Porsche and Xpeng form a new CO2 pool

To meet the EU’s fleet targets, Porsche and its parent company VW are now taking separate paths regarding CO2 emissions: Porsche is leaving VW Group’s CO2 pool and instead establishing a new open CO2 pool with the Chinese electric vehicle manufacturer Xpeng.

As reported several times before, automobile manufacturers can join forces at the EU level to form so-called CO2 pools, thereby virtually combining the otherwise separate fleets of these manufacturers into one large fleet — for EU regulatory purposes and to avoid fines for excessive CO2 emissions. In this way, the CO2 reduction efforts of manufacturers with a high proportion of electric vehicles can be offset against the fleets of those manufacturers that have not yet achieved their CO2 targets on their own.

It is precisely with this CO2 pooling that a notable development is taking place: Porsche will first exit the VW Group’s closed CO2 pool for 2026 and 2027, a pool that previously brought together brands such as Audi, Bentley, Lamborghini, Porsche, Seat, and Skoda. Instead, Porsche is establishing a new open CO2 pool with the Chinese electric vehicle manufacturer Xpeng, for which additional manufacturers can apply by September 5 according to EU documents. This was first noticed by automotive analyst Matthias Schmidt, and it has since been reported by the “Handelsblatt” as well.

This move eases Volkswagen Group’s CO2 balance in terms of fleet targets: Instead of the critical 93.6 grams of CO2 per kilometer (g/km), the group’s average last year was 100 g/km according to its own figures, as reported by Handelsblatt. According to earlier analyses, Volkswagen Group would have had to pay up to 2.2 billion euros in fines if the EU hadn’t “flexibilized” the CO2 fleet targets at the last minute. This means that Volkswagen Group must achieve significantly lower levels than the target in 2026 and 2027 to offset the deficit from 2025 and avoid fines at a later stage as well.

Yet precisely because Porsche is now focusing more on internal combustion engines and plug-in hybrids compared to earlier strategy plans that aimed for a rapid shift to electric vehicles, the VW Group would likely have faced serious difficulties meeting CO2 targets. While last year one in three cars sold by Porsche in Europe was fully electric, two-thirds were either internal combustion engine vehicles or hybrids. In terms of numbers, this means Porsche must offset the relatively high CO2 emissions—around 60,000 new internal combustion engine vehicles—in the EU.

Thus comes the alliance with Xpeng, a company affiliated with the VW group: Volkswagen holds 5 percent of shares in this Chinese firm and is developing electric vehicles for the Chinese market together with it. Conversely, Xpeng is becoming increasingly important in Europe, having just launched its first mass-market model on the continent—the electric SUV coupe L03—with a starting price of 35,600 euros. According to analyst Matthias Schmidt, the company is expected to deliver around 50,000 units in Europe this year. And these are all electric vehicles. Such a volume could effectively offset the CO2 emissions from Porsche’s internal combustion and hybrid vehicles. This is precisely what makes this new CO2 pool so attractive to Porsche and the VW group.

There is no detailed explanation from either Zuffenhausen or Wolfsburg regarding why this is the case. However, Porsche has at least confirmed the CO2 pooling arrangement with Xpeng to Handelsblatt: this creates “flexibility in the transition to electrification” but does not change Porsche’s long-term strategy. “We continue to invest in transforming our company, electrifying our vehicles, and developing innovative technologies to sustainably reduce our emissions on our own,” said a company spokesperson.