouse that is Tesla, which already operates within the country.
In the summer, the Detroit Big Three announced their commitment to increase each of their electric vehicle sales by about 40% by 2030. Some may argue that the Detroit Big Three’s EV transition goals go against the current tides, considering that a few countries have already committed to banning fossil fuel cars by the end of this decade, while others are seriously considering the move.
In his recent interview, Tavares noted that automakers need time to test and ensure electric vehicle technology works. He said that speeding up the process “is just going to be counterproductive. It will lead to quality problems. It will lead to all sorts of problems.”
So far, Ford seems to be the only automaker in the Detroit Big Three taking serious steps to becoming an electric vehicle producer. The Ford Mustang Mach-E has proven to be quite a favorite amongst the OEM’s customers. The Mustang Mach-E is still far from perfect, though, as some owners do have critiques about the vehicle and its infrastructure support.
However, Ford seems to be failing forward and learning from its mistakes and improving on the fly — similar to Tesla in some ways. As for Stellantis, it has invested €30 billion into its electrification strategy. On Tuesday, the company invested in solid-state battery startup Factorial.
“We can invest more and go deeper in the value chain,” Tavares said. “There may be other (investments) in the near future.”
In July, the company held Stellantis EV Day 2021, where it announced intentions to become a market leader in low emissions vehicles (LEV) by 2030. Stellantis aims to make over 70% of its sales in Europe and 40% in the United States be comprised of LEVs. The company also stated that all 14 of its brands are committed to offering best-in-class fully electrified solutions.
“Over the next five years, we have to digest 10% productivity a year … in an industry which is used to delivering 2 to 3% productivity” improvement, Tavares said.
It wasn’t clear whether he was referring to productivity in electric vehicle development only. Stellantis stills seem adamant in slowly transitioning into an electric vehicle producer. However, the CEO did get one thing right on the bullseye.
“The future will tell us who is going to be able to digest this and who will fail,” Tavares said. “We are putting the industry on the limits.”
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News
Tesla exec pleads for federal framework of autonomy to U.S. Senate Committee
Tesla executive Lars Moravy appeared today in front of the U.S. Senate Commerce Committee to highlight the importance of modernizing autonomy standards by establishing a federal framework that would reward innovation and keep the country on pace with foreign rivals.
Moravy, who is Tesla’s Vice President of Vehicle Engineering, strongly advocated for Congress to enact a national framework for autonomous vehicle development and deployment, replacing the current patchwork of state-by-state rules.
These rules have slowed progress and kept companies fighting tooth-and-nail with local legislators to operate self-driving projects in controlled areas.
Tesla already has a complete Robotaxi model, and it doesn’t depend on passenger count
Moravy said the new federal framework was essential for the U.S. to “maintain its position in global technological development and grow its advanced manufacturing capabilities.
He also said in a warning to the committee that outdated regulations and approval processes would “inhibit the industry’s ability to innovate,” which could potentially lead to falling behind China.
Being part of the company leading the charge in terms of autonomous vehicle development in the U.S., Moravy highlighted Tesla’s prowess through the development of the Full Self-Driving platform. Tesla vehicles with FSD engaged average 5.1 million miles before a major collision, which outpaces that of the human driver average of roughly 699,000 miles.
Moravy also highlighted the widely cited NHTSA statistic that states that roughly 94 percent of crashes stem from human error, positioning autonomous vehicles as a path to dramatically reduce fatalities and injuries.
🚨 Tesla VP of Vehicle Engineering, Lars Moravy, appeared today before the U.S. Senate Commerce Committee to discuss the importance of outlining an efficient framework for autonomous vehicles:
— TESLARATI (@Teslarati) February 4, 2026
Skeptics sometimes point to cybersecurity concerns within self-driving vehicles, which was something that was highlighted during the Senate Commerce Committee hearing, but Moravy said, “No one has ever been able to take over control of our vehicles.”
This level of security is thanks to a core-embedded central layer, which is inaccessible from external connections. Additionally, Tesla utilizes a dual cryptographic signature from two separate individuals, keeping security high.
Moravy also dove into Tesla’s commitment to inclusive mobility by stating, “We are committed with our future products and Robotaxis to provide accessible transportation to everyone.” This has been a major point of optimism for AVs because it could help the disabled, physically incapable, the elderly, and the blind have consistent transportation.
Overall, Moravy’s testimony blended urgency about geopolitical competition, especially China, with concrete safety statistics and a vision of the advantages autonomy could bring for everyone, not only in the U.S., but around the world, as well.
News
Tesla Model Y lineup expansion signals an uncomfortable reality for consumers
Tesla launched a new configuration of the Model Y this week, bringing more complexity to its lineup of the vehicle and adding a new, lower entry point for those who require an All-Wheel-Drive car.
However, the broadening of the Model Y lineup in the United States could signal a somewhat uncomfortable reality for Tesla fans and car buyers, who have been vocal about their desire for a larger, full-size SUV.
Tesla has essentially moved in the opposite direction through its closure of the Model X and its continuing expansion of a vehicle that fits the bill for many, but not all.
Tesla brings closure to Model Y moniker with launch of new trim level
While CEO Elon Musk has said that there is the potential for the Model Y L, a longer wheelbase configuration of the vehicle, to enter the U.S. market late this year, it is not a guarantee.
Instead, Tesla has prioritized the need to develop vehicles and trim levels that cater to the future rollout of the Robotaxi ride-hailing service and a fully autonomous future.
But the company could be missing out on a massive opportunity, as SUVs are a widely popular body style in the U.S., especially for families, as the tighter confines of compact SUVs do not support the needs of a large family.
Although there are other companies out there that manufacture this body style, many are interested in sticking with Tesla because of the excellent self-driving platform, expansive charging infrastructure, and software performance the vehicles offer.
Additionally, the lack of variety from an aesthetic and feature standpoint has caused a bit of monotony throughout the Model Y lineup. Although Premium options are available, those three configurations only differ in terms of range and performance, at least for the most part, and the differences are not substantial.
Minor Expansions of the Model Y Fail to Address Family Needs for Space
Offering similar trim levels with slight differences to cater to each consumer’s needs is important. However, these vehicles keep a constant: cargo space and seating capacity.
Larger families need something that would compete with vehicles like the Chevrolet Tahoe, Ford Expedition, or Cadillac Escalade, and while the Model X was its largest offering, that is going away.
Tesla could fix this issue partially with the rollout of the Model Y L in the U.S., but only if it plans to continue offering various Model Y vehicles and expanding on its offerings with that car specifically. There have been hints toward a Cyber-inspired SUV in the past, but those hints do not seem to be a drastic focus of the company, given its autonomy mission.
Model Y Expansion Doesn’t Boost Performance, Value, or Space
You can throw all the different badges, powertrains, and range ratings on the same vehicle, it does not mean it’s going to sell better. The Model Y was already the best-selling vehicle in the world on several occasions. Adding more configurations seems to be milking it.
The true need of people, especially now that the Model X is going away, is going to be space. What vehicle fits the bill of a growing family, or one that has already outgrown the Model Y?
Not Expanding the Lineup with a New Vehicle Could Be a Missed Opportunity
The U.S. is the world’s largest market for three-row SUVs, yet Tesla’s focus on tweaking the existing Model Y ignores this. This could potentially result in the Osborne Effect, as sales of current models without capturing new customers who need more seating and versatility.
Expansions of the current Model Y offerings risk adding production complexity without addressing core demands, and given that the Model Y L is already being produced in China, it seems like it would be a reasonable decision to build a similar line in Texas.
Listening to consumers means introducing either the Model Y L here, or bringing a new, modern design to the lineup in the form of a full-size SUV.
Elon Musk
Elon Musk reiterates Tesla Optimus’ most sci-fi potential yet
Musk shared his comments in a series of posts on social media platform X.
Elon Musk recently reiterated one of the most ambitious forecasts for Tesla’s humanoid robot, Optimus, stating it could become the first real-world example of a Von Neumann machine. He also noted once more that Optimus would be Tesla’s biggest product.
Musk shared his comments in a series of posts on social media platform X.
Optimus as a von Neumann machine
In response to a post on X that pondered on sci-fi timelines becoming real, Musk wrote that “Optimus will be the first Von Neumann machine, capable of building civilization by itself on any viable planet.” In a separate post, Musk wrote that Optimus will be Tesla’s “biggest product ever,” a phrase he has used in the past to describe the humanoid robot’s importance to the electric vehicle maker.
A Von Neumann machine is a class of theoretical self-replicating systems originally proposed in the mid-20th century by the mathematician John von Neumann. In his concept, von Neumann described machines that could travel to other worlds, use local materials to create copies of themselves, and carry out large-scale tasks without outside intervention.
Elon Musk’s broader plans
Considering Musk’s comments, it appears that Optimus would eventually be capable of performing complex work autonomously in environments beyond Earth. If Optimus could achieve such a feat, it could very well unlock humanity’s capability to explore locations beyond Earth. The idea of space exploration becomes more than feasible.
Elon Musk has discussed space-based AI compute, large-scale robotic production, and the role of SpaceX’s Starship in transporting hardware and materials to other planets. While Musk did not detail how Optimus would fit with SpaceX’s exploration activities, his Von Neumann machine comments suggest he is looking at Tesla’s robotics as part of a potential interplanetary ecosystem.