Stellantis Faces Pushback from European Dealers Over EV Targets

Stellantis is facing increasing pressure from its European dealers over its aggressive transition to electric vehicles (EVs). In a significant development, four major dealer associations representing Stellantis’ European retailers have called on the European Union (EU) to delay stricter CO2 fleet emission targets set to take effect in 2025. This move pits the dealers against Stellantis CEO Carlos Tavares, who believes that the automaker is well-prepared to meet the new regulatory demands.

The dealers’ request, outlined in an open letter to European Commission President Ursula von der Leyen on October 7, 2024, argues that the current market conditions do not support the ambitious targets for battery-electric vehicles (BEVs). This tension mirrors frustrations already brewing among Stellantis’ American dealers, who have raised similar concerns regarding the EV transition and its impact on sales and profitability.

Stellantis European Dealers Request More Time to Meet CO2 Targets – 

The letter, signed by four dealer associations—AECP (representing Peugeot dealers), ACCDE (Citroën and DS Automobiles), ADEFCA (Fiat, Lancia, Abarth, Alfa Romeo, Jeep®, and Fiat Professional), and EURODA (Opel and Vauxhall)—urges the EU to reconsider its 2025 CO2 reduction targets. The dealers argue that a lack of affordable BEVs and insufficient charging infrastructure create a “significant gap between regulatory requirements and market capabilities.”

“We firmly believe that the CO2 reduction targets set for 2025 are unfeasible under current market conditions,” the associations wrote. They also asked the EU to consider “legislative changes that would facilitate a more gradual transition toward the 2035 targets” when the block aims for all cars sold to be zero-emission vehicles.

Carlos Tavares’ Response: Stellantis Is Ready for the EV Transition – 

Carlos Tavares, however, sees the situation differently. Speaking to journalists on September 17, 2024, in Turin, Tavares emphasized that the upcoming 2025 CO2 rules have been in place for years and that Stellantis is fully prepared to meet the new standards.

“My guys are ready for the fight,” Tavares declared. “Now, we are a few months before the race starts, and somebody says, hold on, change the rules.” He acknowledged that the market for EVs has slowed, particularly in Europe, but stressed that the global warming issue remains urgent.

Tavares also pointed out that some automakers calling for a delay may be concerned about profit margins, as they generally offer lower returns than internal combustion engine (ICE) vehicles. Additionally, EVs are more expensive to produce, putting financial strain on automakers grappling with the transition to greener technologies.

Despite these challenges, Tavares remains resolute, insisting that Stellantis is on track to meet the 2025 CO2 fleet emission targets.

Dealers Across Europe and America Push Back –

The call for regulatory leniency from Stellantis’ European dealers echoes the frustrations voiced by American dealers over the past year. In both markets, retailers are struggling with the high production costs of EVs, slower-than-expected consumer demand, and concerns over profitability.

In their letter to von der Leyen, European dealers expressed concerns about the strict sales targets for electric vehicles imposed by Stellantis and the EU’s upcoming regulations. They noted that the market is not yet ready to support the required volume of EV sales to meet the 2025 targets. The lack of affordable EVs and the phasing out of government incentives have left many dealers with unsold inventory, further compounding their concerns.

ACEA and Industry Pressure on the European Commission – 

This sentiment aligns with the position of ACEA (European Automobile Manufacturers’ Association), which called for “urgent action” ahead of the 2025 emissions targets. ACEA warned that failure to adjust the targets could result in billions of euros in fines for automakers, especially when electric vehicle demand slows across the continent.

ACEA has also urged the European Commission to expedite reviews of the CO2 regulations currently set for 2026 and 2027. However, Tavares has remained critical of this push for regulatory delays, reiterating Stellantis’ readiness to tackle the challenge head-on.

While some automakers may fear financial losses from the transition, others in the industry, like Volvo, have publicly supported the EU’s decision to keep the targets unchanged, emphasizing the need to continue pushing for greener technologies.

The Road Ahead: Can Stellantis Dealers Adapt to the EV Shift?

The clash between Stellantis’ leadership and its dealer networks highlights the auto industry’s broader challenges as it navigates the shift to electric mobility. With automakers required to double their BEV sales by the end of 2025 to comply with the EU’s 95 grams per kilometer (g/km) CO2 limit, dealers feel immense pressure.

The road ahead is uncertain for Stellantis dealers in Europe and the U.S. The next few months will be crucial in determining whether Tavares’ confidence in the company’s EV strategy holds firm or if dealers’ mounting pressure will shift the automaker’s approach.

As the industry grapples with the costs of transitioning to electric vehicles, Stellantis dealers are left to navigate a challenging market where zero-emission vehicles are not yet widely affordable or supported by sufficient infrastructure. Whether the EU will grant more time to meet its ambitious targets remains to be seen, but for now, Stellantis is standing its ground, ready to embrace the future of electric mobility.

The rising tension between Stellantis CEO Carlos Tavares and the company’s European and American dealers highlights the complexities of the electric vehicle transition. While Tavares insists that Stellantis is prepared for the fight, dealers call for more time to meet the EU’s stringent CO2 fleet emission targets. With 2025 fast approaching, the debate over EV sales and profitability is far from over, and the pressure on both automakers and dealers will only intensify as the deadline looms.

Source: Automotive News Europe