Stellantis Says If It Can't Sell EVs, It Won't Sell ICE Either

Stellantis Says If It Can’t Sell EVs, It Won’t Sell ICE Either

Stellantis is facing production cuts in Europe if it wants to meet 2025 emissions targets. The automaker, like many others on the continent, isn’t selling enough EVs. If it can’t sell enough EVs, like the Fiat 500e, its new COO says the company will cut production rather than pay fines or buy credits.

EU emissions targets are becoming stricter for 2025, and that means automakers need to sell more EVs. The trend will continue yearly until 2035 when allowable CO2 fleet emissions must hit zero. Stellantis is having trouble reaching that moving target, but while the automaker knows it will struggle to meet its targets, it also won’t join other automakers in asking for a reprieve.

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Tavares Says Company Must Push Forward To Avoid Losing To Chinese Rivals

It’s a complicated spot for Stellantis and its CEO, Carlos Tavares. Last week at the Paris auto show, Tavares said that stronger EU emissions targets were key to maintaining the competitiveness of European automakers. Delaying those targets at all, he said, meant that rivals from China would continue to pull ahead. “Every second we spend pausing is time we lose to improve,” he said at the show. He’s not the only auto exec to reach that conclusion.

But Jean-Philippe Imparato, newly appointed COO of the Europe region for Stellantis, highlights the jam this could leave the automaker mired in. Automotive News Europe reports that he said production cuts of combustion cars could start as soon as November 1 to avoid fines in 2025.

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Also at the Paris show, Imparato said that Stellantis would need electric vehicles to reach 24 percent of its total sales to meet the 2025 target. That’s double its current sales of EVs, which is the reason for the production cuts. Stellantis needs to either find twice as many customers to buy its EVs or stop selling as many cars with gas and diesel engines. Other automakers are also scrambling to meet the 2025 emissions targets. The new EU rules take effect on January 1st and cut fleet CO2 emissions from 106.6 g/km to just 95. Automakers missing that target face fines of €95 per gram per vehicle.

That means big bucks, with ANE reporting Renault CEO Luca de Meo as saying automakers could face €15 billion in fines. Automakers including Renault and members of the lobbying group ACEA are pushing the EU to review the targets. They’re asking for easing of the rules as EV demand has slowed.

Stellantis Won’t Pay Fines, Buy Credits To Hit Targets

While automakers have the option of paying fines or buying credits, Tavares has said neither is an option for Stellantis. “We will be compliant without the purchasing of credits,” the CEO said at the Paris show.

Instead, ANE reports that Imparato’s plan is to adjust overall production on EV orders. “Given that we produce only vehicles covered by a customer order, we’ll assemble as many ICEs as those needed to keep the EV share at the required level,” he said.

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Stellantis has also made a recent investment in Chinese automaker Leapmotor. That company is selling two EVs in Europe, and those sales will count toward the overall Stellantis fleet figure. Still, it’s not likely to bring the company up to the level it needs to be at. Imparato said that the sales targets can vary from country to country if need be. He said dealers in Spain and Italy, where EVs are under 5 percent, wouldn’t be expected to hit 20 percent next year. But higher-rate EV countries like the Netherlands could need to hit 50 percent. That means big incentives for dealers to help move EVs.