Automakers Collaborate with Tesla and Polestar to Meet EU 2025 CO2 Emission Targets

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Automakers including Stellantis, Toyota, Ford, Mazda, and Subaru are planning to pool their CO2 emissions with Tesla to meet the European Union's stringent CO2 emission regulations for 2025. This collaboration involves sharing emissions data to achieve a combined average that complies with the EU's targets. The EU's regulations for 2025 require passenger cars to emit an average of 93.6 grams of CO2 per kilometer (g/km) and vans to emit 153.9 g/km. These targets represent a 15% reduction from the 2021 baseline.

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The pooling strategy allows these automakers to leverage Tesla's relatively low emissions profile, given its focus on electric vehicles, to balance out the higher emissions from their own internal combustion engine (ICE) vehicles. This approach helps them avoid significant fines, which can reach €95 per gram of CO2 per kilometer for each new vehicle registered that exceeds the emissions target.

In addition to Tesla, other automakers like Volvo, Polestar, and Smart are planning to pool their emissions with Mercedes to meet the same regulations. This pooling effort is part of a broader strategy to comply with the EU's regulations without having to drastically cut production or face hefty penalties.

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The EU's CO2 emission targets are designed to push the automotive industry towards greater electrification and lower emissions. However, the industry is facing challenges such as low consumer demand for electric vehicles (EVs) and high energy costs, which complicate compliance efforts. The European Automobile Manufacturers' Association (ACEA) has even called for a two-year delay in the implementation of the 2025 targets, citing these difficulties.

Despite these challenges, the overall trend indicates a growing shift towards electrification. Global electric vehicle sales are projected to increase significantly in 2025, with Central and Western Europe expected to have a notable increase in EV market share. This shift is crucial for meeting the EU's long-term goal of phasing out new combustion-engine vehicles by 2035.