Even though the European Union has granted car manufacturers a reprieve to meet its new emissions standards, Stellantis is sounding the alarm. Stellantis Europe president Jean-Philippe Imparato is saying that the company risks paying up to €2.5 billion (nearly $3 billion USD or $4 billion CAD) in penalties if it fails to meet CO₂ targets by 2027.
Initially set for 2025, the standards now impose an average target of 93.6 g/km of CO₂ over the 2025-2027 period, instead of a single year.
But this respite isn't enough, according to Imparato. He warns that without regulatory adjustments, Stellantis will have to take drastic measures: “Either I push electric all the way, or I cut internal combustion vehicles... and therefore I close plants,” he told Automotive News Europe.
An increasingly restrictive future
From 2030, the bar will be even lower with a target of 49.5 g/km, before reaching total zero emissions in 2035. Although vehicles running on synthetic fuels will still be permitted, their commercial viability remains uncertain, especially on a large scale and in a short timeframe.
Stellantis is not alone in feeling this regulatory headache. Former Renault boss Luca de Meo has warned that the European automotive industry could face up to €15 billion in fines. Volkswagen anticipated a €1.5 billion bill if the original 2025 targets were not met.
Between sales, margins and Chinese competition
Automakers are caught in a bind. Artificially reducing production of gas-engine vehicles would cause sales to plummet, but offering too many incentives on electric vehicles to lower the average emissions would erode their already fragile margins. For many, selling EVs still means losing money.
And as if that weren't enough, the large-scale introduction of low-priced Chinese electric vehicles puts even more pressure on traditional European carmakers, who are already struggling with their energy transition.