Stellantis proposes CO₂ credits and compact cars below €15,000 in Europe

At the latest Munich Motor Show (IAA Mobility 2025), which opened on 8 September, Jean-Philippe Imparato, Stellantis's European chief, set out two proposals primarily intended to cut sector emissions without relying exclusively on sales of fully electric cars.

As well as lowering emissions, both measures could help renew the vehicle fleet, whose average age continues to rise not only in Portugal, where it has already exceeded 14 years, but across Europe, where the average has reached 12 years.

One proposal would grant CO₂ credits to manufacturers through a scrappage-incentive scheme; the other would establish an entirely new vehicle category.

CO₂ credits to renew Europe's car fleet

The first measure would operate as a form of offset mechanism for car makers. Scrapping an older vehicle and replacing it with a new car or a used model under three years old would earn a credit of 70 g CO₂/km.

Imparato said both proposals had already been submitted to ACEA, the European Automobile Manufacturers' Association, although they received mixed responses. A meeting with the European Union is scheduled in Brussels for 12 September, following the Strategic Dialogue on the sector's future.

Stellantis's European boss maintained that renewing the existing fleet is crucial and that concentrating solely on electric vehicles will not be enough. Even if electric cars reach a 30% market share - they currently account for 15.6% in the European Union and 17.4% across the continent - that would represent only 4.5 million cars a year, compared with more than 250 million vehicles currently on Europe's roads.

With the average vehicle age above 12 years, and 150 million cars more than a decade old, the Stellantis executive warned that at the current pace of transition, “the fleet would continue to age by one month every year”, reinforcing the urgency of renewal.

Incentivising replacement vehicles

By encouraging motorists to exchange older vehicles for new or nearly new cars, while awarding carbon credits in return, Jean-Philippe Imparato says that “in this way, manufacturers could meet their CO₂ targets without having to incur fines or rely on state subsidies”.

A compact car category below €15,000

The second proposal calls for a new approval category for compact vehicles in the European market, measuring less than 3.5 m in length - modelled on Japan's kei cars - with less stringent safety rules to ensure retail prices below €15,000.

This proposed category, intended to bring cars priced below €15,000 back to the market, could cover petrol or electric models - a price point that is almost non-existent in today's European market. It draws inspiration from Japanese kei cars, which are restricted by dimensions, engine size and power, as well as Brazil's “Popular Car” scheme, for vehicles with engines up to 1,000 cm³ and 90 hp.

The figures cited by Imparato illustrate the situation: in 2018, 49 models priced at up to €15,000 were sold in Europe, whereas almost none remain today: “(In 2018) one million cars were sold in Europe for less than €15,000; today we are at 90,000 units”.

He argues that the category he is proposing could revive the city-car segment, where sales have fallen year after year. In 2024, they declined by 22%, with 545,000 units sold (Source: Dataforce).

Yesterday, European Commission President Ursula Von der Leyen also addressed the matter in her State of the European Union speech, proposing the Small Affordable Cars Initiative. This aligns with the position supported by Stellantis and the Renault Group: