According to UBS Group analysts, Tesla (TSLA, Financial) might get over €1 billion ($1 billion) in payments from manufacturers trying to satisfy tougher European Union emissions rules this year.
According to an EU paper, the corporation intends to pool its fleet of electric vehicles with at least five other manufacturers—including Toyota, Stellantis, and Ford. Carmakers can offset their carbon dioxide emissions by pooling; those above limitations pay companies like Tesla, which exceeds compliance criteria.
"If Tesla monetizes its whole long CO2 position, its compensation could surpass €1 billion," UBS analysts under Patrick Hummel said. Hummel calculated earlier that Volvo, pooling with Mercedes-Benz, might make up to €300 million. As plug-in car registrations declined last year in markets like Germany after subsidy cuts, EU manufacturers find increasing pressure.
Companies have to choose now whether to pay fines, cut output, work with Tesla or China's BYD to reach goals. Until February 5, Tesla will welcome more pool participants; candidates must sign non-disclosure agreements and supply emissions data for compliance evaluation.
