Stellantis NV, the owner of Jeep and Ram brands, has announced its plan to manufacture an all-electric version of the Ram truck in a factory in the US. The CEO of Stellantis, Carlos Tavares made the announcement at the New York auto show, but he did not provide any further details on the production location.
Stellantis plans to start output of the battery-powered Ram model, called the Revolution, from next year. It will compete against Ford Motor Co.’s F-150 Lightning truck and an upcoming electric version of General Motors Co.’s Silverado, as well as Rivian Automotive Inc.’s R1T model and Tesla Inc.’s upcoming Cybertruck.
Automakers have an incentive from President Joe Biden’s Inflation Reduction Act to build vehicles and batteries in the US or with the nation’s free trade partners in order to be eligible for up to $7,500 in consumer tax credits.
Tavares said, “We source locally where we sell locally,”. He has bemoaned the premium costs to build electric vehicles in the US potentially 40% higher.
Tavares asked, “How do we tackle those” additional costs. “If we don’t do it, we will have significant reduction in the market because the middle class won’t be able to buy EVs. Everybody would lose from that situation.”
Cost cuts could pit Stellantis against the United Auto Workers union this year when the two sides bargain for a new contract. New union President Shawn Fain ran on a campaign to bargain for a fair share from automaker.
The company idled an assembly plant in Illinois and has been making other cost cuts. The union is irate over the factory halt, which could set the stage for tense talks and raise the possibility of a strike.