Background on Stellantis and the EU’s Carbon Emission Targets
Stellantis, a French-Italian automobile manufacturer, might be compelled to close factories due to the looming threat of substantial fines from the European Union (EU) for failing to meet carbon dioxide (CO2) emission targets, according to the company’s Europe head, Jean-Philippe Imparato.
EU’s Push for Reduced Emissions and Automotive Industry Response
The EU is striving to limit the catastrophic effects of climate change by pushing automakers to sell more electric vehicles (EVs) and reduce CO2 emissions. As a result, automakers face the risk of penalties if they don’t meet these new regulations.
The automotive industry has successfully lobbied for additional time to comply with the regulation, as fines will now be based on emissions from 2025-2027 instead of solely from 2025.
Imparato’s Concerns and Potential Consequences
Jean-Philippe Imparato, Stellantis’ Europe director, expressed concerns that the current targets remain unattainable for automakers and expose his company to fines of up to 2.5 billion euros (approximately 2.95 billion USD) within two to three years.
During a speech at the Italian Chamber of Deputies in Rome, Imparato warned that without significant regulatory changes by the end of this year, Stellantis would be forced to make “difficult decisions.”
Imparato explained that Stellantis would need to either drastically increase its EV sales, which is currently unfeasible, or decrease gasoline and diesel vehicle production to improve its energy mix in favor of electric vehicles. He stated, “I have two solutions: either I push hard (with EVs)… or I close the internal combustion engine (ICE) factories. And therefore, I close plants,” mentioning the Italian commercial vehicle factory in Atessa as an example.
Key Questions and Answers
- What are the EU’s carbon emission targets for automakers? The EU aims to reduce CO2 emissions from new car registrations to 37.5% below 2021 levels by 2030.
- Why is Stellantis at risk of fines? Stellantis may not meet the required targets for EV sales, exposing them to substantial fines from the EU.
- What are Stellantis’ options to avoid fines? Stellantis can either significantly increase its EV sales or decrease gasoline and diesel vehicle production.
- Which factory might be closed due to these regulations? Imparato mentioned the possibility of closing the Atessa commercial vehicle factory if EV sales do not meet targets.
