Stellantis CEO Tavares Seeks Supply-Chain Control

Stellantis CEO Carlos Tavares makes a strong case for vertical integration and strategic investments by OEMs, to guarantee access to certain critical materials and components, such as lithium for electric-vehicle batteries, computer chips for electronics, and EV batteries themselves.

“Certainly, we will have to have a better control of some of our supply chains, that is a given,” Tavares says in an online event hosted today by the Automotive Press Assn. in Detroit.

“The challenge is to determine which supply chains you want to control,” he tells Joe White,

global automotive industry editor for Reuters, who moderated the discussion. “You need to select strategic, scarce raw materials — the few things you need to control.”

On July 8, for example, Stellantis announced it would invest more than €30 billion (about $35 billion) through 2025, in electrification and related software.

The plan also includes memorandums of understanding with two lithium suppliers in North America and Europe to ensure a sustainable supply of lithium, plus a separate investment in building five battery “gigafactories,” three in Europe and two in North America, including at least one in the U.S.

Tavares says Stellantis is also looking into sourcing more computer chips from outside Asia, a reference to the ongoing shortage of chips. He says in the presentation the shortage will “easily” last into 2022.

He stresses that OEMs can’t vertically integrate everything, just the most important things. “Stellantis has 110 different models. Each model has, on average, 4,000 parts,” Tavares says. “You’re not going to do that 100%.”