Well, this is an interesting one…. For some background, regulations in the European Union require that automakers reduce the CO2 emissions that the cars they sell create. Year after year, they have to cut their average fleet emissions. If they don’t cut their emissions to the necessary level, they have to pay huge fines. However, there is a loophole (of course). An automaker can join a pool of other automakers and as long as the average is at the target level, all is good. Of course, for a below-par automaker to get into a pool with an above-par automaker, the former has to pay the latter. As long as the fee is a decent level below what the fines would be, it’s easy business, especially for an EV producer. Well, for some reason, Porsche has decided to leave the broader Volkswagen Group emissions pool (despite being a Volkswagen Group brand), and instead pool with Chinese EV company XPENG in the coming year. That’s according to a filing with the European Commission in early August. On the surface, this seems very weird. However, XPENG has been working closely with Volkswagen on other things for a while now. Also, perhaps there’s another issue at play…. If it’s perhaps not going to work out to have Porsche and the rest of Volkswagen Group achieve the necessary emissions level on their own, maybe the plan is for XPENG to get Porsche to the necessary level while the rest of Volkswagen Group does what it needs to do on its own. That seems to be what’s going on. Porsche had moved strongly into EVs, but now it intends to move a bit in the other direction. (Let’s not get started on that….) In the case of XPENG, naturally, it gets extra revenue for this and has to do pretty much nothing, so it’s clearly a win for the Chinese EV company.