Automakers are racing to meet the European Union’s stringent 2025 emission standards by pooling carbon credits with electric vehicle leaders Tesla and Mercedes-Benz, as revealed in recent EU filings.
Under EU regulations, automakers must reduce fleet emissions to 93.6g of CO2 per kilometer by 2025, down from 106.6g in 2023. To avoid hefty fines, companies with lower electric vehicle (EV) sales can “pool” emissions with segment leaders by purchasing carbon credits from manufacturers like Tesla and Polestar.
Tesla and Stellantis Create “Super Pool”
A significant pool is forming around Tesla, with Stellantis, Toyota, Ford, Subaru, Mazda, and Leapmotor joining forces. This “super pool” could cover up to one-third of the European market. Tesla’s 100% EV sales allow it to sell surplus carbon credits, contributing nearly 3% of its $72 billion revenue last year.
Mercedes-Benz Pools with Polestar and Volvo
Meanwhile, Mercedes-Benz is creating a separate pool with Polestar, Volvo, and Smart. Mercedes, previously facing up to $1 billion in fines, expects this collaboration to help meet its EU targets. Volvo has stated it will have a significant CO2 surplus this year and continues to reduce emissions globally.
Financial Stakes and Industry Pushback
Renault CEO Luca De Meo has warned that EU 2025 regulations could cost European automakers over €15 billion in fines. ACEA, the European auto lobby, and some governments, including Italy, have called for relief, but the EU remains firm on the targets.
Looking Ahead
While Tesla and Mercedes pools provide a compliance path, companies like Volkswagen, BMW, and Hyundai have yet to announce their strategies. The EU’s firm stance signals continued pressure on automakers to accelerate EV adoption or face financial penalties.
