Stellantis Under Pressure: CEO Calls EU EV Targets ‘Unrealistic’ as Stock Drops

Stellantis N.V. (STLA) is facing headwinds as CEO Antonio Filosa urges European Union action to support the region's car industry amid escalating competition from Chinese rivals. The stock is currently down 28.95% year-to-date, reflecting market concerns about the company's prospects.

The market is reacting to Filosa’s call for the EU to adopt flexible measures to aid the automotive industry’s transition to electric vehicles (EVs). He argues that current EU targets are “unrealistic” and excessively stringent, leading to increased costs for small cars and a slump in sales.

Filosa, who assumed the CEO role in June, is advocating for policies that promote hybrid vehicle sales and the replacement of older cars to reduce CO₂ emissions effectively. He also highlighted the urgent crisis in the light commercial vehicle sector, proposing an extension of CO₂ emissions evaluation periods from three to five years.

The challenges facing Stellantis are compounded by increased U.S. tariffs, stringent electrification mandates, and intensifying competition from Chinese companies like BYD, Changan, and GAC. European automakers are also experiencing declining sales in China, once a crucial market, with Porsche's Chinese sales dropping 28%. Chinese brands are expanding their market share in Europe, nearing doubling to 4.8% through July 2025 and potentially reaching 14% within a decade.

The European automotive industry is pushing for a more flexible emissions strategy that includes hybrids alongside EVs, similar to China’s approach. Industry leaders argue that the EU’s 2035 ban on new petrol cars is too inflexible and risks damaging Europe’s largest industry by pushing all investments solely into EVs. Currently, hybrids and plug-in hybrids account for 43% of the EU market, compared to EVs at 17% for the first half of the year.

Stellantis is implementing several strategies to counter Chinese competition, including localizing production in the U.S. to avoid tariffs and forming a joint venture with Leapmotor to access China's EV expertise and supply chains.

The company is also rationalizing its brand portfolio, pruning underperforming names to focus resources on key brands like Jeep, Ram, and Peugeot, potentially saving €1 billion annually.

Analysts are closely watching Stellantis' strategic moves and the EU's response to industry concerns. The company's ability to navigate tariffs, manage the EV transition, and compete with Chinese automakers will be crucial for its future performance.