Another car maker threatens factory closures as pressure to increase EV sales weighs heavy
Another major car manufacturer has said it may be forced to close factories as the motor industry faces headwinds linked to mounting pressure to transition to electric vehicles.
Stellantis - the parent company of massive brands including Citroen, Fiat, Peugeot and Vauxhall to name just a few - said it may be forced to shutter vehicle plants due to the risk of hefty European Union fines levied for not complying with CO2 emission targets.
European head of the Franco-Italian auto maker Jean-Philippe Imparato says EU-based car manufacturers will must sell more EVs to cut CO2 emissions or risk penalties as part of the bloc's efforts to hit air pollution targets.
It comes just months after the European motor sector successfully lobbied for more time to comply with rules, with fines to be based on 2025-2027 emissions rather than just in 2025.
However, Imparato says even these more relaxed targets are 'unreachable' for car makers and will expose his company to fines of up to €2.5billion (£2.15bn) within 'two-to-three years'.
Stellantis earlier this year closed Vauxhall's 100-year-old Luton van factory, putting 1,100 jobs at risk. When it announced the move in November, it partly attributed the decision to the UK Government's stringent EV sales targets.
Stellantis - the parent company of massive brands including Citroen, Fiat, Peugeot and Vauxhall to name just a few - said it may be forced to shutter vehicle plants due to the risk of hefty European Union fines levied for not complying with CO2 emission targets
European head of the Franco-Italian auto maker Jean-Philippe Imparato (former CEO of Alfa Romeo) says EU-based car manufacturers must sell more EVs to cut CO2 emissions or risk penalties as part of the bloc's efforts to meet air pollution targets
Speaking at a conference in the lower house of parliament in Rome on Tuesday, the former Alfa Romeo CEO (which is also owned by Stellantis) said that without significant changes in the regulatory situation by the end of this year, the company would 'have to make tough decisions'.
To achieve the targets set out by the EU, Stellantis either needs to double its electric vehicle sales - which Imparto said would be impossible - or cut the production of petrol and diesel cars to artificially increase its share of EV deliveries.
The latter would see internal combustion engine (ICE) cars rationed for customers at a time when many are not ready to commit to EVs and could hammer the manufacturer's sales volumes.
'I have two solutions: either I push like hell [on electric]... or I close down ICE. And therefore I close down factories,' he said.
During this statement Imparto mentioning the Italian van-making plant of Atessa, where it produces both ICE and electric variants of the Fiat Ducato, Citroen Jumper, Peugeot Boxer, and Opel/Vauxhall Movano. Pictured: An electric e-Ducato on the assembly line in November 2024
Staff members work at the assembly line of Stellantis' Sevel van-making plant in Atessa, Italy
The latest in a wave of cutbacks linked to EV slowdown
During this statement Imparto mentioning the Italian van-making plant of Atessa, where it produces the Fiat Ducato, Citroen Jumper, Peugeot Boxer, and Opel/Vauxhall Movano. It has been building electric versions of these models since November 2024.
His comments come just three months after the last van has rolled off the assembly line at Vauxhall’s historic Luton factory following Stellantis' decision to cull the century-old site.
Marking ‘the end of an era’, the last Vivaro van came off the Bedfordshire production line on Friday 28 March, lowering the curtain on 120 years of vehicle-making at the Bedfordshire factory.
Its closure had been announced four months prior in November 2024, with the company confirming that 1,100 jobs would be at risk - though workers would be offered positions at its EV-making plant over 100 miles away in the northwest of England.
Vauxhall's Luton plant that employs 1,100 people saw the final van roll off its production line on Friday 28 March 2025 as Stellantis moves its electric van production to Ellesmere in Cheshire
The Luton plant had the capacity to make 100,000 vehicles a year, although in the past decade it has built between 60,000 and 78,000 vans a year
At the time, Stellantis bosses said that the decision was made 'within the context of the UK's Zero Emission Vehicle (ZEV) mandate'.
It has seen the manufacturer consolidate its UK van production at its recently converted Ellesmere Port plant, which for years produced Astra family cars before being upgraded to the UK's first major EV van-making facility.
Stellantis had warned earlier in 2024 that plants were at risk because of government pressure on car firms to meet ZEV targets that incrementally rise each year.
Last year, mainstream manufacturers were required to have an electric car sales mix of 22 per cent (10 per cent for vans). This year, the threshold increased to 28 per cent (16 per cent for vans) and in 2026 it is a third of all passenger car deliveries (24 per cent vans).
By 2030, four in five new cars will need to be electric, with the remaining 20 per cent being hybrid models.
As for vans, some petrol and diesel versions will be allowed to be sold until 2035 under more relaxed adjustments to targets implemented by Sir Keir Starmer in April in response to US President Donald Trump's announcement of increase tariffs that sent shockwaves across industries.
The PM also slashed fines for failing to meet the yearly-rising ZEV mandate targets by 20 per cent from £15,000 to £12,000 for cars, and by 18 per cent (from £18,000 to £15,000) for vans.
Stellantis bosses said the decision to close its Luton van factory was made 'within the context of the UK's Zero Emission Vehicle mandate', which demands an increasing share of EV registrations by mainstream brands between now and 2035
The closure of the Luton factory forms part of the group’s plan to consolidate its UK manufacturing of vans to create an all-electric hub at its Ellesmere Port plant
Vauxhall has been at Luton since 1905, so it's a huge change for the Bedfordshire community and county to not have a production plant there anymore
Audi earlier this year closed its EV factory in Brussels. The plant produced just 53,555 Q8 e-tron and Q8 e-tron Sportback cars in 2023, which is less than half the factory's full output capacity
The 350,000 sq.ft Brussels facility has been manufacturing the Q8 e-Tron and the Q8 e-Tron Sportback since 2022. It had been billed the 'cradle' of the German car maker's electric drive
Reports in recent months have linked manufacturer factory closures and job losses to pressures linked to the EV transition.
In March, it emerged that Skoda was considering laying off 6,000 people as part of drastic cuts to keep up with an expensive electric car rollout.
Audi in December announced it would shutter its EV factory in Belgium, which resulted in 3,000 jobs cut. The factory in Brussels had been billed the 'cradle' of the German car maker's electric drive.
Volkswagen also said last year it could be forced to shut three vehicle plants in Germany due to the EV slowdown.
However, it has since reached a deal with European union workers that averts immediate factory closures and involuntary redundancies. Part of these negotiations involve significant job cuts and a reduction in production capacity across their German plants by 2030.
