Pomigliano d'ArcoStellantis commits to affordable EVs from Italy.
China captured Europe’s affordable EV market while local makers chased premium models; EU rules require 90% electric by 2035.
Stellantis is also exploring deals to sell underused European factories to Chinese automakers.
Sources: Yahoo Autos
THE PREMIUM TRAP
European automakers spent the 2010s chasing margin upward — SUVs, luxury trims, performance EVs — because each unit earned more. The bottom of the market was abandoned as unprofitable. Chinese makers walked into an empty room.
WHY CHINA WON THE LOW END
China's EV cost advantage is not subsidy alone — it is vertical integration. CATL and BYD make their own cells; BYD makes its own chips and motors. A European maker buying a battery pack from a Korean supplier starts the price race already losing.
THE 2035 MANDATE
The EU's 2035 rule does not ban combustion engines outright — it requires new cars sold to emit zero CO2 at the tailpipe. The mandate sets the destination; it does not pick the winner between European and Chinese suppliers of the cars that meet it.
POMIGLIANO AND ITALY'S AUTO ATROPHY
Italian car production peaked near 2 million units in 1989 and fell below 500,000 by 2024 — a four-fold collapse. Pomigliano, once Alfa Romeo's flagship plant, became a symbol of capacity sitting idle while Stellantis built Fiats in Morocco and Serbia.
SELLING THE FACTORIES
When a Western automaker sells an underused plant to a Chinese rival, it converts a fixed cost into cash but trades away its industrial base. The 1980s Japanese transplants in Tennessee and Ohio became permanent — once a foreign maker owns the line, the local supplier ecosystem reorients around it.
THE TARIFF PATCH
In late 2024 the EU imposed countervailing duties of up to 35% on Chinese-built EVs, citing state subsidies. Tariffs buy time but do not fix the cost gap; Chinese makers responded by accelerating European factory plans — BYD in Hungary, Chery in Spain — to manufacture inside the wall.