Franco-Italian automaker Stellantis expects to achieve its European carbon dioxide (CO2) emissions targets this year without environmental credits purchased from Tesla, its CEO said in an interview released on Tuesday.
Stellantis was established through the merger of French automaker PSA and Italian automaker FCA, which spent about 2 billion euros ($2.40 billion) to purchase European and U.S. CO2 credits from electric automaker Tesla over the 2019-2021 period.
“With the electrical technology that PSA brought to Stellantis, we will autonomously meet carbon dioxide emission regulations as early as this year,” Stellantis CEO Carlos Tavares said in the interview with French weekly Le Point.
“Thus, we will not need to call on European CO2 credits and FCA will no longer have to pool with Tesla or anyone.”
Tesla has earned credits for exceeding emissions and fuel economy standards and sells them to other companies that fall short.
European regulations need all automakers to cut CO2 emissions for private vehicles to an average of 95 grams per kilometer this year.
A Stellantis spokesman said the company is talking with Tesla regarding the financial implications of the decision to stop the pooling agreement.
“As a result of the combination of Groupe PSA and FCA, Stellantis will be in a position to achieve CO2 targets in Europe for 2021 without open passenger carpooling arrangements with other automakers,” he added.
Tesla’s sales of environmental credits to competing automakers helped it to declare slightly better than expected first-quarter revenue this week.
The next tightening of the regulations in Europe will soon be the subject of proposals from the European Commission. The 2030 target could be reduced to less than 43 grams/km.