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Chinese carmakers will end up as “saviours” of European factories and jobs, in a creeping takeover that will hasten the demise of some western manufacturers, the former head of Peugeot and Jeep maker Stellantis Carlos Tavares has warned.
In a return to the limelight after leaving Stellantis nearly a year ago in a boardroom clash, Tavares sketched a gloomy picture for European auto groups in particular, as they grapple with stringent emissions regulations, the global trade war and shifting policy on electrification.
Tavares told the Financial Times that this fallout over the next 10 to 15 years would happen in part as China’s carmakers, already on the lookout for takeover targets, make further inroads in Europe, building up capital stakes or buying factories on the verge of closure.
“There are lots of nice windows being opened up for the Chinese,” Tavares said in an interview in Paris. “The day a western carmaker is in severe difficulty, with factories on the verge of closing and demonstrations in the street, a Chinese carmaker will come and say ‘I’ll take it and keep the jobs’, and they’ll be considered saviours.”
The 67-year-old himself signed a deal with Chinese manufacturer, Leapmotor, taking a 20 per cent stake in the group and helping it break into international markets. He defended the move but added he was also aware Leapmotor had its own motivations for entering the partnership.
“The reason is simple, it’s that they want to swallow us some day,” he said, revealing that he had been approached by several Chinese companies to run or advise their business.
BYD and other Chinese brands have been rapidly increasing their market share in the UK and other European markets with affordable and advanced electric vehicles and hybrids despite higher import tariffs imposed by Brussels.
France’s Renault has also partnered with Geely in the internal combustion engine business, while Nissan has said its Chinese partner Dongfeng could start producing at its Sunderland plant in the UK.
Tavares left the company he helped create in a $50bn megamerger between France’s PSA and Italy’s Fiat Chrysler Automobiles in 2021, following a collapse in sales in both Europe and the US.
The struggles at Stellantis highlighted the increasingly fractious debates weighing on manufacturers as some delay a shift into EVs, hamstrung by high costs and the revival of petrol vehicles in the US under President Donald Trump.
The Portuguese executive, who built a career in France first at Renault and then at the helm of Peugeot maker PSA, said his insistence on pursuing the battery-powered pivot that the EU had imposed cost him his job.
The European Union would now undoubtedly abandon its internal combustion engine ban by 2035, Tavares forecast, lambasting the huge waste and “stupidity” of EU decisions to box in the industry in the first place.
European carmakers are lobbying hard to allow other technologies such as hybrids to be sold after 2035. “Who is holding the EU to account for the €100bn of investments that won’t be used? No one,” Tavares said.
Tavares said he had “no regrets” and was not in “self-flagellation” mode — although he joked that one of the car industry’s problems was that “like me, its bosses have big egos and characters and want to show their friends they are right”.
He has forecast in a newly-published memoir that only five or six carmakers would survive globally, starting with Toyota of Japan, South Korea’s Hyundai, China’s BYD and “probably” another Chinese company like Geely. He also raised questions about the future of Stellantis and predicted Tesla will lose out to Chinese rivals.
Written in French and whose title translates as A pilot in the storm, the book dedicates an entire chapter to a defence of his pay at Stellantis, which stoked the ire of unions and even shareholders, especially when it hit €36.5mn in 2023.
The executive, who has long predicted a “Darwinian” outcome for the industry and was known for slashing costs, took a no-holds barred approach to some of Europe’s big companies in his memoir.
Germany’s Volkswagen represented Europe’s “inability to change”, he wrote, while Tesla would “end up completely overtaken by Chinese manufacturers”, with boss Elon Musk likely to pivot to other pursuits.
Tavares told the FT that Stellantis was “strategically perfectly created for globalisation”, but its board would now have to decide if that was still the right approach.
He said he would argue it was — although the group had three factories too many in Europe. Stellantis declined to comment.
The former executive, who is investing in businesses in his native Portugal, wrote he would only return to the car industry if he had a big enough stake in any company he was running.
“I’ve set an impossible condition on the idea, which is another way of saying I’m not going to do it,” Tavares said.
