Tesla and Chinese manufacturers could collect billions of EU emission rules

While European car manufacturers are preparing for a possible trade war waged by President Trump, they endeavor to postpone another threat to their domestic lawn: the prospect of paying hundreds of millions of dollars in Tesla and Chinese competitors who muscrate their main markets.

As part of the more strict European Union regulations which take effect this year, car manufacturers who sell cars in Europe are faced with heavy penalties if their production of vehicle does not meet difficult objectives to reduce carbon carbon emissions . With the demand of electric cars in Europe that collapses and manufacturers tightened by competition from China, car manufacturers, politicians and industrial groups lobby for reliefs.

After an industry summit in Brussels on Thursday, Ursula von der Leyen, president of the European Commission, the executive power of the European Union, recognized the challenges that the automotive industry has been confronted and promised that regulators ” act quickly ”to raise them.

Under the rules, car manufacturers can achieve their objectives by increasing the number of zero emission cars that they produce or reducing their production of vehicles with combustion engines.

There is another option: they can buy emission credits by “grouping together” with companies that only make electric cars and have an abundance of credits. In a turn of spell, European car manufacturers are turning to some of their largest rivals, including Tesla and Geely in China, which has Volvo Cars and has controlling participation in the manufacturer of Polestar electric vehicles.

The strategy of purchasing emission credits is not new, but it recently sparked alarms in France and Germany, which houses the largest automobile manufacturers in Europe, because it comes when the demand for electric cars ‘softened, causing threats of factory closings and the loss of thousands of people from jobs. Add to concerns in Europe is Elon Musk, the director general of Tesla, who criticized EU prices on electric vehicles made in China and was accused of having interfered in politics in Great Britain and Germany.