Green Transition in the Automotive Industry Strategies of Stellantis with focus on Alfa Romeo under EU CO2 Regulations

The European Union has placed the automotive sector at the heart of its climate strategy: the Green Deal and the Fit for 55 package require a 55% reduction in CO₂ emissions by 2030 and climate neutrality by 2050, with a registration ban of internal combustion engines from 2035. In 2025, the EU Parliament also introduced a three-year average (2025-27) that offers flexibility in meeting the targets imposed but does not mitigate their severity. ??This paper examines how Alfa Romeo intends to comply with this regulatory framework on the Italian market. After retracing Biscione's history, the product portfolio choices are analysed: the electrification shift begins in 2022 with the launch of the C-SUV Tonale, continuing in 2024 with the launch of the B-SUV Junior. At the same time, all high-performance versions of the Giulia and Stelvio Quadrifoglio models were withdrawn from the market in 2025. The Stellantis plan also provides the total electrification of the Alfa Romeo range by 2027. To offset CO₂ surpluses, the holding company uses credit pooling with carbon-negative OEMs such as Tesla, with the aim of reducing penalties and financing the development of multi-energy platforms. On the demand side, the Dataforce 2019-24 analysis shows an unstable Italian market: after the pandemic slump (-27% in 2020), registrations rose to 1.76 million in 2023, driven by hybrids and PHEVs. The B-SUV segment bounced back to 462,000 units, but BEVs remain volatile and dependent on eco-bonuses. ??The survey proposed and developed in the study, aimed at potential Italian customers, confirms the scepticism recorded: 61% of respondents do not believe that BEVs represent the future and 56% do not plan to purchase one within three years. The critical issues identified are: high cost, range anxiety and depreciation. In dealership showrooms, average stock favours Junior MHEVs and penalises Junior BEVs. ??To interpret these dynamics, the study analysed the public economy framework: exhaust gases are negative externalities, while the mix of Pigouvian taxes, cap-and-trade and technological standards aim to realign private and social costs. According to the endogenous growth model, the ETS modifies marginal costs and drives innovation towards zero-emission powertrains, rewarding first movers and penalising laggards with previous ICE assets. ??With the three-year window introduced in 2025, annual shocks are reduced while maintaining the decarbonisation trajectory at 82 g/km in 2030. ??In summary, Stellantis combines investments in modular platforms, pooling agreements and the gradual phase-out of high-emission engines to safeguard profitability. However, BEV adoption in Italy is proceeding more slowly than the 2024 forecast assumptions Without targeted incentives and pervasive infrastructure, the 2035 targets are at risk of slipping. ??In general, consistent carbon-price-based regulation, modulated tax incentives and investment in the charging network are necessary conditions for environmental benefits to coincide with the economic sustainability of car manufacturers and their brand identity. A brand such as Alfa Romeo, however, should preserve its sporting DNA, the Meccanica delle Emozioni: orienting medium-term plan production towards models equipped with MHEV and ICE engines.