As the global climate change problem is getting more and more serious, the European Union continues to enhance its environmental protection policies. According to the latest EU documents, traditional car companies such as Strandis, Toyota and Ford are working with Tesla to set up an emissions pool, while Mercedes has also set up another emissions alliance with Polaris, Volvo and Smart to cope with the stricter carbon emissions standards in 2025. This model of cross-brand cooperation marks a new stage in environmental governance in the automotive industry.

Emissions Pool Mechanism Creates a New Path to Environmental Compliance for Automotive Enterprises

The EU has set a target of reducing average CO2 emissions from new cars to 95 grams per kilometer by 2025, a reduction of about 20% compared to the current standard. To help automakers respond more flexibly to this goal, the EU has introduced the Emissions Pooling Mechanism. Through this mechanism, different manufacturers can jointly calculate their emission totals, thus reducing the compliance pressure on individual brands.

This stringent requirement to reduce emissions forces automakers to accelerate the pace of transformation. The introduction of the emissions pool mechanism provides automakers with a flexible compliance pathway. In fact, this is not the first time a similar partnership model has emerged. Back in 2019, Fiat Chrysler had entered into an emissions allowance deal with Tesla, paying hundreds of millions of euros for emissions allowances to avoid huge fines. Today, more car companies are choosing to cooperate with pure electric vehicle companies by establishing strategic alliances to deal with regulatory pressure.

The wave of electrification in Europe is driving deep reforms in car companies

The global electric vehicle market is experiencing unprecedented growth, with sales exceeding the 10 million mark in 2023, accounting for about 15% of the global automotive market share. The electrification transformation of the European market is particularly remarkable, and it is expected that the market share of electric vehicles will exceed 20% by 2025. Behind this rapid growth is a series of supportive policies in the EU. From purchase subsidies to charging infrastructure construction, from technology research and development support to industry chain cultivation, the EU is through a multi-pronged approach to accelerate the green transformation of the automotive industry.

It is worth noting that many countries in Europe have announced fuel vehicle sales ban schedule. For example, Norway plans to take the lead in realizing a complete ban on the sale of fuel vehicles in 2025, while the UK, France and other countries have also put forward the goal of banning the sale of fuel vehicles around 2030. These policy-oriented further promote the traditional car companies to accelerate the pace of electrification transition.

Double pressure on automobile enterprises to accelerate the pace of green transformation

The green transformation of the automotive industry is reshaping the entire industrial ecology. The in-depth cooperation between traditional and new energy vehicle enterprises is not only to meet regulatory requirements, but also an inevitable choice for the sustainable development of the automotive industry. However, the challenges facing the electrification transition cannot be ignored. In terms of battery technology, core indicators such as range and charging speed still need to be broken through; in terms of raw material supply, the supply chain security of key materials such as lithium, nickel and cobalt is of great concern; in terms of infrastructure construction, the coverage of the charging network and the quality of service still need to be improved.

In addition, the carrying capacity of the power grid is also an important factor to consider. With the increase in the number of electric vehicles, the demand for electricity will rise significantly. Many European countries are accelerating the construction of renewable energy to ensure that electric vehicles really realize “zero carbon” travel. For example, Germany is vigorously developing wind and solar power generation, and Denmark plans to build an energy island to provide clean power support for electric vehicles.

Collaborative development of the industry chain to build a green ecosystem in the automobile industry

With the development of the electric vehicle industry, the related green industry chain also ushered in new opportunities. From upstream battery material R&D and production, to midstream vehicle manufacturing, to downstream charging operation and battery recycling, a complete industrial ecology is being formed. Especially in the field of battery recycling, the EU has begun to promote the establishment of a unified recycling system to realize the recycling of battery materials.

The green transformation of the automobile industry is deepening, and the establishment of emission pools is just the beginning, and more innovative cooperation models may emerge in the future. Through the concerted efforts of all links in the industry chain, a new ecology of low-carbon, environmentally friendly and sustainable automobile industry is accelerating, which will not only help to meet the challenge of climate change, but also inject new momentum into the green transformation of the global economy.

Editor's Notes:

The establishment of emission pool alliances between European automakers and pure electric vehicle companies such as Tesla and Polaris reflects the fact that under increasingly stringent environmental regulations, traditional automakers are adopting a more pragmatic transformation strategy. This cross-brand cooperation model not only helps traditional car companies ease short-term compliance pressure, but also reflects the auto industry's innovative thinking in environmental governance. It is worth noting that the formation of the Emission Pool Alliance will promote in-depth collaboration between traditional and new energy vehicle companies, potentially giving rise to more opportunities for technology sharing and resource complementarity. This trend signals that the automotive industry is gradually breaking away from the traditional competitive pattern and developing in a more inclusive and sustainable direction. This is undoubtedly a positive signal for the industry as a whole.