POLITICO — 2025-11-17
News from Brussels
The EU should weaken its green car rules in an upcoming policy announcement or else risk sending the industry into a tailspin, Stellantis Chair John Elkann warned in an interview with POLITICO.
"It's a tipping point. We have this moment where growth can be a choice, which is what has been decided in different parts of the world, or we accelerate the decline," Elkann said.
Elkann, heir to the Italian Agnelli family which is a leading shareholder in Stellantis and Ferrari, is joining other auto industry executives in a bid to sway the European Commission ahead of a Dec. 10 announcement of its automotive package, aimed at rescuing a troubled industry that employs over 13 million in the EU.
Car sales in Europe have failed to rebound to pre-pandemic levels, Chinese competitors are gaining market share with tech-filled electric vehicles and a trade war launched by U.S. President Donald Trump is upending traditional supply chains and balance sheets.
Fixing that means Brussels should rethink some of its green rules, including its regulation that ends the sale of new CO2-emitting cars from 2035 — essentially killing combustion engine car production, Elkann said.
He also wants the EU to make more of an effort to get old and polluting cars off the road in favor of new ones — a way of cutting CO2 emissions while boosting industry profits — and also incentivize the production of smaller cars.
The Commission's Dec. 10 package will include a reform of the 2035 legislation, a new regulation on greening corporate fleets, details around a battery package to boost production and potential local content requirements.
Stellantis and most — but not all — other carmakers want the reformed 2035 law to allow for so-called technological neutrality. That would enable more than battery-powered cars to meet zero-emission rules by also allowing plug-in hybrids with both batteries and combustion engines, range extenders — additional small combustion engines that extend the range of battery-powered cars — and greener alternative fuels that can run in combustion engines.
Elkann also wants the interim emission reduction targets on the way to 2035 to be averaged. The Commission has already done that once, watering down the target that carmakers were supposed to reach this year by allowing them to use an average across three years. That made it easier to avoid painful fines. Instead of a set target for 2030, the industry should be allowed to average emissions over five years, from 2028 to 2032, the Italian tycoon said.
As a mass market automaker, Stellantis supports Commission President Ursula von der Leyen's Small Car Initiative, announced at her State of the European Union address on Sept. 9, but Elkann sidestepped when asked if he thinks the initiative should include powertrains apart from electric vehicles. Von der Leyen said in her speech that the future is electric.
France and Spain put forward a proposal in October that would add flexibility on the 2035 combustion engine ban, but only if automakers meet yet-to-be-defined local content requirements.
Elkann said such requirements should be included in the small car package but declined to specify what percentage any policy should set or what should qualify as local content.
"Today it’s a concept, so it has not gone through the granularity, and in some ways, December 10 needs to address the regulations," he said. "If that’s not addressed, the e-car anyway will be wishful thinking."
Killing off jalopies
But the magic bullet, in Elkann's mind, is for the Commission to introduce a scrappage program to get older and more polluting cars off the road in Europe, which would lower overall emissions, as well as boosting the sale of new cars.
Elkann wants the sector to get credit for any emissions reduced by getting old bangers off the road, which would aid automakers in reaching future emission targets without having to reduce current combustion engine car sales.
Elkann and Stellantis have a lot of experience navigating turbulent political waters.
The Trump administration rolled back electric vehicle policies implemented under former President Joe Biden and kicked off a trade war that saw tariffs on car imports surge from 2.5 percent to 15 percent for European automakers as the U.S. president looks to reshore production on American soil.
French-Italian-American automaker Stellantis answered the call, announcing in October a $13 billion investment plan in the U.S. over the next four years.
No such schemes are slated for Europe — a fact the company blames on EU regulation.
"We see big growth there that is also driven by the fact that the current administration changed regulation and gave back to Americans the freedom of choice," Stellantis CEO Antonio Filosa said at a French conference on Nov. 4.
Despite Elkann and Filosa's warnings of decline, Stellantis recorded a net revenue of €37.2 billion in the third quarter this year, a 13 percent year-over-year increase. The automaker also approved a €2 billion cash dividend payout for shareholders in April.