The entire European automotive industry will crash if legislation concerning CO2 reductions isn't revised by the end of the year, Stellantis’s most senior executive in Europe has warned.

Speaking at the Munich motor show, Stellantis Europe boss Jean-Philippe Imparato said there was "a sense of urgency” ahead of cross-industry talks with European Commission President Ursula von der Leyen on Friday and there should be "less discussions, more actions", which should include a new European-specific category to bring back the sub-€15,000 city car segment.

Current European legislation has the industry working towards a 55% reduction in CO2 levels for cars and 50% for vans by 2030 and a 100% reduction by 2035, based on 2021 levels. This will necessitate a dramatic increase in EV sales. 

"We'd like to stop discussion and see action – now," said Imparato. "For the period of 2026 to 2030 and to 2035, the CO2 thresholds are not reachable. The market isn't there, the economic context isn't there, the charging stations are not there and the price [of EVs] is not competitive.

"Sixty per cent of the industry in Europe is for cars below €40,000, and we cannot meet the expectations of the customers here [with what the legislation requires around EVs]. We will never meet the thresholds requested, and if we don't, we will crash the entire automotive industry."

Imparato's comments came after BMW CEO Oliver Zipse warned the European car industry "will halve" if manufacturers are forced to comply with the rules as they are currently written.

Imparato outlined four areas on which the industry had broadly agreed and would be presenting to von der Leyen and her officials, and he said he would like the focus of the talks to be on these points rather than "spending hours discussing percentages".

First, the industry wants to address LCV (sub 3.5-tonne vans) legislation, which "is not reachable at all", as "nobody will buy a €50,000-plus [electric] Fiat Ducato today".

Imparato wants to see LCV CO2 emissions reductions pooled over a rolling five-year basis and adapted to include any and all relevant technologies, including diesel.

"The current legislation is just writing the crash of the LCV industry below 3.5 tonnes in Europe," he said.

Second point of order is the legislation to enable the return of the A-segment city car in Europe. Imparato said there were once 49 city car models below €15k but now there is just one, as these cars are no longer profitable to make.

Imparato called on a specific category to be introduced for the rebirth of the A-segment in Europe, modelled on the likes of kei car rules in Japan and similar legislation in Brazil.

These would be capped with CO2 emissions of around 110g/km and could be mild hybrids with caps on power outputs and speed. They would be built in Europe with high levels of European content and with specific homologation to avoid the "€1500 per car of legislation" that Europe currently calls for, the likes of active safety technology having pushed up prices of city cars and made them no longer profitable.

Third, Imparato detailed a proposal to focus less on pushing the sale of new EVs but more on the "renewal of the car parc" and incentivising customers who are keeping onto their cars for ever longer periods to move into a new car of any type.

"Today, we put all our energy into BEVs. Can we consider the 256 million cars already in the European car parc now that are ageing one month every year?" he asked.

Imparato said the average age of a car in Europe was now 12 years. If an average 15-year-old car were taken off the road, the average new car would have 76g/km-lower CO2 emissions.

Imparato would therefore like to see incentives to take older cars off the road and car makers being "given the benefit of the CO2 savings" in calculating carbon emissions, rather than focussing on the tailpipe.

"I don't need the money, just the credit for the CO2 savings," he said.

The final proposal is a greater focus on promoting B-segment EVs instead of the whole market, given this is the core of the European market.

Imparato said car makers should be given 'super credits' for selling them, as they are vital in supporting the wider European industry, the likes of battery makers and supply chains that have been set up.

He is confident that progress will be made in the talks, and the fact that the proposals have been broadly agreed across all major car makers (with some pushing certain proposals of the four more than others, based on their own business needs) backs up that confidence.

Imparato added that legislators cannot ignore that the market trajectory has not worked out as had been projected when the legislation and targets were first written, hence the need to act now.

"We’re together," Imparato said, when asked if car makers are truly aligned in their approach. "We are not here [at the Munich show] to sell cars. This is the first time we're aligned in our messages and position in a positive way, with added value proposals. I hope that the regulator reacts positively and decides something by the end of the year."