The lucrative European CO₂ pool centered around Tesla is losing two of its most significant financial contributors.
According to reports based on newly released EU regulatory documents, both Toyota and Stellantis have officially withdrawn from the Tesla CO₂ pool for 2026.
Tesla receives about $2 billion in annual revenue thanks to emissions credits from these CO₂ pools. While most of that revenue comes from the U.S., Europe still accounts for a significant share of Tesla's emissions credits.
The Mechanics of Pooling
At the European Union level, automakers are permitted to join CO₂ pools to combine their separate vehicle fleets into a single entity for regulatory purposes. This system allows companies with a high proportion of battery-electric vehicles, such as Tesla, to offset the emissions of manufacturers that fall short of their strict CO₂ reduction targets.
To participate, high-emission automakers pay the zero-emission manufacturers to join their pool. While the payments can be substantial, they are typically much lower than the severe penalties the EU imposes for missing emission targets.
Tesla’s remaining EU pooling partners for 2026 include Ford, Honda, Mazda, and Suzuki.
Toyota Walks Away
Without official statements from either Toyota or Stellantis, their exact motivations remain unconfirmed, but we can make fairly clear predictions about their next moves.
Toyota’s European division likely believes it can finally meet its CO₂ targets independently. Preliminary calculations for 2025 suggest the automaker will hit its mandated target of 96.3 grams per kilometre. Toyota has maintained a massive proportion of highly efficient hybrid vehicles in its European fleet for years, gradually weeding out high-emission models.
Stellantis Pivots to Leapmotor
The situation for Stellantis is slightly different. Forecasts show that Stellantis missed its 2025 CO₂ target by just over six grams per kilometre. However, rather than paying Tesla to offset this deficit, Stellantis is expected to form an internal pool with its Chinese EV partner, Leapmotor.
Leapmotor produces almost exclusively battery-electric vehicles, generating a massive surplus of CO₂ credits. By pooling with its own subsidiary, Stellantis can keep its regulatory compliance spending in-house. To further protect this strategy from European tariffs on Chinese imports, Stellantis is preparing to begin local production of the Leapmotor T03 at a plant in Spain later this year.
Financial Impact For Tesla
Losing two massive legacy automakers from the European pool will undoubtedly cut into Tesla’s regulatory credit revenue for 2026. However, Tesla executives have repeatedly warned investors during recent financial reports that CO₂-related income would eventually decline as the industry transitioned to electric vehicles.
Interestingly, under EU rules, CO₂ pools do not have to be legally finalized until December 1st of the current year. If Toyota or Stellantis suffer unexpected setbacks in their 2026 EV or hybrid sales, they still have time to monitor the market and potentially buy their way back into the Tesla pool before the end of the year.
