Stellantis CEO Warns of Dangers in Aggressive Cost Cutting Following Tesla's Price Drop

In the competitive world of automotive manufacturing, a strategic pricing move from one company can have far-reaching implications across the industry. Recently, Tesla Inc. TSLA significantly reduced the price of its top-selling SUV, a decision that caught the attention of automotive executives worldwide. This price cut could potentially trigger a cascade of cost reductions among competitors to stay competitive. However, not everyone sees this as a winning strategy. Carlos Tavares, CEO of Stellantis NV STLA, the parent company of Chrysler, expressed serious concerns about this approach during his speech on Friday. Tavares cautioned against price reductions that could threaten automotive companies' profitability and, in turn, make them vulnerable takeover targets. While reducing costs might seem like an immediate solution to stay competitive, especially in the face of Tesla's aggressive pricing, Tavares suggests such a strategy could ultimately lead to 'a bloodbath' in the industry.

Stellantis, Tesla, Pricing