Automakers such as Stellantis, Toyota, and Ford are turning to EV leaders Tesla and Polestar to pool CO₂ emissions credits, a strategy to meet the EU’s stringent 2025 carbon emissions regulations and avoid billions in fines.

The EU’s emissions rules, aimed at reducing greenhouse gas emissions, require automakers to maintain fleet-wide emissions below specified limits. Non-compliance could result in penalties totaling an estimated €15 billion across the industry. To mitigate these costs, automakers are leveraging carbon credit pooling—a system that allows them to offset their emissions by partnering with EV manufacturers that generate surplus credits.

Key Partnerships:

Tesla-led Pool: Includes automakers such as Stellantis, Toyota, Ford, Mazda, and Subaru.
Mercedes-led Pool: Features Polestar, Volvo, and Smart as key contributors, selling surplus credits to Mercedes.

“Polestar, Volvo, and Smart will sell surplus credits to Mercedes,” confirmed a Polestar spokesperson. Stellantis also acknowledged its participation, highlighting the strategy as resource-efficient for meeting EU targets.

High Stakes and Resistance:

Renault CEO Luca De Meo has flagged the significant financial impact of the upcoming regulations, estimating costs at €15 billion. Meanwhile, the European Auto Lobby (ACEA) and governments like Italy are advocating for a suspension or revision of the penalties.

As automakers face mounting pressure to accelerate the transition to cleaner fleets, partnerships with EV manufacturers provide a short-term lifeline while emphasizing the importance of scaling up electric vehicle production to meet long-term sustainability goals.