Automakers Drop Out of Carbon Credit Pool with Tesla

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Tesla has historically gotten billions of dollars of revenue from regulatory credits, mostly from the US, but also a significant chunk from Europe.

Last year, Tesla “pooled” with Ford, Honda, Mazda, Subaru, Stellantis, and Toyota, among others. Basically, Tesla got paid to help those other automakers meet EU fleet carbon emissions requirements by blending its sales (100% electric, zero emissions) with their sales (expected to not meet regulations without the blending).

Last year, though, the EU watered down its requirements. Instead of having to meet 2025 fleet emissions requirements in 2025, automakers could combine their vehicle sales across the 2025–2027 period to meet them, averaging the numbers across those three years.

This year, some of those automakers are reportedly stepping away from the Tesla-centered pool, based on regulatory filings. Toyota, Stellantis, and Subaru have not pooled with Tesla. They have the option of changing their mind and doing so later in the year, but they clearly don’t feel like they need to at the moment.

Note that Stellantis is in a joint venture with Leapmotor, a Chinese EV company that has seen its sales in Europe grow significantly in the past year.

Overall, as we’ve argued for years, automakers should be able to meet the regulatory emissions requirements if they simply try hard enough, and then they aren’t going to have to resort to paying their competitors for credits. In Europe, where EV sales have become such a high percentage of overall auto sales, it seems especially logical to just jump into the EV transition sooner than later and be on the forefront of the new auto era. Alas, not all companies can be leaders, and the laggards are naturally going to resort to pooling rather than paying bigger fines. That said, it seems some automakers are wising up — or at least benefiting from the EU regulatory change — and looking to give less of its money to Tesla.

We’ll see how this story evolves, and perhaps we’ll get some insight into the actual revenue effect such changes will have on Tesla, but that’s unclear at the moment.