Benzinga | Dec 10, 2021 06:30AM EST

Nio, Xpeng Join Volkswagen's EU CO2 Pool Aimed At Meeting Carbon Targets

Germany's Volkswagen Group (OTC:VWAGY) has roped in three more Chinese automakers in its open European Union pool to meet carbon targets, according to Schmidt Automotive Research.

What Happened: U.S. listed Chinese electric automakers Nio Inc (NYSE:NIO), Xpeng Inc (NYSE:XPEV) and Geely Automobile Holdings Ltd (OTC:GELYF) are the new OEMs who have joined Volkswagen's open EU passenger car CO2 pool, taking the total Chinese automaker's count in the pool to six.

Volkswagen said it remains confident of achieving the 2021 E.U. carbon emission compliance without the new partners. Three other Chinese automakers, Aiways, SAIC's MG and Geely's LondonEV Company, were already part of the pool.

Automakers in China receive credit points if 12% of their total sales volume is a mix of new energy vehicles; that could include electric cars and plug-in hybrids.

See Also: Tesla On Track To Score Highest Earnings Of All Automakers From Emissions Credits In China This Year

Why It Matters: Volkswagen Group failed to achieve EU fleet average CO2 compliance last year, following the late ramp-up of the MEB models amid software delays and glitches.

Passenger car makers in the E.U. need to meet standards that require a fleet average of 95 grams per kilometer of CO2 in order to avoid huge fines.

Both Nio and Xpeng have recently started selling electric cars in Norway and plan further expansion in key European countries.

Volkswagen on the other hand counts China, its largest market outside China, as a key market for growth. It has recently started selling its ID. series of electric vehicles in China.

Price Action: Nio shares closed 2.85% lower at $34.05 a share on Wednesday.