New PSA Strategy Group 'Will Deliver 40 Electrified Cars By 2025'

The owner of Peugeot, Citroen, DS, Opel and Vauxhall is setting up a new internal strategy group to combat EVs from rival brands
New PSA Strategy Group 'Will Deliver 40 Electrified Cars By 2025'

French car maker PSA is – apparently reluctantly – forming a business unit to focus on electric cars in an attempt to keep pace with the likes of the Volkswagen Group and the Renault Nissan Mitsubishi Alliance.

The owner of Citroen, Peugeot and DS, not to mention Opel and Vauxhall since buying them from General Motors, will have a new outfit operational in 2019. It will be dedicated to “defining and deploying the group’s electric vehicle strategy and rolling out the related products and services,” PSA said in a statement.

PSA is worried about the profitability of making its cars electric and hybrid
PSA is worried about the profitability of making its cars electric and…

Carlos Tavares, chief executive of the group, is known to be relatively anti-EV. The Financial Times quotes him displaying a clear resistance to change at the Frankfurt Motor Show last year. He said:

“If you have ministers in Europe who say they will forbid the use of internal combustion engines, then I have to comply and we will have to transform, re-engineer and retrain. But if electrification is not profitable in future, we all have a problem.”

PSA says it will conjure up 40 electrified vehicles by 2025, many of which will share derivatives of the same mild, closed and plug-in hybrid systems.

Source: Financial Times

Comments

Tomislav Celić

40 sounds like a lot TBH.

But then again when you count a Peugeot 308 hybrid, Peugeot 308 EV, Peugeot 308 wagon hybrid, Peugeot 308 wagon EV it doesn’t sound like much.

04/06/2018 - 10:23 |
16 | 3

40 is still quite a lot. Sounds like PSA are planning to go full Lotus.

04/06/2018 - 10:56 |
11 | 0
Aaron 15

I’m really not looking forward to the future 😔

04/06/2018 - 10:24 |
4 | 1
Tomislav Celić

In reply to by Aaron 15

Honestly, do you even bother that your neighbors Peugeot 308 is diesel or electric?

04/06/2018 - 10:25 |
6 | 2
Tomislav Celić

I don’t understand how something can be “unprofitable”

Simply charge more for the car.

Someone explain this to me

04/06/2018 - 10:25 |
1 | 3

It’s not difficult…
If there’s less interest, less people will buy it. By charging more you’re overcharging and driving away most of the few customers you had already. That’s not how it works.

04/06/2018 - 10:35 |
7 | 0

But then nobody will buy the car

04/06/2018 - 10:42 |
0 | 0

Charge more = fewer people buy it. The issue is that developing new EVs has a huge one-time cost as well as a cost per unit sold. Let’s say the development costs £1 billion (other currencies are available) and each car costs £15,000 to produce.

If the car is sold at £25,000, you make £10,000 profit on each car so you need to sell 100,000 cars to make up for the development costs. So if only 80,000 people buy it, you make a loss.
Now if you up the price to £35,000, you make £20,000 profit per car, so only 50,000 cars will need to be sold. But if the number of people willing to buy the car falls faster than the rate at which profits increase as price goes up (this is called an “elastic demand curve” or “high price sensitivity” then this tactic won’t work.

04/06/2018 - 10:54 |
2 | 0

London School of Economics :
‘Bro you want a scholarship ?’

04/06/2018 - 12:44 |
0 | 0
Anonymous

I misunderstood this as by 2025 PSA will have created 40 physical electric cars. I was underwhelmed to say the least.

04/06/2018 - 10:39 |
24 | 1
Ian MacDonald

In reply to by Anonymous (not verified)

Yea, it was beginning to sound a bit like Tesla…

JK, I hope they pull through.

04/06/2018 - 11:57 |
2 | 0
Jeremy S.

I’m not really a fan of electric cars. 1 because there is no sweet engine sound. 2 because they are really expensive to buy and make

04/06/2018 - 11:01 |
2 | 0

There is no such thing as a sweet enfin sound in 95% if cars in circulation….

04/06/2018 - 12:43 |
1 | 1
dmackster1124

This sounds like Trump’s administration, putting people who don’t acknowledge global warming in charge

04/06/2018 - 12:02 |
2 | 1
Anonymous

I’m actually pretty interested to see what they do with Vauxhall in this regard. After all, electrifying (either hybrid or EV) their cars would push the price up exponentially - expensive cars aren’t really Vauxhall’s forté. If they can sell EVs cheaply though, then it could just revolutionise the whole market.

04/06/2018 - 17:51 |
1 | 0

Topics

Sponsored Posts