for PSA, lowering costs is a priority

for PSA, lowering costs is a priority Auto

for PSA, lowering costs is a priority

Anticipating the gradual decrease in government bonuses, the French group wants to make lower costs a priority for its electrical offensive.

“Affordability will be the challenge for the next five years in terms of costs,” said the boss of the tricolor group in an interview with the Financial Times. For Carlos Tavares, it is a question of managing to do without financial aid, which is now essential to guarantee the balance between thermal and electric vehicles.

In France, electric cars now benefit from a bonus of up to € 7,000 which can be supplemented by a conversion bonus of € 5,000, or € 12,000 in total. “This is the gap that we must close if we are to offer this to as many citizens as possible. This means that all kinds of cost reductions must be addressed to face this challenge, ”said Carlos Tavares.

Savings at all levels

While lowering the prices of various components, and primarily batteries, remains a priority, PSA is also considering other levers to reduce its fixed costs. In the real estate sector, the group has already moved its headquarters, abandoning its historic site, avenue de la Grande Armée, for the outskirts of Paris. With the Covid crisis and the development of teleworking, the group intends to continue to reduce its real estate footprint. “This will be a benefit for the employees. They will spend less money on transport and have a better work-life balance, ”Tavares believes.

Substantial savings which will enable the manufacturer to cope with the substantial investments linked to the development of its electric and hybrid offer. A statement that comes the day after the presentation of the group’s quarterly results, an event during which PSA announced the launch of a new platform, eVMP, intended to equip electric vehicles in segments C and D.

Author’s opinion

While it is constantly increasing, the electric car remains an “infused” market and heavily dependent on state aid. With more and more sales, the amount of public aid continues to increase. Supposed to be offset by the penalty mechanism, this envelope is not infinite and the State has already planned to reduce it. At the end of 2019, the Ministry of Ecology already announced a gradual reduction in the aid allocated, citing an ecological bonus reduced to 5,000 euros and 2021 and to 4,000 euros in 2022. If the next finance bill and the associated decree will allow these new amounts, the trajectory is moving towards a gradual decrease in the aid granted

For manufacturers, who must also juggle with varying systems from one country to another, the strategy is not obvious. It is a question of both managing to offer ever more efficient cars, particularly in terms of autonomy, while incurring a significant reduction in costs to manage to do without government aid doomed to disappear as quickly as possible. The room for maneuver is not wide …

Source: www.automobile-propre.com

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