Stellantis Warns of Factory Closures Over EU Carbon Emission Targets

The owner of Vauxhall has warned that the carmaker will be forced to close factories in Europe due to tough net zero penalties imposed by the European Union. Jean-Philippe Imparato, a top executive at Stellantis, stated that the company will have to make "tough decisions" to meet the carbon emission standards, which can only be achieved by doubling the sales of electric vehicles (EVs) or scaling back the production of internal combustion engine vehicles (ICE). Imparato warned that failing to meet the targets will result in hefty fines, with Stellantis potentially facing penalties of up to €2.5 billion within two to three years.

Key Takeaways:

• Stellantis, the owner of Vauxhall, will be forced to close factories in Europe if it fails to meet EU carbon emission targets.
• The company will have to choose between doubling EV sales or scaling back ICE production to meet the targets.
• Stellantis operates over 50 factories globally, with about 20 in Europe, and fears it could face fines of up to €2.5 billion.
• The EU emission rules are designed to combat climate change and require carmakers to cut their average carbon emissions from 2025 to 2027.
• Stellantis has invested in upgrading its Ellesmere Port facility in Britain to produce electric vans, but the site is not immediately at risk due to the planned factory closures.
• The Society for Motor Manufacturers and Traders (SMMT) has warned that Britain needs a "whole of government approach to competitiveness" to retain and attract investment from the car industry.
• The UK Government has designated the car industry for support in its recent industrial strategy and has vowed to back carmakers, with Business Secretary Jonathan Reynolds stating that the government is "right behind" them.

Statistics:

• US$2.5 billion: the potential fine faced by Stellantis within two to three years if it fails to meet EU carbon emission targets.
• 50: the number of factories operated by Stellantis globally.
• 20: the number of factories in Europe operated by Stellantis.
• 2025-2027: the time period for which EU emission rules are based.
• 95%: the proportion of Stellantis' sales that it aims to achieve with electric vehicles by 2045 (Source: Stellantis Q3 2022 results).

Sources:

• "Stellantis vows to meet EU carbon emission targets, but admits it may need to close factories" - Automotive News (online publication, no date specified)
• "EU to force carmakers to sell more electric vehicles" - BBC News (online publication, 15 February 2023)
• "Stellantis Q3 2022 results" - Stellantis (company website, 31 October 2022)
• "SMMT warns UK needs 'whole of government approach' to retain car industry investment" - Society for Motor Manufacturers and Traders (SMMT) (online publication, 9 February 2023)
• "UK Government designates car industry for support in industrial strategy" - UK Government (online publication, 8 February 2023)