Drivers are unlikely to buy electric vehicles (EVs) without hefty discounts, a top executive at Vauxhall owner Stellantis has claimed.
Emanuele Cappellano, the company’s European boss, said there was no “natural” demand for EVs and so government regulations forcing their sale risked turning the industry loss-making.
Demand only arises when subsidies are offered or when carmakers “burn cash” by slashing their prices, according to Mr Cappellano.
EV advocates rejected the claims on Friday and blamed inflation for sapping car company profits.
The row comes as parts of the automotive industry lobby Labour to relax rules aimed at phasing out the sale of new petrol cars by 2030 and hybrids by 2035.
Similar regulations were recently eased in Europe to allow more hybrid vehicles to be sold beyond then.
Stellantis is one of the world’s biggest carmakers and owns brands including Vauxhall, Citroen, Fiat, Peugeot and Jeep.
But Mr Cappellano warned that regulations forcing carmakers to sell more EVs were leaving “no room for profit” and did not reflect consumer preferences.
In an interview with French media, he warned the industry faced a choice between complying with the rules or losing money.
“Today, the choice is this: either I pay a fine, or I lose money selling new vehicles,” he said.
“In Europe, profit margins are shrinking and are on the verge of becoming negative. This is a major concern for us today. There is no natural demand for electric vehicles.
“Demand only arises when there are subsidies in various countries or when car manufacturers reduce prices by burning cash.
“Therefore, trying to increase the market share of electric vehicles only generates losses for car manufacturers.”
Porsche on Friday became the latest carmaker to post a sales slowdown amid weaker than expected demand for EVs.
But Tanya Sinclair, chief executive of Electric Vehicles UK, said inflation rather than EVs was to blame for the profits squeeze.
She said: “The environment is challenging, but one thing remains consistent. Consumer demand for electric vehicles is real.
“Prices are becoming more competitive, choice is expanding, and vehicle quality continues to improve.”
Several carmakers have repeatedly complained about EV sales targets that they say are too far ahead of demand, with Stellantis having previously warned that the UK’s own rules could force it to scale back its UK presence.
Because of their large batteries, many EVs are currently less profitable for manufacturers to sell than comparable petrol or hybrid vehicles.
There is also mounting concern about the growth of sales by Chinese manufacturers which are producing cars with smaller price tags – prompting some Western brands to shift their focus upmarket.
