Introduction
Stellantis (NYSE: STLA) has confirmed that it will continue purchasing CO2 credits from Tesla (NASDAQ: TSLA) in 2025 to meet the European Union’s strict emissions reduction targets. Despite a regulatory change allowing automakers to comply with emissions limits over a three-year period (2025-2027) instead of just 2025, Stellantis’ European chief Jean-Philippe Imparato stated that the company will still rely on Tesla’s carbon credit pool.
Why Stellantis is Buying Tesla’s Carbon Credits
1. EU’s Stricter Emission Regulations
European carmakers must reduce their CO2 emissions or face hefty fines.
Firms that lag in EV adoption buy credits from companies like Tesla and Polestar (NASDAQ: PSNY), which have a strong zero-emission vehicle (ZEV) portfolio.
Stellantis currently has a 14% EV sales mix, short of the EU’s 21% target.
2. Regulatory Change: A Temporary Relief, Not a Solution
The European Commission recently granted a 2025-2027 grace period for compliance.
Despite this, Stellantis is still opting to buy credits, highlighting that its EV production ramp-up remains a challenge.
3. Tesla’s Lucrative Carbon Credit Business
Tesla generates billions of dollars by selling regulatory credits to legacy automakers.
This revenue stream offsets production costs and supports further EV expansion.
Polestar (PSNY) is also participating in this emissions credit market.
Impact on Stellantis, Tesla, and the Auto Industry
Stellantis: Gains compliance flexibility but faces pressure to accelerate EV adoption.
Tesla: Continues benefiting from a strong revenue stream beyond car sales.
Auto Industry: European manufacturers may still struggle to meet emission targets, increasing reliance on EV leaders like Tesla.
Tracking Auto Industry CO2 Compliance
For insights into how carmakers are handling emissions and EV adoption, check:
Individual Industry Classification APIGet insights into automakers’ industry positioning and environmental strategies.
Company Rating APIAssess the financial and ESG performance of Tesla, Stellantis, and others.
Conclusion
Stellantis’ continued purchase of Tesla’s carbon credits underscores the challenges traditional automakers face in meeting EV targets. While the EU’s regulatory extension provides a short-term buffer, the long-term solution remains scaling up EV production.
