As Europe's emissions targets tighten significantly this year, major automakers are forming alliances to purchase emissions credits. The new corporate average target has been set at 93.6 grams of CO2 per kilometer, down from over 100 grams in previous years.
According to documentation obtained by Reuters, a coalition led by Tesla includes companies such as Toyota, Ford, Subaru, and Mazda. Additionally, Stellantis and its partner LeapMotor are expected to join this group.
On the Volvo side, which includes Polestar, Mercedes-Benz and Smart are also forming a coalition. Companies like Volkswagen Group, Hyundai Motor Group, SAIC, Honda, BMW, Suzuki, and the Renault-Nissan-Mitsubishi Alliance have yet to decide on their alliances.
The penalties for exceeding the new Euro 7 emissions targets are substantial, with fines amounting to €95 for each gram of CO2 per kilometer over the limit for every vehicle sold. This could lead to costs running into hundreds of millions or even billions for major automakers.
In light of these challenges, some manufacturers are considering reducing production of internal combustion vehicles or increasing EV production, though the latter has faced obstacles due to a slowdown in EV adoption. The European Automobile Manufacturers' Association (ACEA) has estimated potential losses of €16 billion ($16.5 billion) due to these stricter regulations.