Jaguar Land Rover to remain in Tesla deal on EU emissions targets
British firm initially joined Tesla's 'pool' last year to share CO2 fleet emissions targets in a move that could help it avoid fines
Jaguar Land Rover (JLR) will remain in Tesla's manufacturer pool for European Union CO2 emissions for 2022, a move that's likely designed to help the firm avoid paying fines for missing its targets.
Under EU rules, car firms are required to achieve increasingly tough average CO2 emissions targets for their car fleets. Any that misses its target faces a heavy fine of €95 (£77) per vehicle per g/km.
However, the EU does allow car firms to combine their fleets into pools, which it then counts as a single entity when determining average CO2 emissions. That has led to a number of deals with firms set to miss their fleet targets paying manufacturers with low emissions to join a pool.
Last year, JLR joined Honda in a pool formed by Tesla, and will again stay part of it this year – a move confirmed on the European Commission website, having been initially reported by industry analyst Matthias Schmidt.
With Tesla’s fleet entirely electric and therefore emissions-free, the move will likely help JLR to avoid potential fines for missing its targets. The financial terms of the deal are also unknown.
Schmidt reported that JLR's only pure-electric vehicle, the Jaguar I-Pace, is struggling to meet its derogated target of 131.8g/km. Land Rover's first EV will launch in 2024, Autocar previously reported.
It is possible that the impact of the global semiconductor shortage on JLR's production and sales mix could have impacted any aim to hit targets.
JLR wouldn't be the first firm to pay substantial sums of money to Tesla for help in hitting emissions targets. As well as Honda, Fiat Chrysler Automobiles was part of Tesla’s EU pool until the first half of 2021, while the EV firm has done similar deals with firms in the US. In 2018, Tesla made £164 million by selling such credits to rivals.
Other car firms have also benefitted from similar deals. Ford had to forge a deal with Volvo in 2020 to create a pool to avoid EU fines after delays in production of the Kuga plug-in hybrid, while last year's Volkswagen Group’s pool includes MG and its Chinese parent firm SAIC.