Stellantis CEO Carlos Tavares last month said the sweet spot for affordable electric vehicles is "around $25,000," adding that reaching this price point will be essential to safeguarding the company's US manufacturing footprint in the long run.
He also warned that the middle class will be priced out of the EV market if automakers can't absorb the additional production costs they require instead of passing them onto consumers.
Tavares added that building affordable EVs that are also profitable for the company is "the real thing we should be discussing" with the United Auto Workers (UAW) union during negotiations this year.
"We need to work very hard to reach that point," Tavares said of the hypothetical $25,000 EV for the US, according to Automotive News. "Part of the things we need to discuss with our union partners is how we make affordable EVs in the U.S. that the middle classes can buy and that they are sustainable because they are profitable."
That being said, the company's goal to reduce its fixed-cost structure in pursuit of more affordable EVs is not compatible with the UAW's demands for higher wages and benefits.
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As it turns out, the likelihood of Stellantis building a $25,000 EV is very small at the moment as contract negotiations with the UAW are not going well at all. UAW President Shawn Fain said automakers can build affordable EVs in the United States but not by making workers sacrifice.
"The electric vehicle transition does not have to be a race to the bottom. Unfortunately, Stellantis has taken the low-road approach, resulting in closed plants and destroyed communities," Fain said in a statement to Automotive News. "Stellantis' business model is broken, and until they fix it, they'll never hit that $25,000 target," he added.
On a livestream last week, Fain threw a copy of proposals from Stellantis into a trash can, saying the carmaker "spit in the face" of UAW members by seeking stricter attendance rules, reduced healthcare coverage, and other concessions.
UAW's current four-year contracts with Stellantis, General Motors and Ford Motor Company expire September 14.
There's no $25,000 EV available in the US at the moment, with the least costly option being the outgoing Chevrolet Bolt EV, priced at $27,495 including shipping.
Stellantis plans to launch two affordable EVs in Europe priced around 25,000 euros (approximately $27,300). The Citroën e-C3 will arrive in early 2024, followed by a Fiat Panda-inspired model to be unveiled in July 2024.
