Stellantis Chief Executive Carlos Tavares expressed concerns on Friday regarding the rising costs imposed by European Union carbon emission regulations, which he said have increased production costs by 40% in the automotive industry. Speaking before an Italian parliamentary committee in Rome, Tavares highlighted the strain these regulations are placing on carmakers, particularly as customers remain hesitant to adopt higher-priced electric vehicles (EVs).
Tavares emphasized the additional pressure coming from Chinese competition in the EV market, which he said enjoys a 30% cost advantage over European manufacturers. “This is generating unbearable tension” within the industry, Tavares stated.
He also pointed to the high energy costs in Italy, noting that they are double those in Spain, where Stellantis also has production facilities, creating a “significant disadvantage” for Italian manufacturing. Stellantis is facing pressure to improve its financial performance after issuing a profit warning last week.
Tavares added that the burden of reducing costs will extend to Stellantis’ suppliers, many of which are small businesses. He reiterated that the current market is not yet capable of absorbing EVs unless their prices match those of traditional petrol vehicles, and he called for consistent, state-funded purchase incentives to support demand.
While acknowledging the challenges, Tavares made it clear that Stellantis is not seeking changes to the EU’s carbon emission reduction regulations, including upcoming targets for 2024. “We are ready,” he said, calling only for “stability in regulation.”
Stellantis has been facing criticism in Italy for its declining automotive production, which is expected to fall below 500,000 vehicles in 2024, down from 751,000 last year.
