Jaguar has reached an agreement with Tesla to try to avoid fines in the European Union

Huge fines in the European Union will change the face of the car market. The historic Jaguar brand will now partner with Tesla, but not in the development of electric cars.

Manufacturer’s photo

The European Union applies strict environmental safety standards and has imposed fines on car manufacturers whose products exceed their pollution targets. The fines are, in fact, huge, at EUR 95 for every extra gram of carbon per kilometer. And no, this is not a fine for the model – manufacturers will have to pay such money for every car sold. Clearly, the average emissions of cars sold are calculated, so one very clean car can offset one dirty one.

The Jaguar is electrifying – the I-Pace is actually popular enough. But much of the Jaguar model range is fast and loud roaring cars. So what will a historic British brand do? It will join Tesla’s emissions bubble, where Honda already exists.

There are no petrol or diesel cars in the Tesla model range, so the company sells so-called emission credits. Jaguar (or JLR Corporation as a whole) is not the first customer. Fiat Chrysler Automobiles has terminated a similar agreement with Tesla a little earlier. Tesla also sells emission credits to competitors in the United States. Thus, in 2018, Tesla earned more than $ 225 million from its old-fashioned competitors.

Tesla is not the only electric car manufacturer that can make that money. Volkswagen is in the same bubble with MG and its owner, the Chinese SAIC. We will certainly see even more similar agreements in the future. And then less, because manufacturers are rapidly changing their model range. The Range Rover has traditionally been a fuel-hungry SUV. The latest version just released is a bit cleaner, but in 2024, the Range Rover will also have an electric car version. Maybe then JLR will no longer be a Tesla customer.