Reducing Manufacturing Expenses is Paramount, asserts Citroën CEO
In the rapidly evolving electric vehicle (EV) landscape, Citroën, under the umbrella of parent company Stellantis, is facing mounting pressure to reduce production costs and transition towards electrification. This is in response to stringent EU regulations and the competitive edge held by Chinese battery-electric vehicle (BEV) manufacturers.
Chinese EV manufacturers, such as those producing affordable models in mass quantities, have a significant cost advantage in the EU market. Their streamlined production processes and aggressive pricing strategies have allowed them to capture approximately 25% of the EU electric vehicle market [2][4].
In contrast, Stellantis and Citroën are navigating a challenging transition. The looming EU carbon emission targets threaten existing internal combustion engine (ICE) manufacturing sites and demand substantial investment to shift to EV production [1]. Unlike the Chinese mass production approach, Stellantis aims to balance cost control with brand premiumization, investing in emotional and culturally resonant design shifts to maintain perceived value [4].
European automakers, including Stellantis, are grappling with profitability pressures due to high tariffs, transition costs, and sales declines in China. Some are pivoting towards plug-in hybrid electric vehicles (PHEVs) as transitional products to manage costs and regulatory pressures [3].
Thierry Koskas, CEO of Stellantis's French Citroën brand, emphasizes the need to match Chinese manufacturers' production costs to compete effectively in the BEV market. This is evident in the launch of Citroën's entry-level BEV, the Citroën e-C3, priced at €23,000 ($26,000). The e-C3 is currently being produced at the Stellantis facility in Slovakia and Serbia, where labor costs are lower than in the brand's domestic French market [5].
Automation is a key feature of BEV manufacturing, raising concerns about job losses in the car-making process. Koskas has highlighted price as crucial for attracting consumers to switch to battery-electric vehicles [6].
This week, Citroën is expected to launch the BEV version of the new C5 Aircross midsize SUV, with hopes of repeating the cost-matching feat achieved with the e-C3 [7]. The new model is scheduled for availability in European markets in the second half of 2025.
Meanwhile, the Dodge Charger, an Internal Combustion Engine (ICE) vehicle, is set for restoration in 2026, with new packages such as the Durango Jailbreak and Charger Scat Pack to be unveiled [8]. The plug-in hybrid version of the new model will offer a 62-mile (100-km) electric-only range in urban areas [9].
In summary, Chinese EV manufacturers leverage scale, aggressive pricing, and streamlined production to achieve a cost advantage in the EU market, enabling them to undercut European brands like Citroën on price. In contrast, Citroën's strategy under Stellantis is more focused on managing costly regulatory compliance and restructuring production while trying to protect brand equity through design and premiumization rather than directly competing on the lowest cost. This makes Citroën less cost-competitive but positions it for differentiation based on brand identity [2][4].
The finance sector plays a crucial role in funding the transition of companies like Stellantis and Citroën towards electrification, as they seek to reduce production costs and meet stringent EU regulations.
To remain competitive in the electric vehicle industry, Citroën is investing in energy-efficient technology to reduce manufacturing costs, similar to the streamlined production processes employed by Chinese battery-electric vehicle manufacturers.
