ROME (Reuters) -Stellantis may have to close factories due to the risk of hefty European Union fines for not complying with CO2 emission targets, the head of the Franco-Italian automaker for Europe said on Tuesday.

European car manufacturers have to sell more electric vehicles to cut CO2 emissions or risk penalties as part of the bloc's efforts to limit the catastrophic effects of climate change. The automaker industry has successfully lobbied for more time to comply, as fines will be based on 2025-2027 emissions rather than just in 2025.  

Stellantis' Europe chief Jean-Philippe Imparato said the targets were still unreachable for automakers, and exposed his company to fines of up to 2.5 billion euros ($2.95 billion) within "two-three years." 

Speaking at a conference in the lower house of parliament in Rome, he said that without significant changes in the regulatory situation by the end of this year, "we will have to make tough decisions."

This is because Stellantis would either have to double its electric vehicle sales, which is impossible, or cut the production of petrol and diesel vehicles, Imparato said, so as to improve the energy mix of its fleet in favour of electric.

"I have two solutions: either I push like hell (on electric) ... or I close down ICE (internal combustion engine vehicles). And therefore I close down factories," he said, at one point mentioning the Italian van-making plant of Atessa.

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