(Bloomberg) -- Stellantis NV Chief Executive Officer Carlos Tavares warned the auto giant is feeling the strain from rising raw material prices and expects semiconductor shortages to stretch into next year.
“I see the inflationary pressure very clearly,” he said on a webinar organized by the Detroit-based Automotive Press Association. “I see inflation coming from many different areas.”
There’s a “disconnect” between the view of some economists that price increases aren’t structural and what Tavares said he’s seeing in the day-to-day operations of the company. Transaction prices are rising and lacking supply of components like semiconductors is causing disruptions and cost increases, he said.
Stellantis is the latest major European manufacturer to sound the alarm about a significant rise in the cost of raw materials and shortages of key components. Mercedes-Benz maker Daimler AG and Dutch paint producer Akzo Nobel NV also raised the prospects of lingering inflation earlier Wednesday.
Read more: Spiraling Raw Materials Costs Puts Manufacturers in Crisis Mode
Stellantis, created earlier this year from the merger between PSA Group and Fiat Chrysler, is doing its best to protect the Ram truck brand and key new model launches from the effects of the chip shortage, Tavares said.
Other topics covered during the wide-ranging conversation included:
- Talks are ongoing for a battery plant in the U.S., while another slated for North America could be located in Canada.
- Tavares lifted the veil a little more on a new strategy for China promised by year-end, saying an upscale, fully electric Opel is destined for the market.
- Stellantis has now validated technology from a solid-state battery partner that it will invest in. Tavares declined to identify the company.
- The automaker also is in talks with two companies to secure supplies of lithium for EV batteries.
©2021 Bloomberg L.P.
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