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Europe needs less regulation and a better industrial strategy to sustain car manufacturing in the face of the “very clear direction” set by Donald Trump’s administration and growing Chinese competition, the chiefs of Stellantis and Renault have warned.
“Europe needs to decide what it wants to do in terms of its industrial policy,” Stellantis chair John Elkann told the FT’s Future of the Car summit on Thursday. “Does it want to be a [bloc] that builds cars or [one that] buys cars? That’s a decision that the political forces need to make.”
In a joint interview with Renault chief executive Luca de Meo, Elkann added that the Trump administration had been more effective in setting out a policy to boost car manufacturing despite the chaotic implementation of his tariffs.
“President Trump is very clear in what he wants to achieve for the car industry,” said Elkann. “The intentions are clear, but more importantly, the actions are being put in place that are going to make that possible.”
De Meo said the car industry faced more than 100 regulations in the EU from now to 2030, raising the costs to meet them and making it harder to build small cars profitably.
“We need to talk strategy rather than regulation,” he said. “We need to be able to cope with the new competition that is coming, not only from China but in general.”
The comments come as Stellantis and other global carmakers have rushed to respond to Trump’s evolving tariff policy and disruptions to supply chains. Meanwhile, European companies face sluggish vehicle demand at home and the influx of more affordable Chinese vehicles into the continent.
Shares in Stellantis, which is particularly exposed to potential new trade barriers between the US and Canada and Mexico have dropped 24 per cent this year on the back of tariff threats. But Elkann stressed that the objective of Trump’s policy to increase manufacturing in the US had been consistent.
Europe aims to phase out new sales of combustion engines by 2035. But it has recently offered carmakers relief to meet stricter emissions targets due to come into force at the end of 2025.
However, Elkann and De Meo called for a more supportive policy environment, especially for small cars. The pair have said that current legislation is focused on larger vehicles and adds requirements that make building smaller cars less profitable.
Saying that the bloc should lower the legislative burden on companies and have a greater impact analysis of policies to phase out combustion engines, De Meo added: “We want packages of regulation so that they don’t come every three months because it’s keeping everybody busy.”
Elkann added: “If we have less regulations, we can make sure that we build cars that are less expensive and so they’ll be more affordable.”
