Developing a new car for the European market has become a daunting task — not because of innovation demands, but due to the overwhelming pressure of regulatory compliance. As the European Union tightens its grip with ever-stricter rules on emissions, safety, and noise, automakers are warning that excessive bureaucracy is threatening not just vehicle affordability, but also the future of sustainable mobility.
John Elkann, Chairman of automotive giant Stellantis and also of Ferrari, revealed to Automotive News Europe that over a quarter of an engineer’s time at Stellantis is now spent solely on making vehicles compliant with EU rules. “If you look at our engineers, more than 25 percent just work on compliance, so no value is added,” Elkann stated, highlighting the mounting cost — both in labor and innovation.
The burden is only expected to increase. By 2030, cars in Europe will be required to emit an average of just 49.5 grams of CO₂ per kilometer — nearly half the target for 2025–2029. From 2035 onward, new vehicles emitting any harmful substances will be outright banned, marking a total phase-out of combustion engines.
While this legislation aims to steer Europe toward a greener future, it’s also pushing many vehicles — particularly smaller, more affordable ones — off the roads. Rising costs have forced automakers like the Volkswagen Group to discontinue compact city cars such as the VW up!, Skoda Citigo, and SEAT Mii. In 2019, over one million vehicles priced below €15,000 were sold in Europe. Today, that number has shrunk to a mere 100,000.
Elkann sees a solution in looking east — to Japan. He’s advocating for a European version of the Japanese kei car, a class of ultra-compact, lightweight vehicles that make up about 40% of Japan’s market. “There’s no reason why if Japan has a kei car… Europe should not have an E-Car,” he argued.
Former Renault CEO Luca de Meo echoed the sentiment, criticizing the current trend of oversized electric SUVs. “Driving around every day in an electric vehicle weighing 2.5 tons is clearly an environmental nonsense,” he noted earlier this year.
Despite the growing dominance of crossovers, some brands are succeeding with smaller offerings. Dacia, Renault’s no-frills budget brand, has carved out a 5.1% market share in the EU this year, thanks in large part to the lightweight and affordable Sandero. Even its SUVs remain relatively light, with the Bigster maxing out at just 1,400 kilograms.
The core dilemma is clear: in trying to build the greenest cars, regulators may be steering the market toward heavier, pricier models, inadvertently sidelining the very goal of reducing emissions. For many consumers, the choice will become either unaffordable electrics or keeping older, polluting vehicles longer — the opposite of what EU policy intends.
As calls grow for a more flexible, tiered approach to regulation — particularly one that fosters small, efficient urban vehicles — the question remains: will European lawmakers loosen the rulebook to make room for an “E-Car”? Or will red tape continue to strangle innovation and affordability in the name of progress?
If the future of European mobility is to be both green and accessible, something has to give.
Source: Automotive News Europe