VW pools emissions with 3 more EV makers to avoid EU fines

Volkswagen Group is pooling with three more electric-car makers to help it meet stringent new CO2 emissions reduction targets in the European Union.

Aiways, LEVC and Next E.Go Mobile are now part of a CO2 pool that helps VW reduce any penalty payments it faces from the EU for infringing emissions limits for its new-car fleet.

VW already has a similar arrangement with Geely-owned UK brand MG Motor, which is owned by VW's Chinese joint-venture partner SAIC.

"Three more partners joined the pool in December," a VW spokesperson told Automobilwoche, a German language sister publication of Automotive News Europe.

He said that the expansion would help to lower VW's 2020 emissions total but did not say by how much the company's fleet average will drop as a result.

Shanghai-based Aiways is expanding into Europe. UK-based London Electric Vehicle Co. ( LEVC), owned by China's Zhejiang Geely Holding, is expanding sales of hybrid taxicabs and electric vans in Europe. Next e.GO Mobile plans to start production of a small electric car in Germany this year.

EU rules which took effect in 2020 force automakers to reduce the average fleet emissions of new cars sold in the bloc to 95 g/km or face hefty fines. Some automakers including VW and Fiat Chrysler Automobiles are aiming to meet the targets with pooling deals allowed by the EU to offset emissions.

FCA has pooled with Tesla in an agreement that could help the automaker avoid big fines.

VW is not expected to reach its 2020 emissions target despite its new pool partners.

"We currently continue to expect that we will miss the 2020 target slightly, by less than one gram," the VW spokesman said. VW expects to reach its EU target this year, he said.

The VW pool will initially run until 2022, and the automaker declined to comment on the specific agreements with the new partners such as how much the EV makers will receive in compensation payments.

"The participation of additional electric car manufacturers in Volkswagen's pool is primarily a security measure for 2021," said Matthias Schmidt, who runs Schmidt Automotive Research in Berlin.

Schmidt expects VW will still need the support of pool members in 2021 to get through the coming year without fines.

"For 2020, this expansion of the pool is not really worthwhile, but for 2021 it could become significant," he told Automobilwoche.

After that, VW will likely not need support to meet the targets in 2022 as it rolls out more electrified vehicles, and may even be in the position to offer support to other automakers, Schmidt said.

Automotive News Europe contributed to this report