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July 1 EST: Stellantis is facing a deadline it can’t afford to miss.
If the company falls short of new European carbon emissions rules, it could face up to €2.5 billion in penalties within two to three years—and that’s forcing tough conversations at the highest levels. Jean-Philippe Imparato, the automaker’s head of European operations, confirmed Tuesday that internal combustion engine (ICE) plant closures are on the table.
The math is simple and unforgiving: either Stellantis doubles EV sales—which executives say is “impossible” in the time left—or it starts shuttering factories that build gasoline and diesel models.
One plant in the crosshairs: Atessa, a major commercial van facility in Italy.
A Regulatory Squeeze With Real-World Costs
Under the EU’s current framework, carmakers must cut fleet-wide emissions across 2025–2027 or face escalating fines. The law doesn’t require each year to hit the target—compliance is measured across the three-year average—but the penalties don’t wait for laggards to catch up.
That’s why Stellantis is staring down a possible multi-billion-euro hole if it doesn’t move quickly. And with market EV demand still lumpy—strong in Norway and the Netherlands, weak in southern Europe—the company’s not betting on consumer behavior to close the gap.
So, it’s triaging. Production strategy is being reevaluated. Carbon credit purchases are being considered. And yes, facilities that can’t pivot to electric may not survive the transition.
Credit Markets and Contingencies
The likeliest stopgap? Buying emissions credits—something Stellantis and others have done quietly for years, especially from Tesla, whose all-EV fleet allows it to monetize excess compliance margin. But credits aren’t cheap, and overreliance draws scrutiny from regulators and investors alike.
Closing or pausing production at high-emitting plants would provide a more durable fix—but with labor and political consequences that can’t be easily managed. Governments have stakes, unions have leverage, and the optics of closing a plant in Italy or France while EV platforms are built elsewhere won’t play well.
Not Just Stellantis
Stellantis isn’t operating in a vacuum. Competitors face the same math. Dealers across Europe have already warned that the 2025 targets will “inevitably” reduce ICE production—especially in price-sensitive regions where EV adoption is slower and infrastructure remains thin.
The EU’s decision earlier this year to average emissions across 2025–2027—rather than impose a strict single-year target—was seen as a concession to industry. Stellantis welcomed the move. But it wasn’t enough.
Behind closed doors, industry groups are pushing for more: expanded credit trading, fiscal incentives, delays. Publicly, they toe the line on climate goals. Privately, they’re modeling worst-case scenarios.
The Bottom Line
Stellantis has committed €30 billion to electrification over the next five years. But those platforms won’t come online fast enough to solve 2025. That year will be won—or lost—by managing compliance, not innovation.
For now, the message is clear: Stellantis will meet the numbers, one way or another. If that means closing a plant, so be it.
This isn’t a strategic pivot. It’s a forced hand.
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