Tesla‘s recent and drastic price cuts on its electric cars in various markets have shaken the global auto industry. However, automaker Stellantis has remained steadfast in its EV strategy and does not intend to engage in a price war with Tesla.
Stellantis has maintained that slashing prices would not align with the objectives of its profitable growth plan following the merger between PSA and FCA.
“I have no intention of getting into a price war, that hasn’t been our winning strategy for ten years, I don’t believe that’s the ‘Dare Forward 2030’ strategy, and we have no intention of changing it at the moment,” said Stellantis CEO Carlos Tavares during a visit to the Metz factory in France on April 27.
“On the other hand, if the whole market were to experience a drop in prices, we would have to adjust to the market, and we will have to accelerate, like my competitors, the reduction of costs to keep the sustainability of the company,” he added.
Tesla has made several rounds of price cuts on some of its newer models after ending one of the most challenging years in its history.
The automaker reduced prices on its Model Y and X SUVs and the Model 3 sedan and Model S hatchback. Its most significant adjustment was for the Model Y, which was lowered by 20%.
Stellantis’ decision not to engage in a pricing battle with Tesla highlights its focus on profitable growth. Instead, Stellantis is freeing up funds for its transition to electric vehicles by offering thousands of voluntary buyouts to hourly employees, hoping to reduce its workforce by around 3,500.
Ford Motor Company, on the other hand, responded to the market pressure and announced a price reduction of $4,500 for the Mustang Mach-E, which is comparable to Telsa’s Model Y.