How Peugeot is responding to Tesla's price cuts

SOCHAUX, France -- Peugeot won’t cut its prices to compete with Tesla in Europe, but instead will aim to make its electric vehicles more “accessible” though a range of financing offers and progressively reducing manufacturing costs by 40 percent through 2030, brand CEO Linda Jackson said.

Jackson, speaking at Peugeot’s factory in Sochaux at the reveal of the new 3008 compact SUV – which is being aggressively promoted in Europe as an EV – said she wants to maintain Peugeot’s upper-mainstream market profile.

“We’ve got lots of other Stellantis brands in those positions,” she said, speaking of lower-priced vehicles. 

The Tesla Model Y, a fastback-styled SUV like the new 3008, is the best-selling vehicle in Europe this year. Tesla CEO Elon Musk has aggressively cut prices by thousands of euros, edging the premium brand into the same territory as Peugeot and Volkswagen. 

Through July, Tesla sold 122,404 Model Ys in Europe, according to figures from Dataforce, while Peugeot sold 58,430 3008s (electric and internal-combustion models).

The Model Y – classified as a midsize model vs the compact 3008 -- starts at 45,990 euros in France, while the VW ID5 fastback full-electric midsize SUV starts at 56,400 and the compact ID4 SUV starts at 44,000 euros. 

Peugeot has not announced prices for the e-3008, but the Stellantis brand uses VW as a benchmark, Jackson acknowledged.

The e-3008 will stand out from the Model Y on range, Jackson said, as well as a focus on design including the latest version of Peugeot’s i-Cockpit dashboard. It will be available with two battery sizes, one offering 525 km (326 miles) and one 700 km; the Model Y offers 455 km or 533 km of range.

Rather than focusing on price, Jackson said the question should be “How do we make our EVs accessible to as many people as we can?”

One way Peugeot is doing that is through a new low-cost “pay as you go” lease program in France and Italy. Customers can get an e-208 small hatchback for 130 euros a month after an initial payment of 2,000 euros, an e-2008 small SUV for 200 euros a month or an e-308 compact hatchback for 230 euros a month. That includes 500 km (additional distances are extra). "You can drive an EV for about 150 euros a month," Jackson said.

“We can do that through our interest rates and very good residual values,” Jackson said, referring to Stellantis’ captive financing arm.

In addition to leasing strategies, she said Peugeot would progressively lower the cost to build an EV by 40 percent through 2030, as part of Stellantis’ “Dare Forward” strategic plan. Anticipated levers for this include a vertical EV supply chain, R&D and manufacturing efficiency, and reducing distribution costs, including moving to a direct sales “agency” model.

“We're introducing new EV platforms that are built for efficiency, and we're opening gigafactories, which allow us to own the vertical supply chain,” she said. The e-3008 is the first Stellantis model on the STLA Medium platform, the first of four “electric first” platforms that will underpin the group’s future EVs.

The e-3008 is being launched with batteries from BYD, but it will eventually use batteries built in Europe by ACC, a joint venture of Stellantis, Mercedes-Benz and Total-Saft. 

Jackson would not reveal the cost per kilowatt of ACC batteries, but she said, “We wouldn't be introducing our own gigafactories if we weren't going to gain efficencies.”