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Peugeot boss calls for more affordable electric cars

The chief executive of Groupe PSA, the French conglomerate that owns the Peugeot, Citroën and Vauxhall brands, has said carmakers must make bridging the gap between the cost of developing electric vehicles and selling them at a profit their first priority and must consider any option to achieve that.

Carlos Tavares told the Financial Times: “Affordability will be the challenge for the next five years, in terms of costs. Those breakthroughs need to come from real estate, distribution costs, sourcing. All the components of cost structure will have to be combined to bring this affordability.”

Tavares said that on average, consumers and carmakers in the EU benefit from subsidies worth around €12,000 for every electric car, thanks to a package of incentives and other measures.

“This is the gap that we need to close if we want to offer this to the biggest possible number of citizens, which means all sorts of cost reductions need to be addressed to face this challenge,” he added.

PSA, for its part, intends to scale back its office network, which has been sitting empty during the pandemic, as the company’s staff worked from their homes.

We are going to shrink our real estate footprint. This will represent a benefit for employees. They will spend less money on transportation to go back and forth, and will have a better work-life balance.

Carlos Tavares, CEO, Groupe PSA

PSA is planning on maintaining some of its office spaces for teams to meet when it’s considered necessary, he added. This would enable the company to maintain profitability, but at the same time increase sales of battery and hybrid vehicles, in order to meet new continent-wide emissions regulations introduced by the EU. PSA, in common with almost all major global carmakers, is developing its electric vehicle capabilities, with the prospect of demand rising later this decade.

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