Tavares: E-fuels will not affect industry's EV shift

Stellantis CEO Carlos Tavares said that e-fuels, which have received an exemption from policymakers in Brussels to the EU’s 2035 zero-emissions target for new cars, will not “significantly” change the trajectory of the auto industry. 
 
“We are well on our way to deliver the electrification that is expected from the EU,” Tavares said at Stellantis’ first “Freedom of Mobility” forum, which the automaker hopes will be an annual event.  

The forum on Wednesday addressed the question of whether “safe, clean and affordable” mobility would be limited to the “happy few” in the future because of rising costs.  
 
Tavares said that Stellantis’ decisions regarding electrification in the coming years were made in 2014-15, soon after he became CEO of PSA Group, which merged with Fiat Chrysler Automobiles in 2021 to form Stellantis.  
 
The EU has agreed to a demand from Germany and other countries to allow cars that run on e-fuels to be sold after a 2035, when all new cars must be carbon neutral. E-fuels can be processed from carbon dioxide with sustainable energy sources, although critics say the process is expensive and diverts energy needed for other uses. 
 
“I think e-fuels will be another technology direction that is going to be developed,” Tavares said. “The industry will have to demonstrate that they are carbon neutral, from the capturing of carbon on one side and the emissions of carbon from the engine on the other.”  

He also talked about the need for EVs to become lighter, which will happen if legislators support charging infrastructure, as well as if battery chemistry changes. This could mean smaller batteries and less weight, and thus lower costs.
 
The affordability question is also linked to the cost of raw materials, he said, adding that future battery chemistries and materials could change significantly.

“One of the most important ways to make clean mobility affordable is to make EVs lighter, which means finding better battery chemistries, using alternative materials and having a public infrastructure that supports shorter range,” Tavares said. “If the range is smaller, the weight is smaller; if the weight is smaller the cost is smaller.”

“At the end of the day EVs will be more affordable if the infrastructure is dense enough to provide peace of mind in terms of getting rid of range anxiety,” he added. 

Stellantis initiated the mobility forum after leaving the European auto lobbying group ACEA last year. The forum brought together six experts (including Tavares) from around the world to debate the affordability question, although it touched on issues of equality of opportunity, regional differences and the need to ensure that accessible mobility was gender-neutral. 

Tavares also said that climate change policies should not be used to influence global investment decisions or put countries in competition with each other.

"Policies on climate change should not be a weapon to rebuild competitiveness in a global trade approach," he said.

The United States last year announced $369 billion in subsidies to support clean technologies and electric vehicles under the Inflation Reduction Act (IRA), while China has been giving local automakers incentives for local production of battery electric vehicles.

The European Union responded last month with its proposed Green Deal Industrial Plan, on concerns that the U.S. law could put companies based in Europe at a disadvantage and drive investments out of the region.

Reuters contributed to this report