CO2 emissions: VW "pools" with SAIC and Ford - FCA with Tesla

As early as 2019, FCA formed a pool with Tesla: since FCA had no chance of meeting the CO2 targets primarily in the USA, they secured CO2 credits from Tesla to make up the difference. Through this “pooling,” all manufacturers involved in this “pool” are then below the legal CO2 limits. However, this costs the CO2 offenders money, but still less than what they would have to pay in fines: Thus, the pooling with Tesla cost FCA 1.8 billion euros – money that helped turn Elon Musk’s balance sheets to positive already by the end of 2019. All European CO2 pools must be declared by the end of 2020. It could be possible that more “pools” will form here by the end of the year.

The Volkswagen Group is also now entering such a CO2 pool and is apparently doing so with the SAIC brands MG Motor and SAIC Motors Europe. This also applies to light commercial vehicles, and there is supposed to be a second pool with Ford. This could indicate that the VW Group cannot quite fall below the threshold of 95 grams of CO2 per kilometer in average fleet consumption in 2020 on its own. It has not yet been announced whether and how much money the Wolfsburg-based company will have to pay its partners, especially since MG Motor sells significant quantities only in the ex-home market UK in Europe and does not yet serve many markets in Europe.  

As can be seen from a new document from the EU Commission, a corresponding CO2 pool was also formed here. Also mentioned in the document is the Geely subsidiary LEVC, which builds the London taxis and soon the van VN 5.

The second VW pool includes Ford-Werke GmbH as “pool manager.” In addition to Volkswagen AG, the Ford Motor Company, the Ford Motor Company Australia, and CNG Technik GmbH, a Ford subsidiary, are part of the pool.

This fits with the rumor of the planned sale of Bugatti to the Croatian electric vehicle manufacturer Rimac. To retain control from VW’s perspective, Porsche intends to increase its Rimac stake from 15.5 percent to 49 percent. Rimac has an electric hypersport car platform on which a new purely electric Bugatti could be built relatively quickly and cheaply. With the sale of Bugatti, VW could quickly shed a lot of CO2.

In the meantime, a third pool for light commercial vehicles has been registered. Currently, it consists only of Renault – the French have indicated their willingness to include other companies in the pool. The deadline for this at Renault is November 18, 2020. A potential interested party could be alliance partner Daimler, in case they do not meet their CO2 targets for 2020.

What does this mean?

Basically, the creation of pools is window dressing: This way, companies that cannot meet the long-announced CO2 targets can essentially "buy themselves out" by forming a pool with other companies that easily stay within the CO2 limits. This naturally favors manufacturers that primarily produce purely electric cars like Tesla.