Why Europe’s Carmakers Are Teaming Up With EV Rivals to Dodge Emissions Fines

Europe’s auto giants are doing something that sounds like a twist in a heist film: partnering with their electric‑only competitors to sidestep billion‑euro penalties. On October 21, 2025, Reuters reported that legacy carmakers are forming “pools” with EV brands so their combined fleet emissions meet European Union targets—lowering or avoiding fines that some estimated could have reached up to €15 billion for 2025 alone. The European Commission also softened the immediate blow earlier this year by averaging compliance over 2025–2027, rather than judging 2025 in isolation. Current pooling deals expire at the end of 2025 but are expected to be renewed.

Pooling, in plain English

Think of pooling like a group project where the straight‑A student (an EV‑only brand) agrees—legally—to let everyone average grades, for a fee. Automakers can buy emissions “credits” by partnering with EV specialists, bringing their collective average below the EU’s CO2 ceiling. It’s not a loophole; it’s explicitly allowed under EU rules to keep the transition manageable while factories and buyers catch up.

Who’s teaming up with whom?

Some of the pairings read like unlikely buddy‑cop movies. Nissan joined forces with China’s BYD in October. South Korea’s KG Mobility paired with China’s XPeng in late September. Tesla organized a mega‑pool earlier this year with Stellantis, Toyota, Ford, Leapmotor, Mazda, and Subaru, later welcoming Honda and Suzuki. A separate pool links Mercedes‑Benz with Volvo Cars, Polestar, and Smart—a network with clear ties to China’s Geely. In short, Europe’s emissions math is being solved with cross‑border, cross‑brand teamwork.

Why now? Because the clock is ticking—and the market is in mid‑transition

The EV transition in Europe is real but uneven. Battery‑electric models made up about 12% of European light‑vehicle sales last year and are expected to reach 15% this year. Consultants at AlixPartners see that share accelerating to 24% by 2027 and roughly 40% by 2030. For makers still selling lots of combustion cars in 2025, pooling is a pressure valve: it buys time to ramp up EV output, fix supply chains, and sharpen pricing without swallowing outsized fines.

How this connects to other fresh policy moves

The pooling wave doesn’t happen in a vacuum. Just a day earlier, the EU officially published simplifications to the Carbon Border Adjustment Mechanism (CBAM), including a new 50‑tonne threshold that eases reporting for smaller importers while keeping nearly all covered emissions in scope. Different tool, same direction of travel: Brussels is tightening its climate toolkit across sectors—power, heavy industry, and now, in practice, transport—nudging companies to clean up or pay up.

What it might mean for drivers and prices

For buyers, the immediate effect is subtle. Pooling itself doesn’t change the car on the lot; it changes the cost structure behind it. Some of those credit costs could trickle into sticker prices or lease rates—though competitive pressures (and plentiful EV discounts) may keep that muted. More interesting is what pooling encourages: more cross‑brand tech sharing, faster rollouts of mid‑priced EVs, and potentially speedier upgrades to charging capability and software. If you’re shopping in 2026–2027, you may see a wider spread of competent, reasonably priced EVs because compliance math rewarded companies that moved quickest.

The strategic wrinkle: China’s EV edge meets Europe’s rulebook

Pooling is also a geopolitical chess move. Chinese EV makers like BYD and XPeng gain revenue and brand presence in Europe via these agreements, while legacy brands buy time to localize batteries, secure supply chains, and fine‑tune their own EV lineups. If those lineups hit volume in the next two years, the need to “rent” credits could fade—shifting bargaining power back to Europe’s incumbents. If not, expect deeper partnerships, joint ventures, or even equity ties to keep the math working.

What to watch next

• Renewals and reshuffles: Current pools expire at 2025’s end. Watch who renews with whom—and at what price. Expensive credits are a loud signal that a brand’s EV ramp is behind plan.
• Sales mix vs. fines: If EV share climbs toward the forecast track, credit demand should ease. If not, expect more creative alliances (and perhaps sharper price cuts on EVs to move the needle).
• Policy spillovers: With CBAM tightening and broader EU climate rules evolving, the “carrot and stick” dynamic will intensify—rewarding cleaner lineups and exposing laggards.

Bottom line

Pooling is the auto industry’s short‑term seatbelt: it keeps fines from flying through the windshield while manufacturers steer toward lower‑emission lineups. It’s also a reminder that regulation shapes the race as much as technology does. For everyday drivers, the payoff should be more EV choice, better features, and—if competition does its job—friendlier prices. And if the big brands want to stop paying the class topper for help, they’ll have to become the topper themselves—and fast.