Porsche and Xpeng create a new CO₂ emissions pool

Porsche’s CO₂ emissions will no longer be calculated as part of the Volkswagen Group. Instead, the German manufacturer will create a new emissions pool with China’s Xpeng, a move that could benefit both Porsche and, somewhat unexpectedly, the Volkswagen Group itself.

The change appears in European Union documentation dated 5 August and will apply in 2026 and 2027. Porsche will manage the new pool, which will remain open to other manufacturers joining at a later stage.

To understand why a Volkswagen Group brand now wants to combine its figures with Xpeng, it is necessary to consider what is at stake: European CO₂ emissions targets.

Porsche was making the calculations harder

Until now, CO₂ emissions from Porsche cars sold in the European Union were counted alongside those of the Volkswagen Group’s other brands. According to Transport & Environment projections, the German group was close to meeting the European targets through to 2027.

In 2025, for instance, the Volkswagen Group recorded an average of roughly 100 g/km of CO₂. The European benchmark for passenger cars is 93.6 g/km, although every manufacturer has its own specific target. As compliance is now assessed using the average for 2025, 2026 and 2027, the group must make up for its 2025 result over the next two years.

This is where removing Porsche from the equation could make a significant difference. The car maker is attempting to recover after a very difficult 2025, but the available 2026 figures are not especially encouraging. This is particularly true of European EV sales, which are vital to bringing down its average emissions and are still declining.

During the first half of 2026, Taycan sales fell by around 20%, while Macan Electric sales dropped by approximately 30%. With fewer electric cars offsetting the emissions of combustion-engined models, Porsche makes it harder to reduce the pool’s average. Its departure will therefore stop it from pushing the Volkswagen Group’s figures upwards.

What does Porsche gain from the Xpeng emissions pool?

On the other side of the calculation is Xpeng, which currently sells only fully electric cars in Europe. Its models therefore enter these calculations with zero CO₂ emissions, helping to lower the average of the new pool.

That situation will change with the arrival of the range-extender version of the new L03, which combines electric propulsion with a combustion engine used as a generator. Even so, Xpeng’s line-up will continue to have a far higher proportion of electric vehicles than Porsche’s.

That difference makes it possible to offset Porsche’s higher emissions. In return, Xpeng is expected to receive financial compensation, although the terms of such agreements are not made public.

This is not a new strategy. So-called emissions pools allow different manufacturers to be treated as a single entity for the purposes of complying with European targets.

For 2026, for example, there is a Tesla-led pool that includes Ford, Honda, Mazda and Suzuki. Mercedes-Benz, Volvo, Polestar and Smart make up another. Such agreements have become particularly valuable for all-electric manufacturers, or those with a strong EV presence, as they can turn their lower emissions into an additional source of revenue.

Why is 2027 so important for CO₂ emissions targets?

The current European targets require a 15% reduction in average emissions compared with 2021 levels. For passenger cars, the European benchmark between 2025 and 2029 is 93.6 g/km of CO₂, although each manufacturer has an individual target.

These targets were initially intended to be met annually. However, after electric car sales grew more slowly than expected and following intense industry pressure, the European Union introduced a degree of flexibility in 2025: compliance is now assessed by averaging the results from 2025, 2026 and 2027.

In practical terms, exceeding the target in one of those years does not automatically result in a fine, provided that excess is offset in the remaining years. The overall requirement has not been lowered; it can simply be met over a three-year period.

The penalties remain severe. At the end of the period, every manufacturer above its target must pay €95 for every excess g/km and for every car registered.

For a group selling millions of cars each year, even a relatively small difference can produce a bill worth hundreds of millions of euros. In the Volkswagen Group’s case, chief financial officer Arno Antlitz had already warned that failing to meet the 2025-2027 targets could lead to a total bill of around €1.5 billion.