By on October 15, 2020

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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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32 Comments on “Facing Emission Fines, Ford Becomes Ravenous for Carbon Credits...”


  • avatar
    gasser

    Congratulations fo Elon Musk and the folks at Tesla.

  • avatar
    ToolGuy

    “Facing Emission Fines, Ford Becomes Ravenous for Carbon Credits”

    Pretty sure this is fake news. William Clay Ford Jr. is a “lifelong environmentalist” (see the link straight from Ford PR) and has been laser-focused on green initiatives for the past two decades [that’s twenty years to you and me]. No way does a “martial arts black belt” lose focus like that.

    https://tinyurl.com/n7szf2h

    • 0 avatar

      All rich people are progressive (on surface at least). And they get richer and richer and at same time are for taxing rich people more. Not themselves of course, no – the rich people. Bill is ultra progressive but he loves F150. Why that?

  • avatar
    Tstag

    Carbon credits are a smart move. It forces car makers to fund electric car development themselves or a pay the competition to do it. It also forces up the price of ICE cars and pushes the price of electric cars down. It forces changes.

    • 0 avatar
      EBFlex

      Except we don’t need changes. There’s nothing wrong with ICE cars and, frankly, everything is wrong with electric cars. They just don’t work.

      Why would we want to push garbage cars into the market? How does that help? What about electrical grids that cannot handle all the charging demands? How does that help?

      • 0 avatar
        SCE to AUX

        @EBFlex: I see you haven’t lost your touch for BS. Once again, everything you said is false. Repeating the same stuff doesn’t make it true.

        • 0 avatar
          EBFlex

          “I see you haven’t lost your touch for BS. Once again, everything you said is false. Repeating the same stuff doesn’t make it true.”

          It’s a shame you have such a disdain for the truth.

          Just because you don’t like something does not mean it’s not true. That’s not how facts work.

    • 0 avatar
      Pig_Iron

      I suspect Ford is in more trouble than it admits. They have one EV that is yet to be released. All the Lincolns should be hybrid only at this point, and the Navigator should be available with EV. That EV powertrain that could be trickled out to the rest of the F-Series line, then scaled to the rest of the product lines – especially in Europe.

    • 0 avatar
      Dartdude

      That is totally Bull. The governments of this world are always playing favorites to help which companies that they have an interest in. We the people are forced to help pay for a product we don’t want to buy. Imagine if they did this to bread. Made you pay higher price for regular bread so that their preferred glutten free bread companies to survive>

      • 0 avatar
        Luke42

        “We the people are forced to help pay for a product we don’t want to buy.”

        Meanwhile, as a guy who likes plugins, I’m sitting on my cash waiting for the right vehicle to come on the market.

        I’m waiting for someone to sell me a big family EV (crew cab pickup, minivan, or 3-row SUV with 6k+ tow rating). The Tesla Cybertruck is looking like my best bet at the moment.

        The F150-EV will certainly be given full consideration if it’s on the market any time soon. The Rivian offerings will be given full consideration, as well.

        So, yeah, you might like ICE vehicles, and not be bothered by the geopolitical/environmental/climate impacts of the things. I’m not with you there.

        I can’t wait to buy into a cleaner/smoother/simpler electric future!

        • 0 avatar
          Vulpine

          Thumbs up, Luke. I’m behind you 100% and looking for a similar product, even if not as large. I don’t need or want full-sized and absolutely don’t need or want three rows. I really only need 1½ rows and good stowage capacity.

    • 0 avatar
      stuki

      Tax feeders forcing productive people, is always a “smart move.”

      • 0 avatar
        HotPotato

        When the price of something doesn’t represent the true cost of it, we have a type of market failure: the market is not sending accurate price signals. The individual incentives for rational behavior do not lead to rational outcomes for the group.

        Pollution has real costs. Climate change has real costs. These can include shorter and sicker lifespans, reduced productivity, costly property damage, farmland lost to desertification, etc. But these are waved off as “externalities” instead of being priced into fuel and vehicle costs. (It’s easy to do this if you think you’re not personally downhill from the sh!t. But trust me, you’ll be downhill from it soon enough.)

        If those costs were priced in, then the market could help solve the problems. To make this happen, we would have to calculate the total unrecovered cost, tax ICE vehicles and fuel sufficiently to recover that cost (plus overhead), and spend the resulting funds on the necessary remediation (if remediation is even possible).

        We don’t do that.

        And so bottom line, ICE vehicle drivers aren’t subsidizing others. They are BEING subsidized at a staggering rate. They’re causing damage and leaving others to pay the costs and consequences. They are the elephant on one side of the scale, and whatever scraggly EV incentives we have amount to a few #2 pencils on the other side of the scale.

        You know it. I know it. Let’s stop kidding ourselves. I’m not going to switch hobbies; I’ve always loved cars and always will. But I’m not going to whine like a little b*tch about some timid clean-air incentives, and neither should you.

  • avatar
    neil733

    This misunderstands the regulation.
    It isn’t possible, under the European regulation to “buy carbon credits”.
    What is possible is for two or more manufacturers to “pool” their registrations together, so that if one is over the target and the other is below the target, the two can balance and together meet the target, and of course the manufacturer that is below the target can charge the manufacturer that is above the target for the privilege.

    The risk is that Ford pools with another manufacturer, the pool still misses the target, and Ford becomes liable for fines based on the total volumes of both manufacturers, although this may still be less than if Ford didn’t pool, depending on the maths.

    • 0 avatar
      Scoutdude

      Ford would be liable for lower fines because they aren’t going to enter into to a pool with someone else who isn’t on track to meet the standards. Even if the pool missed the target there is no reason to believe that Ford would be responsible for the fines due to the other mfg missing their target.

  • avatar
    dukeisduke

    Ford having Ford problems.

  • avatar
    Vulpine

    Looks to me like Ford is going to be buying ZEV credits from Tesla for a while

    • 0 avatar
      Scoutdude

      You can’t buy credits in Europe, only pool them and Chrysler is in the pool with Tesla and taking up all the room in that one.

      IF it weren’t for the Kuga recall Ford was on track to meet the target so they aren’t that far off. The Mach-E and lifting the stop sale order on the Kuga should get them back on the good side of the regulations.

  • avatar
    dukeisduke

    Why not just fix the vehicles?

    • 0 avatar
      EBFlex

      Because Ford is incapable of designing something properly let alone then fixing their mistakes.

      Ford employs some of the absolute worst “engineers” in the world. They have no clue what they are doing. Then you have an idiot CEO who’s only goal is ensuring each vehicle program meets a certain profit percentage and will lower quality until that is met.

      That’s why the Explorer and MKExplorer are STILL having major issues that are resulting in vehicles not being able to be delivered and going to the crusher. That is why the hybrid Explorer is having major issues and delivers terrible fuel economy (in some cases worse than a large V8 SUV) and that is why the Escape PHEV is being scrapped for 2020.

    • 0 avatar
      Snooder

      They are.

      It’ll just take some time, and they want to make sure they dont have to pay fines in the meanwhile.

  • avatar
    mcs

    “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.

  • avatar
    jdmcomp

    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.

    • 0 avatar
      Snooder

      This is talking about Europe.

      Ford still makes cars in Europe, they just won’t bring them here.

    • 0 avatar
      Scoutdude

      Dropping the cars has done good for Ford’s CAFE numbers in the US. Every vehicle has its own target based on footprint and type. Cars get much worse treatment under current regulations. Though in the US they can trade between their own truck and car fleets. That is the problem in Europe, they can’t use their over performance in the truck fleet to offset their under-performing car fleet. So they need to find a mfg that has an over performing car fleet and hope they have an under-performing truck fleet so they can just trade credits, not fork out cash.

      • 0 avatar
        DenverMike

        Well yeah the stupid rules cause automakers to focus on sales of their most profitable vehicles which are also the most thirsty.

        Clearly the bigger the city, the bigger the problem. Hello London and Paris. Absolutely, start with banning all non-electric cars and trucks (non-emergency) from the core of big cities, starting with dirty diesels.

        Then work outward towards the suburbs until the air pollution is tolerable.

        There’s no need to punish everyone equally, especially if they live in the sticks, middle of nowhere, muddy roads, and little electric cars are the last thing they need.

        • 0 avatar
          Vulpine

          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.

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