Reducing Production Costs is Imperative, Affirms Citroën CEO
In the rapidly evolving electric vehicle (EV) market, Citroën, the French automobile brand under Stellantis, is making waves by competing head-on with Chinese battery-electric vehicle (BEV) manufacturers. The strategy? A focus on competitive pricing, aided by government subsidies and grants, and a broad range of electric models across various categories.
Thierry Koskas, CEO of Citroën, believes that being able to compete on the cost of production is crucial for the brand in the electric vehicle market. This approach is evident in the launch of Citroën's entry-level BEV, the ë-C3, which retails for €23,000 ($26,000) after government incentives.
To further solidify their position, Citroën is aiming to repeat the feat of competitive pricing with the BEV version of the new C5 Aircross midsize SUV, expected to be priced competitively with Chinese BEV manufacturers. This SUV is set to launch this week.
The ë-C3 is currently built at the Stellantis facility at the Trnava site in Slovakia, while the BEV version of the new C5 Aircross midsize SUV is being produced at the highly automated Kragujevac plant in central Serbia. Labor costs at these locations are significantly lower than in Citroën's domestic French market.
However, it's important to note that direct detailed data on Citroën’s internal production costs compared to Chinese manufacturers is not readily available. Instead, Citroën leverages government subsidies and grants to reduce effective consumer prices automatically at purchase, strategic pricing of multiple electric models across different categories, and support from Stellantis’s global scale and development investments.
As the EV market continues to grow, price remains a significant factor in attracting consumers to switch to electric vehicles. Some auto executives, including those with Mahle and Toyota, predict that automation will lead to fewer jobs in the car making process.
In addition to the BEV version of the new C5 Aircross midsize SUV, Citroën also offers a plug-in hybrid version. This variant, set to hit European markets in the second half of 2025, boasts an electric-only range of 62 miles (100 km) in urban areas.
With its competitive pricing strategy and a diverse range of electric models, Citroën is making a strong case for itself in the European EV market, even as it faces stiff competition from Chinese manufacturers.
[1] Electric Car Grant, UK Government: https://www.gov.uk/plug-in-car-grant [2] Citroën UK: https://www.citroen.co.uk/ [3] Stellantis: https://www.stellantis.com/ [4] European Union Tariffs on Chinese Imported BEVs: https://www.euractiv.com/section/transport- mobility/news/european-union-tariffs-on-chinese-imported-bevs-not-considered-a-help-by-koskas-in-competing-against-chinese-brands/ [5] Labor Costs at the Kragujevac plant in central Serbia: https://www.serbia-info.eu/kragujevac-car-manufacturing-plant-continues-to-grow/
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