Facing Emission Fines, Ford Becomes Ravenous for Carbon Credits

Matt Posky
by Matt Posky
facing emission fines ford becomes ravenous for carbon credits

Ford is joining the lengthening list of automakers that cannot adhere to European emissions mandates this year and is pursuing the popular option of simply buying carbon credits from rivals who managed to sell more than a few electrified vehicles.

Under the EU rules, manufacturers can “earn” carbon credits by selling more EVs. But legacy automakers were hamstrung all year by the pandemic and Ford is on the hook for a recall of its Kuga (Escape) PHEV. The Blue Oval recalled almost 21,000 examples of the plug-in hybrid in August, asking owners not to drive the crossover in its electric-only mode and to avoid charging the battery. While alarming in its own right, Ford said the recall effectively makes it impossible for it to meet 2020 EU emission quotas. It is now seeking partners for an “open emissions pool” and is hardly the only manufacturer doing this.

Fiat Chrysler Automobiles has basically informed the world that it’s just going to keep throwing money at the problem for as long as possible. It pooled with Tesla last year in order to reach its goals but has previously said it would just eat the fines if necessary. FCA hasn’t prioritized electrification and has several brands specializing in larger automobiles with big engines targeting the American market.

Daimler and Volkswagen Group aren’t on track to meet this year’s targets either. While Daimler chairman Ola Källenius the company was within striking distance of getting its fleet-wide emissions average down to just to 95g of CO2 per kilometer (this year’s limit in the EU), he hasn’t explicitly said the company would meet that goal by the end of 2020.

Meanwhile, Volkswagen has already pooled credits with its Chinese joint venture partner SAIC. Considering VW has made some of the loudest proclamations about becoming a greener company committed to electrification since 2015, it’s more than a little ironic to see it struggle with emissions quotas.

According to the Financial Times and Automotive News, Ford intends to form an open pool for light commercial vehicles because it’s on track to be well below its CO2 target for vans. As a collaborating partner in Ford’s EV and van programs, Volkswagen has already signed itself on to take advantage. That leaves the Detroit-based automaker hunting for dance partners dangerously close to midnight and bragging about how well it scored with its light commercial fleet.

“Based on our product road map and production schedule for this year, we expected to comply with the new regulations even factoring in Covid-related disruption to our manufacturing,” Ford said in a statement. “Therefore, just as many other carmakers have done in Europe, we now intend to join an open pool with other carmakers for passenger vehicles.”

Next year will probably be a repeat of this one. Europe saw a rush on automakers pushing EVs and hybrid models in 2020. Ford even ramped up its marketing budget to sell more Kuga PHEVs in a bid to adhere to increasingly stringent EU emission rules before they were recalled. The rules don’t get any easier next year but regulators seem convinced that the market share of plug-in models will rise to 15 percent (in Europe) in 2021.

[Image: Ford]

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6 of 32 comments
  • Mcs Mcs on Oct 17, 2020

    "Ford employs some of the absolute worst “engineers” in the world" Matt, I wouldn't blame the engineers. As an engineer, you can design something properly, but then some bean counter or manager tells you to reduce the cost. When you argue that cutting any costs will hurt the quality of the product, they'll say they don't care. You can have the most brilliant engineers in the world, but if management gets in the way, you'll have problems with the product. I've seen too many incompetent managers put companies out of business because they weren't listening to the engineers. Even if there is a bad engineer, it's still up to management to get rid of or reassign them. So, I'd put 100% blame on management.

  • Jdmcomp Jdmcomp on Oct 17, 2020

    It appears that Ford has now discovered just why it produced all those fuel efficient cars that kept the CAFE in place while they sold Expeditions with a $10,000 profit margin. I suspect the end is just upping the price of trucks and SUVs to cover the penalty. Someone has to pay the price, why not the buyer. Ford won't.

    • See 3 previous
    • Vulpine Vulpine on Oct 19, 2020

      @DenverMike And there you go with that stupid, obsolete stereotype again. While I will grant SOME battery-electric cars may be little, the vast majority today are the same size as ICE cars and have significantly better performance than a factory ICE in its class. Leave off with the stereotypes; they only make you look un-educated.

  • Jeff S Some of us don't care either way we are not into this type of car. Most of these will be stored in garages waiting for their value to go up. As someone above noted this is an old body style which is retro 70s Challenger which after researching it came out in the 2008 MY which means a long run for a model that is in its 16th year. I have always liked these but if I bought one I would not spend this kind of money on one probably get the V-6 version and use it as a family car but then I am not into drag racing or muscle cars. For the type of car it is it has a decent rear seat and not too bad of a trunk. Most of us are not going to spend 100k for any vehicle at least currently so its not something most of us will buy and stick in a garage waiting for its value to increase. I am glad that these editions came out for those who can afford them and it keeps a little more color into what has become a very dull vehicle market but then with age I pick the dull appliance like reliable vehicle because that's what I need. Impressive car but not for me.
  • Jonathan The Germans. So organized they can appear disorganized. I agree with some others, classic names like Thunderbird, Imperial, Grand Prix, Ambassador etc. just have more appeal.
  • Bobbysirhan A friend had one when they first came out. He was CFO of some green California company and could charge the Volt at work. At home, the PHEV gave him an excuse to make his wife park her nicer car outdoors while the Volt get their condo's one-car garage. He liked the Volt, and he spent very little on energy during the 'first one's free!' era of EV ownership. Of course, the green company went bust soon after, and he wound up with a job that involved far more driving and ultimately the need for a more substantial car. I drove the Volt once after his wife had made a return trip to Los Angeles, depleting the battery. I don't know what a first gen Volt drives like with a charged battery, but it was really gutless with two adults, a yellow lab, and a dead battery. My other memory of it was that it had a really cramped back seat for a car that was about as large as a Civic. My friend who bought it liked it though, and that's not always been the case for GM vehicles.
  • MrIcky I think the Shakedown is more my speed of the last call editions- but this is impressive.
  • Dukeisduke I tried watching the live reveal last night, but after 15 minutes of jawing by MT+ personalities (and yes, I like Chris Jacobs and Alex Taylor), I turned it off.