PSA Group acquired German manufacturer Open and UK automotive firm Vauxhall at the beginning of last month in a takeover estimated to have cost the French company €2.2 billion euro. PSA Chief Executive Carlos Tavares has publicly stated that he is in support of growing glamour towards the adoption of electric vehicles amongst the auto sector. However, he emphasized that his support will only continue if the electric cars produced by Open are profitable.
India and China are two of the fastest-growing auto sectors in the world, and both Indian and Chinese governments are aggressively pursuing policies in relation to the adoption of electric vehicles. India are currently set to table legislation that bluntly directs car manufacturers in India to start developing their own EV's or they run the risk of being overtaken by policy regulations.
However, while India and China lead the way in terms of strategy and proposed implementation in relation to 'electrification' - they're not isolated in its ambition to overhaul the outlook of the automotive sector in their countries. In the UK, the government has said it will prohibit the sales of diesel cars by 2040, while Scotland says it will phase out all sales on diesel and petrol cars by 2032.
Electrification is being pursued all over the world by governments and regulators after Volkswagen's infamous diesel cheating scandal which the auto sector and exposed higher-than-expected pollution levels amongst all car brands.
PSA Group's Chief Executive stressed that while he is in support of electric cars if it is not accepted by consumers then car manufacturers, governments and regulators are presented with a huge challenge.
avares said, "If it works and companies can be profitable that's good. But if it does not gain acceptance in the market, then everybody: industry, employees, and politicians have a big problem. We as PSA will make the technology available to Opel to pursue further electrification. If Opel wants to become a fully electric brand someday, we're ok with that, providing it is profitable."
Tavares concluded his statement by declaring that electric cars need to be accepted in the market without the offer of any subsidies. Opel Chief Executive Michael Lohscheller was emphatic when queried as to whether or not he believed Opel's electric range will be profitable in three years. He insisted that Opel 'must be' competitive and said the strategy it has in place will ensure it will be profitable.
Reports emerging from the German automotive industry claimed that Opel's losses widened in the second quarter to around $250 million. However, shareholders have expressed their confidence that under the tutelage of French giants PSA Group, the company's fortunes will be turned around and that it will steer Opel back into profitability and growth.
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