Gary Zhou 
Key Points
- 🏭 Tesla is now facing the realities of manufacturing and competition in the automotive industry, according to Stellantis CEO Carlos Tavares.
- 📉 Tesla’s profitability has declined, moving from over 17% in the first half of 2022 to 10.5% in the first half of 2023.
- 💰 Stellantis, on the other hand, has seen an improvement in revenue and operating profit, with an almost unchanged margin on adjusted EBIT at 14.4%.
- 🇨🇳 Tavares acknowledges that all automakers, including Tesla, will face rising competition from Chinese electric vehicle manufacturers in their domestic markets.
- 📈 Tavares believes that Stellantis, being more profitable than Tesla, is better positioned to handle challenges posed by the Chinese market and potential price cuts.
Carlos Tavares, CEO of Stellantis, has remarked that Tesla, the American electric vehicle manufacturer, is now facing the challenges of real-world manufacturing and competition. He also highlighted Tesla’s declining profitability during the presentation of Stellantis’ first-half results.
According to Tavares, Tesla’s entry into his world involves dealing with tight pricing, cost competitiveness, and operational issues that larger companies like Stellantis may encounter. He pointed out that Tesla’s profitability has dropped from over 17% in the first half of 2022 to 10.5% in the first half of 2023. Previously, Tesla was more profitable than Stellantis, but the situation has now reversed.
In contrast, Stellantis reported an improvement in revenue and operating profit for the first half of this year, with an almost unchanged adjusted EBIT margin at 14.4%.
Tavares acknowledged that all automakers, including Tesla, would face increased competition from Chinese electric vehicle manufacturers in their respective domestic markets. He referenced Tesla CEO Elon Musk’s preference for growth over profitability and noted that Stellantis, with its higher profitability, would be better prepared to handle such challenges.
Tavares emphasized that if a race to the bottom, involving price cuts to compete with Chinese manufacturers, were to occur, Tesla might face difficulties with that strategy before Stellantis, given their higher profitability.
